In the last week, the FCC issued proposed fines to two big radio companies for alleged violations of FCC requirements. One proposed fine was for apparent violations of the FCC’s EEO rules, and the other dealt with the obligations of broadcasters to disclose and follow rules for on-air contests.  In both cases, the proposed fines focused on paperwork issues, not necessarily substantive issues.  These decisions seem to signal to the broadcast industry generally that they need to dot every “I” and cross every “T” to avoid penalties like those proposed in these cases.

The EEO Notice of Apparent Liability, issued unanimously by all four FCC Commissioners, proposed a $32,000 fine on Cumulus Media because of one Annual EEO Public File Report that was uploaded to the online public file of co-owned stations in a Georgia market about 9 months after the due date for uploading the report (and the link to that report on each stations’ website was also missing for that period).  In addition, the FCC said that another fine for failing to self-assess the station’s EEO program was warranted. Broadcasters are required to regularly assess the effectiveness of their EEO program.  But what was that failure to assess?  The evidence relied on in issuing this fine was that the public file report had not been uploaded for over 9 months so, 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.  The 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 (described in our posts here and here).  The alleged violations cited in the decision were simply tied to the failure to upload the required documents.  While the base fines for these violations totaled less than $10,000, the proposed fine was increased because Cumulus previously had been found to have had FCC rule violations for EEO and sponsorship identification matters. Continue Reading Two Proposed FCC Fines Suggest Tougher Enforcement – $32,000 for EEO Paperwork Issues and $20,000 for Alleged Contest Rule Violations

With global tensions obviously at an extremely high level, we thought that we would reprint an FCC warning that we noted in one of our weekly updates of FCC actions just a month ago – alerting companies in all sectors of the communications industry of the possible threat of Russian cyber-hacking and urging that all companies take steps to secure their networks and systems.  In January, the FCC issued a Public Notice urging all communications companies to take steps to ensure the security of their facilities and operating systems. The Notice points to an advisory, Understanding and Mitigating Russian State-Sponsored Cyber Threats to U.S. Critical Infrastructure, authored by the Cybersecurity and Infrastructure Security Agency (CISA), Federal Bureau of Investigation (FBI), and National Security Agency (NSA), setting out threats and steps to take to mitigate risks.  As numerous broadcast companies, large and small, have suffered from cyberattacks in recent years, broadcast companies should carefully review this notice.

In addition, CNN last week reported that the FCC would be investigating Russian influence in media companies.  This seemingly is in addition to actions already taken by the FCC (which have been adopted but are not yet effective as we have mentioned in numerous weekly updates) to require enhanced sponsorship identifications of all programming provided or sponsored by foreign governments, and to investigate all program buyers to ensure that they are not agents of foreign governments.  The FCC is also taking actions to review the security of all US communications networks, issuing a draft Notice of Inquiry to look at cybersecurity issues.  In today’s geopolitical climate, no industry is immune to threats – so take immediate steps so that your company does all that it can to avoid breaches of its networks which can cause all sorts of issues including the total disruption of its operations.  Watch for more on these issues in coming months.

