The FCC last week issued a Notice of Proposed Rulemaking aimed to give incentives to broadcasters to air more local journalism and local programming by prioritizing the processing of certain applications by stations that feature local programming.  That decision drew dissents from both of the FCC’s Republican Commissioners, not because of the proposal for the preference, but because they were concerned about language in the Notice asking for comment on whether the FCC was correct in its 2017 decision that abolished the main studio rule and the policy requiring broadcasters to have the capability of originating programming from a physical location in their service areas.  

The proposal to prioritize the processing of applications by stations with local programming is a narrow one.  The priority would only apply to renewal applications, and applications for sales of full-power stations (assignments of licenses and transfers of control).  The FCC’s proposal would not apply this preference to routine applications that are processed in the normal course (with renewals usually being granted within a month after the three-month comment period following the renewal filing deadline, and assignment and transfer applications similarly being routinely granted within a few weeks of the end of the 30 day public comment period following the public notice of the filing of an application for FCC approval of the sale).  Instead, the majority decision proposes to apply the priority only to applications that are non-routine, giving faster processing to applications that have petitions filed against them, or where the FCC has other concerns with a routine grant of the application (seemingly, in the renewal context, that would apply to cases where there are certifications in the application that cannot be made by an applicant, e.g., where it cannot certify that it had properly maintained its public inspection file during the license term, or that the applicant had not violated FCC rules or had not been silent for an extended period during the license term).

Continue Reading FCC Proposes to Prioritize Processing of Applications by Stations with Local Programming – And Asks Many Questions About Whether the FCC Should Have Abolished the Main Studio Rule

The Copyright Royalty Board has published in the Federal Register a correction to its notice announcing the commencement of the next proceeding to set rates for the royalties paid by webcasters (including broadcasters who stream their music through the internet) to SoundExchange for the public performance of sound recordings in the period 2026-2030.  The correction is to the date by which interested parties must file a petition to participate – setting that date as February 5, 2024, not February 6 as originally stated.  Thus, interested parties have a deadline one day earlier than previously announced.  We wrote more about that proceeding here.

The CRB also published in the Federal Register a notice announcing that it would be auditing five broadcast companies who are streaming their signals to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. Another audit notice has gone out to a company called RFC Media, which is both a webcaster and a Business Establishment Service whose royalties are exclusively paid under Section 112 of the statute (see our article here about the CRB-set royalties for these services that provide music played in various food and retail establishments and other businesses).

Continue Reading Copyright Royalty Board Issues Correction of Deadline to File Petitions to Participate in New Proceeding to Set Webcasting Royalty Rates for 2026-2030, and Issues Notices of Audits of Webcasters

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • President Biden signed a Continuing Resolution passed by Congress averting a federal government shutdown that was to begin on January 19 for parts of the government, and on February 2 for other portions of the federal government – including the FCC and the FTC.  The resolution provides funding for the FCC and the FTC through March 8. 
  • The FCC released two Notices of Proposed Rulemaking (NPRM) of interest to broadcasters:
    • In the first NPRM, the FCC proposed to prioritize the review of non-routine license renewal, assignment of license, and transfer of control applications – providing faster processing of any issues that resulted in the application not being processed in the normal course, if the application was filed by a broadcast station that provides at least three hours per week of locally originated programming.  The proposed prioritization policy was intended to incentivize stations to provide locally originated programming.  The majority of the Commissioners suggested that this was needed in light of the FCC’s 2017 elimination of the rule requiring stations to maintain a main studio located in or near their communities of license and the related requirement that the main studio have local program origination capability (see our articles here and here regarding the former requirement).  In the NPRM, the FCC asked for comments as to whether the elimination of the main studio was a mistake, questioning whether the basis for eliminating that rule – fostering the creation of more and better local content – had been achieved.  While the FCC did not explicitly propose in the NPRM to reinstate the main studio rule, both Republican Commissioners dissented from the NPRM as they believed that the FCC was headed in that direction. We will write more about this proposal this coming week.
    • In the second NPRM, the FCC proposed to require cable operators and direct broadcast satellite (DBS) providers to issue rebates to subscribers affected by blackouts resulting from failed retransmission consent negotiations with TV stations.  Through the NPRM, the FCC seeks public comment on whether and how to require cable operators and DBS providers to issue these rebates.  The FCC also requests comment on whether there are other methods to incentivize cable operators, DBS providers, and broadcasters to limit the occurrences of blackouts.  The NPRM follows the FCC’s decision last month in which it proposed to require cable operators and DBS providers to disclose the occurrence of any blackouts resulting from failed retransmission consent negotiations with TV stations, which we discussed here and here. 
  • The FCC’s Media Bureau imposed significant financial penalties on several broadcasters for perceived violations of the FCC’s rules:
    • The Bureau entered into a Consent Decree with the licensee of two Idaho FM stations requiring a $500,000 penalty and a compliance plan to resolve the Bureau’s investigation as to whether the stations violated the FCC’s rules governing sponsorship identification and maintenance of political files.  The Bureau found that the station had broadcast paid programming, sponsored by a local political party and one of its leaders, which discussed controversial issues and featured candidates for public office, without providing on-air sponsorship identification announcements for multiple episodes of the program and numerous advertisements promoting it.  The station also failed to note the federal issues and candidate appearances in the stations’ political files for multiple episodes of the program.  With the 2024 political season already well underway, this decision should serve as a warning to all broadcasters of the potential consequences for failing to comply with the FCC’s political file requirements.  For a deeper dive on election year planning, see our post, here, and  our Political Broadcasting Guide.
    • The FCC fined Cumulus Media $26,000 for its failure to upload one EEO Annual Public File Report to its online public inspection file until about 9 months after the due date.  The FCC previously proposed a $32,000 fine on the company for its failure to timely upload the annual EEO report to the online public inspection files for five co-owned stations in a Georgia market.  The principal change in this week’s decision was to reduce the fine by $6,000 – the amount previously proposed by the FCC for the licensee’s failure to self-assess its EEO program.  This portion of the proposed fine was imposed on the theory that, if the licensee had been regularly assessing its program, it would have noted that the required report had not made it to the online public file and fixed that problem.  This week’s decision reaffirms that reasoning but reduces the fine by the amount allocated to the failure to self-assess the program, finding that Cumulus may not have had notice that reviewing public file uploads was part of its obligation to self-assess its EEO program.  See our Broadcast Law Blog article here for our further discussion of this case, which demonstrates the continuing importance that the FCC places on EEO enforcement.
    • The Bureau entered into another Consent Decree with an Indiana AM station’s licensee requiring an $8,000 penalty to resolve issues arising from the Bureau’s review of a transfer of control application involving the licensee’s shareholders.  First, the Bureau found that the licensee failed to obtain FCC approval by filing a transfer of control application for the transfer of shares of the licensee’s controlling shareholder to a trust of which the shareholder was the trustee.  The licensee then failed to timely file an involuntary transfer of control application within 30 days of the former shareholder’s death to reflect the resulting change in the trustee, filing the involuntary transfer of control application over 18 months late.  This is one of several recent cases that show that death of a controlling owner (or even estate planning by the owners of a station) can trigger FCC requirements for approval of changes in control of an FCC license, and penalties can result when such approvals are not obtained (see, for instance, the cases we noted here, here, here, and here).
    • The Bureau proposed a $16,500 fine against the licensee of an Alabama FM translator station for allegedly failing to timely request FCC authorization for temporary facilities for the translator, operating the translator without proper FCC authorization, and falsely certifying in the translator’s license renewal application that it did not have any unresolved or adverse character issues.  The Bureau proposed the fine based on its finding that the licensee had been operating the translator at variance from its license since June 2017 without obtaining FCC authorization to do so.  Additionally, the Bureau found that the licensee failed to disclose in the renewal application that the licensee’s principals were involved in cases involving cancelled stations in which those individuals were found to have made false statements and operated those stations with unauthorized facilities.  The FCC’s rules normally require a base fine of $10,000 for unauthorized operations, and a base fine of $3,000 for failing to request special temporary authority (STA) to operate at variance from a station’s license.  In this case, however, the Bureau reduced the proposed fine for unauthorized operations from $10,000 to $5,000, and the proposed fine for the late-filed STA request from $3,000 to $1,500, because FM translator stations are secondary services.  The Bureau, however, proposed a $10,000 fine for the licensee’s false certifications. 
  • The Media Bureau also took two actions that could result in the cancellation of station licenses:
    • The Bureau dismissed an Oregon FM station’s license renewal application after determining that the station failed to operate from an authorized location for over twelve months and its license therefore terminated automatically pursuant to Section 312(g) of the Communications Act.  Section 312(g) states that a station’s license will be automatically cancelled if the station that has not operated as authorized for a full year, unless the FCC makes an affirmative determination that there are public interest factors warranting the preservation of the license.  The Bureau rejected the licensee’s claim that no authority was necessary as its move of its antenna from one site to another was less than one second different in geographical coordinates.  The FCC found that a move of less than three seconds does not require a construction permit only when it involves a coordinate correction and, even then, the move requires FCC approval in a license application after the move.  Neither a construction permit nor a license application was filed by this licensee.  The Bureau also dismissed the station’s argument that it was exempt from requesting authority to move to a new transmission facility as the antenna at the new site was mounted in a tree, and thus did not require construction of a new tower.  The Bureau dismissed the station’s argument as baseless, noting that placing a station’s antenna in a tree required prior FCC authorization just as placement of a station’s antenna on a tower because the FCC needs to know the precise location of any station’s transmission facilities to ensure adequate interference protection to other stations and the safety of air navigation. 
    • The Bureau, along with the FCC’s Managing Director, issued an Order to Pay or to Show Cause to the licensee of an Illinois AM station and a Missouri FM station in which the Bureau proposed to revoke the stations’ licenses unless, within 60 days, the licensee pays the delinquent regulatory fees and interest, administrative costs, and penalties.  According to the Order, the FCC’s records indicate that the stations currently have unpaid regulatory fee debt from fiscal years 2010, 2012, and 2013 totaling $13,121.32 for the AM Station, and totaling $11,828.38 for the FM station.
  • The National Association of Broadcasters (NAB) released a report detailing the public safety importance of AM radio.  In the report, the NAB explained that AM radio is an essential component of the nationwide Emergency Alert Service – especially given AM radio’s unique importance to communities of color and rural areas.  For that reason, the NAB again urged Congress to pass the AM Radio for Every Vehicle Act (see our previous discussion of NAB’s position on the bill here), which would mandate the installation of AM radios in all new cars, including electric vehicles.  As we discussed here, the bill has not mustered sufficient support in Congress to pass.  See our discussion here regarding the bill, and its importance to the survival of AM broadcasting.
  • Using the maximum fine permitted before the recent inflation adjustment (see here and here regarding our discussion of the FCC’s recent adjustments of fines for inflation), the FCC’s Enforcement Bureau issued two Notices of Illegal Pirate Radio Broadcasting to landowners in Hazelton, PA, and Newark, NJ, for allegedly allowing pirates to broadcast from their properties.  The Bureau warned the landowners that the FCC may issue fines of up to $2,316,034 under the PIRATE Radio Act if the FCC determines that the landowners continued to permit any individual or entity to engage in pirate radio broadcasting from their properties.

The full Commission this week issued an Order fining Cumulus Media $26,000 for its failure to upload one EEO Annual Public File Report to its online public inspection file until about 9 months after the due date.  The unanimous decision of the five Commissioners generally upheld an EEO Notice of Apparent Liability, issued unanimously by all four FCC Commissioners about two years ago, where the Commission had proposed a $32,000 fine on the company for its failure to timely upload the annual EEO report for a cluster of five co-owned stations in a Georgia market (and the fact that a link to that report on each stations’ website was also missing for that period).  The principal change in this week’s decision was to reduce the fine that had been proposed by $6,000, reflecting the amount that the Notice of Apparent Liability had assessed for the licensee’s failure to self-assess its EEO program. Broadcasters are required to regularly assess the effectiveness of their EEO program.  The proposed fine was imposed on the theory that, if the licensee had been regularly assessing its program, it would have noted that the required report had not made it to the online public file and fixed that problem.  This week’s decision reaffirms that reasoning but reduces the fine by the amount allocated to the failure to self-assess the program, finding that Cumulus may not have had notice that reviewing public file uploads was part of the obligation to self-assess.

It is very important to note that this decision did not cite any failure by the licensee to recruit widely when it had open positions, nor any failure of the group to conduct the required EEO non-vacancy specific outreach (these obligations described in our posts here and here).  The alleged violations cited in the decision were simply tied to the failure to upload the annual report.  In fact, Cumulus stated that the report was prepared on time, but was not uploaded to the public file because of an administrative oversight due to staff turnover.  While the base fine for this violation totaled less than $10,000, the proposed fine was increased because Cumulus was found to have previous FCC rule violations for EEO and sponsorship identification matters.  Both Cumulus and the NAB argued that this amount was excessive for a single instance of a paperwork shortcoming – the FCC rejecting that reasoning, finding that the upload was a critical part of the broadcaster’s EEO obligations as it gives the public a way to monitor the performance of the licensee. 

Continue Reading FCC Imposes $26,000 Fine on Broadcaster for One EEO Annual Public File Report that was Uploaded Late

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC’s January 12 report listing the items on circulation (those orders or rulemaking proposals that have been drafted and are currently circulating among the Commissioners for review and a vote) noted the removal from the list of a draft Notice of Proposed Rulemaking which proposes prioritizing FCC review of applications seeking approval for license renewal and assignments or transfers of control when those applications are submitted by broadcasters that provide locally originated programming.  The removal from the list usually means that the item has been voted on and will be made public within a few days.  This proposal was announced in November by FCC Chairwoman Rosenworcel to support and incentivize local journalism by rewarding broadcasters’ commitment to meeting the needs and interests of their local communities.  How the prioritization of assignment and renewal applications would promote local journalism when these applications are, for the most part, routinely processed and granted within a few weeks of the end of statutorily required public comment periods, was not set out in the announcement.  We will be looking for the release of any FCC action to see the details of this proposal. 
  • The FCC’s Media Bureau proposed a $150,000 fine against a New York TV station for allegedly failing to negotiate in good faith a retransmission consent agreement with a large cable provider.  The Bureau alleged that the TV station violated the FCC’s good faith negotiation requirements by repeatedly proposing terms that foreclosed the ability of the parties to file complaints with the FCC.  The TV station contended that parties to such agreements typically agree to withdraw good faith negotiation complaints once a final agreement has been reached.  The Bureau disagreed, finding that such contractual terms are presumptively inconsistent with the good faith negotiation requirement.  See our Broadcast Law Blog article here for other instances where the FCC has found violations of the good faith negotiation requirements for retransmission consent agreements.
  • The FCC announced that the inflation-adjusted maximum penalties for FCC violations released by the Enforcement Bureau last month will become effective on January 15.  As we previously discussed here, the maximum fine for most violations will be $61,238 for each violation or each day of a continuing violation, with a maximum total fine for any continuing violation not to exceed $612,395.  Maximum fines involving indecency will now be $495,500 for each violation or each day of a continuing violation, with a maximum of $4,573,840 for any single act.  Fines for violations of the rules prohibiting pirate radio operations will now be as much as $119,555 per day not to exceed a total of $2,391,097.
    • Using the maximum fine permitted before the inflation adjustment, the FCC’s Enforcement Bureau issued a Notice of Illegal Pirate Radio Broadcasting to a landowner in the Bronx, New York for allegedly allowing a pirate to broadcast from its property.  The Bureau warned the landowner that the FCC may issue fines of up to $2,316,034 under the PIRATE Radio Act if the FCC determines that the landowner continued to permit any individual or entity to engage in pirate radio broadcasting from its property.
  • The FCC released its quarterly Broadcast Station Total Press Release.  The release shows that, compared to the same release from a year ago, there are 40 fewer AM stations, and 23 fewer commercial FM stations, but 79 more noncommercial FM stations.  There were also 10 more commercial UHF TV stations and 5 fewer commercial VHF TV stations; and 4 more noncommercial UHF TV stations and 4 fewer noncommercial VHF TV stations. 
  • The US Court of Appeals for the District of Columbia Circuit, in a brief order, denied a petition filed by a Kentucky AM station which sought a court order to compel the FCC to reinstate its cancelled license because the FCC failed to notify the station of its dismissal of its renewal application.  The station sought relief from a February 2023 decision affirming a prior decision to cancel the station’s license because it failed to file its 2020 license renewal application.  The station argued that it had no notice of its need to file a 2020 renewal (because its 2012 renewal was still pending because of public file and other issues). The FCC found that the Public Notice announcing the renewal filing procedures for all licensees made clear that a filing was required, even for applicants that had their prior renewal still pending.  While the station owner argued that it had no knowledge of this requirement, the FCC said individual knowledge was not necessary, as the licensee had constructive notice from the publicly released notice about renewal processing procedures. This case makes clear to all licensees that they need to be familiar with all FCC procedures for any requirement that could possibly affect them to avoid missing an important FCC obligation.
  • The FCC’s Media Bureau dealt with several cases of fines on stations for improper operations or FCC paperwork.  These include the following:
    • The FCC’s Media Bureau proposed fines against two TV stations for their failure to timely upload their quarterly issues/programs lists to their online public inspection files.  In the first case, the Bureau proposed a $6,000 fine for a Texas TV station for allegedly failing to timely upload these lists for a total of nine quarters, i.e., five lists more than one year late, two lists between one month and one year late, and two lists between one day and one month late.  In the second case, the Bureau proposed a $3,000 fine against a California TV station for allegedly failing to timely upload these lists for a total of six quarters, i.e., one list over six months late and five lists over one year late.
    • The FCC’s Media Bureau issued a $2,000 fine to the licensee of two Idaho TV translators for failing to timely file license applications for the translators and operating the stations without authorization after their construction permits had expired.  As we wrote here, the Bureau originally proposed a reduced $13,000 fine against the licensee ($6,500 instead of $13,000 per station) because TV translator stations are secondary services.  In this week’s order, the Bureau further reduced the fine to $2,000 ($1,000 per station) based on the licensee’s demonstration of inability to pay the proposed fine due to financial hardship.
    • The FCC’s Media Bureau proposed fines against an Oregon and a Washington LPTV station (see here and here) for failure to timely file their license renewal applications – which in both cases were filed over one month late without explanation.  In these decisions, the Bureau continued its recent practice of proposing a $1,500 fine against an LPTV station for failure to timely file a license renewal application.
  • The FCC’s Media Bureau requested comment on a TV station’s proposal to allocate reserved noncommercial educational (NCE) television channel 12 to Waynesboro, Virginia, as the community’s first local television service and its first NCE television service.  Comments and reply comments are due 30 and 45 days, respectively, after the proposal is published in the Federal Register
  • The FTC announced that it will hold an informal hearing on its proposed rule banning fake reviews and testimonials in advertisements and marketing materials enabled by the emergence of generative artificial intelligence.  Specially, to combat such harms, the FTC is proposing to prohibit businesses from engaging in misconduct, including: selling or obtaining fake consumer reviews and testimonials, buying positive or negative reviews, using insider reviews, making or using unjustified legal threats, intimidation, or false accusations to prevent or remove a negative consumer review, and using fake social media subscriber and viewer data.  The hearing is scheduled for February 13 at 10 a.m. ET.  The proceeding follows previous FTC warnings regarding the use of deceptive endorsements in advertisements, which we discussed here.  The FTC has also issued penalties against media companies for permitting the use of deceptive endorsements in advertisements, which we discussed here. 

Our Broadcast Law Blog, we looked at the Copyright Royalty Board’s announcement of the start of a new proceeding to set the royalty rates for 2026-2030 to be paid by webcasters (including broadcasters who simulcast their programming through internet-delivered channels) to SoundExchange for the noninteractive streaming of sound recordings.  Petitions to participate in the proceeding to set those rates are due February 6, 2024.

Update (January 24, 2024) – The Copyright Royalty Board issued a Federal Register Notice correcting the deadline for Petitions to Participate in the WEB VI proceeding – making clear that the deadline is February 5, 2024, not February 6 as previously reported. This article has been updated with the corrected deadline. For more information, see our article here).

The Copyright Royalty Board on Friday published in the Federal Register a call for interested parties to file Petitions to Participate in the proceeding to set the royalty rates to be paid by webcasters (including broadcasters who simulcast their programming through internet-delivered channels) in the period 2026-2030.  These royalties are paid by webcasters to SoundExchange for the noninteractive streaming of sound recordings.  The CRB is required to review these rates every five years.  These proceedings are lengthy and include extensive discovery and a trial-like hearing to determine what royalty a “willing buyer and a willing seller” would agree to in a marketplace transaction.  Because of the complexity of the process, the CRB starts the proceeding early in the year before the year in which the current royalty rate expires.  So, as the current rates expire at the end of 2025, parties will need to sign up to participate in the proceeding to determine 2026-2030 rates by February 5, 2024 by filing a Petition to Participate.  The Petition must describe the party’s interest in the proceeding and be accompanied by a filing fee of $150.  The Federal Register notice provides other procedural details for filing these Petitions.

Once the Petitions to Participate are filed, the CRB will set out the rules and procedures to be followed in the proceeding.  Initially, there is a 90 day period in which the parties can try to settle the case.  While parties can settle at any time (subject to approval of the terms by the CRB), this initial 90-day period occurs before any litigation begins and offers parties the opportunity to avoid much of the cost of litigation.  Once that period ends without a settlement, the litigation begins.  Initial stages of the litigation (including the identification of witnesses, submission of the rate proposals and the evidence supporting those proposals, and the initial discovery) will likely all take place in 2024, with the hearing itself conducted in 2025, followed by final briefs summarizing the evidence and arguing about the conclusions to be drawn from that evidence. There are usually oral arguments held after the briefs are submitted.  At that point, the three Copyright Royalty Judges will consider the evidence and the arguments and release their decisions late in 2025, so that parties know the new rates as of January 1, 2026. While there may be appeals of the decision that are argued well beyond the effective date of the new rates, the rates become effective while those appeals are pending.

Continue Reading Copyright Royalty Board Starts WEB VI Proceeding to Set Webcasting Royalties Paid to SoundExchange for 2026-2030: Petitions to Participate Due February 5

Expecting quiet weeks, we took the holidays off from providing our weekly summary of regulatory actions of interest to broadcasters.  But, during that period, there actually were many regulatory developments.  Here are some of those developments, with links to where you can go to find more information as to how these actions may affect your operations. 

  • The biggest news from the holiday period was that FCC finally released a Report and Order concluding its long-delayed 2018 Quadrennial Review of the broadcast ownership rules.  The FCC had until December 27 to conclude the overdue 2018 Review in order to comply with an order of the U.S. Court of Appeals for the District of Columbia (see our article for more on the Court order).  The FCC released its decision the day before the deadline, making no significant changes to its local radio ownership rule, its rules that generally prohibit ownership combinations of two of the Top 4 ranked TV stations in any market without a special public interest showing (and refusing to offer any specific circumstances in which Top 4 waivers would be routinely granted), or its rule that prohibits one party from having interests in two of the Top 4 TV networks.  The FCC generally found that, despite increased competition from digital media, broadcasting remained a unique market where any further consolidation of ownership should be prohibited.  The only change the FCC did make was to extend a prohibition on one network-affiliated Top 4 station acquiring the top-four network programming of another station in the market and moving that programming to a full-power station commonly owned by the acquiring party.  The FCC’s order extends that prohibition to situations where the acquiring party would move the acquired network programming to a commonly controlled LPTV or Class A TV station, or to a multicast stream of one of its stations.  For more on the FCC’s decision, see our Broadcast Law Blog article here.
  • The FCC’s December 29 report listing the items on circulation (those orders or rulemaking proposals that have been drafted and are currently circulating among the Commissioners for review and a vote) included an Order and Further Notice of Proposed Rulemaking in the proceeding proposing to reinstate the FCC’s Form 395-B.  That form was once filed yearly by each broadcaster and detailed the gender, race, ethnicity, and job function of all station employees.  The filing requirement was suspended over 20 years ago when a court suggested that its use was discriminatory because the FCC was penalizing stations that did not meet specific racial or gender quotas in their workforce (see our article here for more on the proposal to bring back the Form 395-B).  In December, Commissioner Starks and members of Congress called (see here, here, and here) for the Form 395-B’s reinstatement – so apparently there is now an order seeking to do just that (though the draft is not available for public review).  We will be watching for more information as it becomes available.
  • The Copyright Royalty Board published in the Federal Register a notice asking for Petitions to Participate in the next proceeding to determine the royalties to be paid to SoundExchange for the performance of sound recordings in the period 2026-2030.  These royalties are paid by webcasters who provide a non-interactive music service, which includes broadcasters who stream their signals on the internet or through mobile apps.  Parties interested in participating in the proceeding to determine the royalties for 2026-2030 must file a petition with the CRB by February 6, 2024, with a $150 filing fee.  Watch our Broadcast Law Blog on Monday, January 8, for an article with more information about this proceeding.
  • The FCC also acted in a number of other rulemaking proceedings, or took actions to make routine updates to rules already in place, including the following:
    •  FCC released a Notice of Proposed Rulemaking, in which it proposes to require multichannel video programming distributors (MVPDs) (cable and satellite television providers) to notify the FCC when a blackout of a television station results from a breakdown in retransmission consent negotiations between the station and the MVPD.  The FCC proposes to require MVPDs to notify the FCC within 48 hours of the commencement of any blackout lasting more than 24 hours, and to then notify the FCC of the resolution of any blackout within 48 hours of resumption of carriage of the affected stations. 
    • The FCC released a draft Notice of Proposed Rulemaking (NPRM) in which it proposes to require TV and radio stations to file reports with the FCC regarding station outages and their operating status during disasters.  Cable and telephone providers must report on network outages in the FCC’s Network Outage Reporting System (NORS) database and on their operational status during disasters in the FCC’s Disaster Information Reporting System (DIRS) database (reporting in the DIRS database is currently optional for broadcasters).  In the NPRM, the FCC proposes to mandate NORS and DIRS reporting requirements for broadcasters in an unspecified “simplified” manner – the nature and scope of which the FCC will formulate based on comments submitted in the proceeding.  The FCC contends that expanding the reporting requirement to broadcasters is essential given their role in the national Emergency Alert Service and the continued reliance on the broadcast service by underserved and non-English-speaking communities for emergency and weather-related information.  The FCC is slated to vote on the draft NPRM at its January 25th regular monthly open meeting.
    • The FCC announced that comments responding to the FCC’s Notice of Proposed Rulemaking (NPRM) – which proposes to eliminate video service “junk fee” practices by cable and direct broadcast satellite (DBS) service providers – will be due February 5, 2024, and reply comments will be due March 5, 2024.  As we discussed here and here, the NPRM proposes customer service protections that include prohibiting cable operators and DBS providers from imposing a fee for the early termination by a subscriber of their service contract.
    • The FCC’s Enforcement Bureau released an Order adjusting for inflation the maximum penalties that can be assessed for FCC rule violations – which will become effective upon publication in the Federal Register.  After the effective date, the fine for most violations will not exceed $61,238 for each violation or each day of a continuing violation, with a maximum total fine for any continuing violation not to exceed $612,395.  Fines involving indecency will now be up to $495,500 for each violation or each day of a continuing violation, with a maximum of $4,573,840 for any single act.  Fines for violations of the rules prohibiting pirate radio operations will now be as much as $119,555 per day not to exceed a total of $2,391,097.  We’ll let you know when the new fines take effect. 
    • The FCC’s Media Bureau announced that all rules and filing requirements for FM6 LPTV stations adopted by the FCC in July 2023 were effective as of December 28, 2023, and that all FM6 LPTV stations must notify the Bureau by January 29, 2024 of their intent to continue providing FM radio service and to confirm their operational parameters.  As we previously discussed here and here, in July 2023, the FCC permitted a limited group of fourteen LPTV Stations operating on TV channel 6 (which is adjacent to the FM band) to continue providing analog FM service on 87.7 MHz – even though these stations have converted to digital operations for their video programming. 
  • The FCC’s Media Bureau granted a petition for declaratory ruling filed by a New York FM station’s licensee to exceed the 25% limit on foreign investment established by Section 310(b)(4) of the Communications Act.  As we wrote here, the petition asked for approval of a transfer of 100% control of the station’s licensee to a Delaware corporation whose sole shareholder is a Canadian corporation, which is in turn owned by two Canadian citizens and their respective family trusts.  The Bureau concluded that it was in the public interest to grant the declaratory ruling – noting that no oppositions were filed against the petition and that all Executive Branch agencies involved in broadcast station foreign ownership reviews had no objections to the proposed transaction.  We wrote more about the FCC’s process of approving foreign ownership of U.S. broadcast stations on our blog here and here.
  • The FCC’s Media Bureau took several actions dealing with stations that had a history of long periods where they were silent, including:
    • The Bureau denied a petition for reconsideration of its earlier decision finding that a Florida FM station’s license expired as a matter of law under Section 312(g) of the Communications Act because it had either been silent or was operating from an unauthorized site for over one year.  Section 312(g) states that the license of a broadcast station that has not operated as authorized for a full year is automatically cancelled, unless the FCC makes an affirmative determination that there are public interest factors warranting the preservation of the license.  In this case, the Bureau previously concluded that the station failed to provide documentation refuting the Bureau’s conclusion from its investigation that the station was not operating from an authorized site for over one year.  The station also failed to provide any evidence that its unauthorized operations were due to factors beyond its control – which could have enabled the Bureau to exercise its discretion in reinstating its license. 
    • The Bureau granted the renewal application of an Oklahoma AM Station for a one-year license term because the station had been silent for more than four months during the station’s previous one-year license term (a short license term that was imposed, as we discussed here, because the station had been repeatedly silent in the prior license term).  As the station continues to operate at reduced power, the Bureau warned the licensee that, if it did not return to full power during this new one-year renewal period, the FCC could take further actions including potentially holding a hearing as to whether the license should again be renewed.
    • The Bureau also granted a California FM station a one-year license renewal because the station: (1) was silent for over half of its preceding license term; (2) failed to timely upload issues/programs lists to its public inspection file for several quarters during the preceding license term; and (3) failed to provide sufficient information in several of its issues/program lists demonstrating that the station provided public service programming to its community of license.  The Bureau also conditioned the renewal grant on the station coming into compliance with its outstanding public inspection file obligations by March 1, 2024. The Bureau also noted that, for any quarter where the station was silent and thus broadcast no issue-responsive programming, it should have noted that fact in its online public inspection file to explain the absence of a quarterly issues programs list. 
  • The FCC’s Media Bureau also had a flurry of cases dealing with fines on stations for improper operations.  These include the following:
    • The Bureau proposed a $3,500 fine on a Texas LPTV station for operating for almost seven months after it completed construction of new facilities without filing a license application notifying the FCC of the completion of construction authorized by its construction permit. 
    • The Bureau proposed a $9,500 fine against another Texas LPTV station that failed to file its license application after it completed construction of new facilities and did not do so until four months after its construction permit had expired, and then it operated at reduced power for almost eight months without authorization. 
    • The Bureau imposed a $12,500 fine on a Louisiana FM translator station for: (1) failing to obtain FCC consent to change antennas; (2) constructing and operating with an unauthorized antenna for approximately two months; and (3) inaccurately certifying that the station was constructed as authorized. 
    • In another case involving unauthorized operations and false construction certifications, the FCC’s Media Bureau cancelled a $20,000 fine proposed by the Bureau against the licensee of an Olympia, Washington FM translator station.  As we discussed here, the fine had been imposed because the station was not rebroadcasting its authorized primary station and because the licensee falsely certified in the license application that the translator was constructed and operating as authorized.  The Bureau cancelled the fine because the licensee could not pay it due to financial hardship as the fine was more than 20 times the station’s annual income.  Instead, the Bureau admonished the licensee and warned that future violations would result in financial penalties regardless of the licensee’s financial status. 
  • The FCC was also busy with orders dealing with fines and penalties for other violations of its rules, including:
    • The FCC’s Media Bureau entered into a Consent Decree with a group of Illinois radio stations requiring an $8,000 penalty to resolve issues arising from the Bureau’s investigation involving unauthorized transfers of control of the stations’ licensee.  The Bureau found that the stations’ licensee failed to seek FCC consent prior to the transfer of voting stock of the licensee’s sole shareholder to a trust – of which the sole shareholder was also the trustee; and also failed to get FCC consent after the shareholder’s subsequent resignation as trustee.  This is one of several cases that show that changes in the trustee, the death of a controlling owner, or even changes in estate planning by station owners can trigger FCC requirements for approval of changes in control of an FCC licensee, and the penalties that can result when such approvals are not obtained (see, for instance, the cases we noted here, here, here, and here). 
    • The FCC’s Enforcement Bureau issued four Notices of Illegal Pirate Radio Broadcasting to landowners Lake Forest, California, Sweet Home, Oregon, and Brooklyn, New York for apparently allowing illegal broadcasting from their properties.  The Bureau warned each landowner that the FCC may issue fines of up to $2,316,034 under the PIRATE Radio Act if the FCC determines that the landowner continues to permit any individual or entity to engage in pirate radio broadcasting from their property.  The notices are available here, here, here, and here.
    • The FCC’s Media Bureau proposed a $9,000 fine against a California TV station for failing to timely upload its quarterly issues/programs lists to its online public inspection file.  The Bureau alleged that the station had failed to timely upload copies of these lists for a total of sixteen quarters, i.e., five lists more than one year late, six lists between one month and one year late, and five lists between one day and one month late.
  • The FCC’s Media Bureau also dealt with FM allocations issues, including:
    • It issued a Report and Order allocating FM Channel 225A at Lac du Flambeau, Wisconsin, as a Tribal Allotment and a first local Tribal-owned service to the community.  As we previously discussed here, the Tribal Allotment was proposed by a local tribal-affiliated entity pursuant to the FCC’s allotment priority established under Section 307(b) of the Communications Act favoring the provision of radio service to tribal lands by stations owned by tribal governments.  The Bureau will release a public notice in the future announcing when eligible applicants (tribal governments and affiliated entities) may file a construction permit application for the new Tribal Allotment. 
    • The Bureau dismissed a Wyoming FM station’s application to change its community of license to Horse Creek, Wyoming.  The Bureau determined that Horse Creek was not a community deserving of an FM allotment as it is not incorporated or listed in the U.S. Census; the applicant did not provide any reliable evidence from residents of the locality demonstrating that they consider themselves to be a cohesive community; and it did not otherwise provide any other evidence that Horse Creek was a real community.  Finding that some of the information from websites submitted by the applicant was misleading or inaccurate, in a warning to future applicants seeking community of license changes, the Bureau said that, if the applicant relies on online sources for information about their proposed community, they must ensure that the online information is accurate, and they must provide additional information to corroborate the online sources.  In addition, the Bureau noted that applicants must use 2020 U.S. Census data to support their applications.
  • The FCC’s Public Safety and Homeland Security Bureau granted a request filed by a group of Illinois radio stations for an extension of time to comply with the FCC’s requirement that broadcasters prioritize the Internet-based Common Alerting Protocol (CAP) version of an Emergency Alert Service (EAS) message when a station receives both a legacy version and a CAP-formatted version of the same alert.  As we discussed here and here, all EAS Participants should have complied with the CAP prioritization requirement by December 12, 2023 – except for EAS Participants using Sage manufactured EAS equipment, which have until March 11, 2024 to comply; or those who otherwise obtained a waiver (see, for example, waivers granted here, here, and here).  The Illinois stations claimed that they could not comply with the December 12 deadline because their vendor had not fulfilled their new EAS equipment order – despite timely ordering the equipment.  The Bureau cited the stations’ diligence in seeking EAS equipment upgrades and granted the stations until March 11, 2024, to comply with the new EAS rules.
  • The FCC’s Media Bureau designated as mutually exclusive (both could not be granted consistent with FCC’s technical rules preventing interference) two minor modification applications filed on the same day by LPFM stations licensed to Tulsa and Broken Arrow, Oklahoma.  The applications both proposed to move to recently vacated Channel 211.  FCC policy is that minor changes are granted on a first-come, first-serve basis, but no preference is given if two applications are filed on the same day. Thus, the Bureau rejected the Tulsa station’s contention that its earlier filed application should receive first-in-time priority – finding that, as both applications were filed on the same day, no priority is given to an applicant that filed earlier in the day.  The Bureau also rejected the Broken Bow applicant’s assertion that the Tulsa applicant had not shown reasonable assurance of its transmitter site availability, which the Bureau said was not necessary as that applicant is proposing to continue to use its existing licensed site.  The Bureau directed the applicants to find an engineering solution to their mutual exclusivity. 
  • The FCC’s Space Bureau announced that it will host an open house on January 10 to discuss earth station licensing for new applicants and entrants.  The event will include an overview of the FCC’s earth station licensing process and timelines, and a review of frequently asked questions as well as answers to pre-submitted questions.  Interested parties may register and submit questions in advance by sending them to satinfo@fcc.gov.  Additional registration information for the event is available here.
  • The FTC announced that it will hold a virtual summit on January 25 to discuss key developments in artificial intelligence (AI).  The summit will include a discussion among stakeholders regarding the state of technology, emerging market trends, and real-world impacts of AI.  See here for the summit’s agenda and participation information.  The FTC also announced that it began accepting submissions for its Voice Cloning Challenge.  The contest, as we discussed here, is intended to promote the development of ideas to protect consumers from the misuse of AI-enabled voice cloning.  Finally, the FTC released a report detailing key takeaways from an October 2023 public virtual roundtable which, as we discussed here, examined how generative AI is being used and is affecting professionals in music, filmmaking, software development, and other creative fields.  The report states that, although many of the concerns raised during the event are beyond the FTC’s jurisdiction, the agency can use its existing enforcement authority to help protect fair competition and prevent unfair or deceptive acts or practices in the generative AI market.

On our Broadcast Law Blog, we summarized the upcoming regulatory deadlines for broadcasters in January, and also looked ahead to deadlines for the entire 2024 calendar year with special attention to lowest unit charge political windows.  We also took a look at what matters affecting broadcasters the FCC, as well as the courts and other federal agencies, are likely to act upon in the new year.

Earlier this week, we covered the broadcast issues that the FCC may be facing in 2024.  But the FCC is just one of the many branches of government that regulates the activities of broadcasters.  There are numerous federal agencies, the Courts, Congress, and even state legislatures that all are active in adopting rules, making policies, or issuing decisions that can affect the business of broadcasting and the broader media industry.  What are some of the issues we can expect to see addressed in 2024 by these authorities?

For radio, there are music rights issues galore that will be considered.  Early in the year, the Copyright Royalty Board will be initiating the proceeding to set streaming royalties for webcasters (including broadcasters who stream their programming on the Internet) for 2026-2030.  These proceedings, which occur every five years, are lengthy and include extensive discovery and a trial-like hearing to determine what royalty a “willing buyer and a willing seller” would arrive at for the noninteractive use of sound recordings transmitted through internet-based platforms.  Because of the complexity of the process, the CRB starts the proceeding early in the year before the year in which the current royalty rate expires.  So, as the current rates expire at the end of 2025, parties will need to sign up to participate in the proceeding to determine 2026-2030 rates early this year, even though the proceeding is unlikely to be resolved until late 2025 (unless there is an earlier settlement)(the CRB Notice asking for petitions to participate in the proceeding is expected to be published in the Federal Register tomorrow).  Initial stages of the litigation (including the identification of witnesses, the rate proposals, the evidence supporting those proposals, and the initial discovery) will likely take place this year. 

Continue Reading Gazing into the Crystal Ball at Legal and Policy Issues for Broadcasters in 2024 – Part II: What to Expect from the Courts and Agencies Other than the FCC

A new year – and our annual opportunity to pull out the crystal ball and look at the legal issues that will be facing broadcasters in the new year.  We’ve already published our 2024 Broadcasters Calendar and, as we noted before the holidays, it highlights the many lowest unit rate windows for the November election.  With a heavily contested election almost upon us, there may be calls on the FCC to modify regulations affecting political broadcasting or for more monitoring of broadcasters’ online public files, which caused so many issues in recent years (see for instance, our posts here and here).  Even if there are no FCC proceedings that deal with the rules for political broadcasting, the election will be watched by all broadcasters, and all Americans, to see the direction in which the country will head for the next four years.  With that election looming, 2024 may be a very active year in regulation as there traditionally is significant post-election turnover at the FCC no matter which party wins.  With that turnover in mind, we may see Commissioners looking to cement their regulatory legacies in the coming year.

Last year, we noted the number of pending issues at the FCC that had not been resolved because of the partisan deadlock on the Commission while the nomination of Gigi Sohn to fill the one vacant seat was stalled in the Senate.  That deadlock was finally overcome by her withdrawal from consideration and the subsequent nomination and confirmation of Anna Gomez, who was sworn in as a Commissioner in late September.  Since then, the FCC has acted on several long-pending priorities, including the adoption of open internet rules and, for broadcasters, last week’s adoption of an Order resolving the 2018 Quadrennial Review of the local broadcast ownership rules (see our summary of that action here). 

Continue Reading Gazing into the Crystal Ball at Legal and Policy Issues for Broadcasters in 2024 – Part I: What to Expect From the FCC

While we normally publish a weekly summary of regulatory actions relevant to broadcasters, the weekend before last we said that we would take the holiday weeks off – and return with a summary on January 7 of all that occurred over the break – unless there was news in the interim.  Well, there has been news, including the resolution of the FCC’s long-delayed 2018 Quadrennial Review of the broadcast ownership rules.  In addition, the FCC issued a Notice of Proposed Rulemaking proposing to require the reporting by Multichannel Video Programming Distributors such as cable and direct broadcast satellite services concerning any blackouts of TV stations due to a failure of retransmission consent negotiations.  In addition, while not yet adopted, the FCC announced that an item is circulating among the Commissioners for their consideration concerning a proposal to revive the FCC Form 395-B, which required broadcasters to report the race, gender, and ethnicity of all broadcast employees, before the FCC suspended the form more than 20 years ago.

The most significant of these actions is the resolution of the 2018 Quadrennial Review of the local broadcast ownership rules.  As we have noted on this blog many times in recent weeks, the FCC had until December 27 to comply with a court order requiring the agency to conclude the 2018 Review. That Review should have been completed by the end of last year when, instead, the FCC asked initial questions for a new 2022 Quadrennial Review (see our article here).  Following a request for “mandamus” by the NAB, the US Court of Appeals for the District of Columbia ordered the FCC to resolve the 2018 proceeding (see our article for more on the Court order).  The FCC released its decision one day before the deadline, addressing the three major issues in the proceeding and making little significant change in the existing rules for radio and television, with one exception noted below. 

First, the decision addressed the local radio ownership rules, and declined to make any substantial change in those rules.  As we have noted before (see, for instance, our articles here and here), the NAB and many radio broadcasters had argued for a significant relaxation of these rules, or their revocation, given the massive changes in the audio marketplace and in the marketplace for local advertising sales (from which radio receives most of its revenue).  In the 27 years since the current rules were adopted, digital media has substantially eroded radio’s share of audience and advertisers, and trends show that the erosion continues.  Yet the FCC decided that radio was its own unique marketplace, and that it would not serve the public interest for that market to become further concentrated.  The only change of note made by the FCC was that it made permanent the “interim contour method” of determining which stations competed in areas where there are no Arbitron markets.  As that interim methodology has been in place for decades, the decision results in no real change in the radio ownership rules.

For TV, the FCC reached much the same conclusion, finding that broadcast TV is its own market, and again concluding that no significant changes should be adopted.  The FCC’s principal focus was on situations where two of the top 4 TV stations in a market propose to combine.  Such combinations are allowed under the current rules upon a showing that the combination will serve the public interest.  But, as was evident in the case we noted here, those decisions as to whether a particular combination is in the public interest can take the FCC a long time to make, and they are filled with uncertainty.  It was hoped that the FCC would announce rules outlining specific cases where combinations of two of the top 4 stations would be allowed – but the FCC left the decision to be made on an ad hoc basis.  The Commission did, however, announce revisions to how it will determine which stations are in the top 4 in any market.

The other substantive change was to adopt a clarification of the rules to prohibit any agreement or series of agreements that allowed one top 4 station to acquire the programming of another top 4 station and move that programming to an LPTV station or a multicast stream.  FCC policy already prohibits such transactions if the programming is moved to a full-power station owned by the acquiring party.  Now, the Commission has made clear that the programming also cannot be moved to a commonly owned LPTV or multicast stream.  Note that the FCC stated that this does not prohibit a network from itself deciding to move an affiliation to an LPTV or multicast stream – but it prohibits transactions to buy that programming from another in-market station. 

The final rule under consideration was the dual network rule – prohibiting the common ownership of two of the Top 4 TV networks.  In 2018, a potential change to that rule did not seem to be particularly significant as none of the networks appeared to be interested in combining.  In fact, according to this week’s order, none of the networks filed comments in 2018 supporting a rule change.  However, 3 of the 4 networks did support a change in supplemental comments filed in 2021.  That change may not be surprising as there have been rumors in the past year of the potential interest in a sale of at least two of those networks – thus the rule now takes on greater significance.  Yet the FCC left this rule in place without change, finding that the networks still had uniquely large audiences and unique programming that should not be allowed to be concentrated in fewer hands.

Both of the Republican Commissioners issued stinging dissents to these actions, arguing that the majority was blind to the clear changes in the marketplace brought about by digital media.  In coming days, there will no doubt be industry reaction to these decisions as well.  This is not the last article that you will see on this blog about these issues.

This was not the only action of note by the FCC.  A pre-Christmas action was the adoption of a Notice of Proposed Rulemaking seeking public comment on a proposal to require MVPDs to report to the FCC whenever a broadcast television station is removed from their system for more than 24 hours due to a failure in retransmission consent negotiations.  The MVPD would also have to report on the number of subscribers losing access to the television station.  Another report would be filed when the blackout is resolved.  The FCC does not propose any other changes in its rules regarding the negotiations themselves – the proposal is simply for reports to be filed when blackouts occur.

A last significant action worth noting is that the FCC’s report on the items “on circulation” (those orders or rulemaking proposals that have been drafted and are circulated among the Commissioners for review and a vote) as of the end of last week included an Order and Further Notice of Proposed Rulemaking in the docket proposing to bring back the FCC’s Form 395-B.  That report detailed the gender, race, ethnicity, and job function of all station employees. Its use was suspended over 20 years ago when a court suggested that its use was discriminatory because the FCC was penalizing stations that did not meet specific racial or gender quotas in their workforce.  The question of how to collect that information without using it for enforcement purposes has delayed any reinstatement of the filing obligation.  Two weeks ago, Commissioner Starks and 27 members of Congress called (see here, here, and here) for the FCC to reinstate the requirement for broadcasters to provide broadcast workforce diversity data collection through the filing of the From 395-B.  Starks asserted that the FCC was statutorily obligated to collect such information to ensure that broadcasters provide programming that is responsive to the needs and interests of their communities of license through the employment of a diverse workforce. Over two years ago, the FCC asked for comments on bringing back that form (see our article here) and apparently there is now an order looking to do so.   We will be watching for more information as it becomes available.

Regulation never takes a holiday.  Look for more on these actions in the coming weeks.