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

  • The FCC proposed a $32,000 fine to a subsidiary of Cumulus Media for EEO and public file violations by a group of stations it previously owned. The Notice of Apparent Liability for Forfeiture details the station group’s failure to timely upload one annual EEO report to the stations’ online public files, to timely post the annual report on the stations’ website, and to analyze its EEO program.  The stations were nine months late uploading their 2018 EEO report due to employee oversight.  The FCC noted that “where lapses occur in maintaining the public file, neither the negligent acts or omissions of station employees or agents, nor the subsequent remedial actions undertaken by the licensee, excuse or nullify a licensee’s rule violation.”  The failure to self-analyze its EEO program was based on the failure to catch the late-filed annual report. As there had been several other EEO and sponsorship identification violations by the company over the last 15 years, the FCC increased the base amount of the proposed fine.  (Notice of Apparent Liability for Forfeiture)
  • The FCC announced that there is sufficient money in the incentive auction reimbursement fund to increase reimbursement allocations for parties affected by the repacking to 100% of verified estimates. The FCC also announced that its contractors will visit a sample of sites to confirm the existence and functionality of equipment paid for from the fund – essentially conducting random audits of the use of the reimbursement funds.  Letters to schedule these visits will be sent by both overnight mail and email to the entity’s reimbursement point of contact and counsel of record, and visits are expected to start next month and continue through 2022.  Full power and Class A TV stations assigned to repack phases 6-10 must have any remaining invoices or documentation submitted by March 22.  (Public Notice)
  • Comments were filed in a Forest Service rulemaking proposing to add an annual administrative fee of $1400 per licensed facility using a Forest Service transmitter site. The fee would be in addition to the rent paid to the Forest Service for the use of the site.  The NAB comments argued that the same flat fee on every user in every market could discourage broadcasters from providing service to rural area residents, especially in the case where translators and boosters in these areas would be paying the same fees as full-power broadcast stations in major markets.  (NAB Comments).
  • The Senate Commerce Committee is scheduled to vote on March 2 on Gigi Sohn’s nomination to fill the final vacant seat on the FCC. If she receives a favorable committee vote, her nomination will head to the full Senate for consideration and a vote.  (Executive Session Notice)
  • An Ohio low power FM station’s license renewal application has been set for a hearing to determine if the licensee made misrepresentations and lacked candor in its dealings with the FCC. At issue are the makeup of the licensee’s board of directors and the licensee’s representations to the FCC of who served on its board and when, including in assignment and transfer applications and in multiple written responses to letters of inquiry. These inquiries suggested an unauthorized transfer of control.   (Hearing Designation Order)
  • A federal appeals court denied the NAB’s attempt to stay the effect of the FCC’s foreign government entity sponsorship identification rules, though the parties are still scheduled to argue the merits of these rules before the Court on April 12. The rules require that stations disclose when programming has been paid for or provided by a foreign governmental entity and take investigatory steps whenever they sell any blocks of program time to determine if any buyer of program time is a representative of a foreign government. The NAB has been arguing that the rules, especially the requirement that all buyers of program blocks be investigated for foreign-government ties, are unduly burdensome and have not been adequately justified.  Even though the stay was denied, the new rules are not yet effective while undergoing a Paperwork Reduction Act review.
  • We posted on our Broadcast Law Blog our monthly feature on important dates and deadlines for broadcasters in March and early April. These include EAS and Next Gen TV rulemaking comments, a GMR music license deadline for commercial radio stations, an initial filing deadline to participate in an auction for new TV stations (Auction 112), license renewal deadlines, and requirements for the uploading of quarterly issues/programs lists.  (Broadcast Law Blog)

March is one of those months where no regularly scheduled FCC deadlines fall.  But there are still plenty of other deadlines and dates of importance to broadcasters that fall during this month, from comment dates in rulemaking proceedings, to the start of an auction for new TV stations and the completion of the reimbursement cycle for certain stations involved in the TV repack, to deadlines for radio stations to sign up for the GMR license agreement, and even, with daylight savings time upon us, the time for certain AM stations to adjust their operating parameters.

Let’s start with the rulemaking proceedings.  On March 11, comments are due on an FCC Notice of Proposed Rulemaking that seeks to enhance visual EAS messages to assist people who are deaf or hard of hearing.  Reply comments on the NPRM are due by March 28.  The same Federal Register notice that set these comment dates also references an associated Notice of Inquiry that asks for suggestions on how to improve the current EAS daisy chain architecture to better deliver alerts.  Comments and reply comments on the NOI are due by April 11 and May 10, respectively.

Interested parties that want to reply to comments submitted on the FCC’s Second Further Notice of Proposed Rulemaking in the ATSC 3.0 (Next Gen TV) proceeding must have those reply comments in by March 14.  In that proceeding, the FCC proposes to allow Next Gen TV stations to include within their license certain of their multicast streams that are aired on “host” stations during a transitional period.  Under the FCC’s proposals that are designed to clear up which entity is responsible for legal and regulatory compliance, such multicast streams will be part of the originating station’s license, not that of the “host” station.  See the Federal Register notice, here, and read the comments submitted to the docket, here. Continue Reading March Regulatory Dates for Broadcasters: EAS and Next Gen TV Rulemaking Comments, Incentive Auction Reimbursements, TV Auction, GMR Licensing Deadline, and More

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

  • Following up on its proposals from last summer to clean up radio technical rules that were inconsistent, outdated, or inaccurate, the FCC adopted an order implementing all but one of the proposed changes. The changes eliminate the rule on the maximum rated power of AM transmitters, finding it no longer needed as long as a station operates within its authorized power limits.  This change is expected to increase the availability of used transmitters for AM stations, as a station can buy any class of transmitter to achieve its authorized power rather than being limited to buying transmitters that correspond to specific AM power levels.  The rule changes that were adopted also clarify city-coverage requirements for NCE FM stations, lessen second-adjacent channel interference protections to Class D NCE FM stations, and update some FM spacing requirements in border areas to conform to Mexican and Canadian treaty obligations.  The Commission declined to adopt one proposed change that would have eliminated a rule that requires any application that proposes to locate a new FM antenna within 60 meters of an existing FM or a TV station to show how its operation would affect existing operators.  While seldom used, commenting parties argued (and the Commission agreed), that retaining the rule reinforced the policy that “newcomers” to a transmitter site are responsible for resolving interference complaints to existing stations. (Report and Order)
  • The NAB filed with the FCC a comprehensive “ex parte” statement in connection with the FCC’s Quadrennial Review of its ownership rules. In a 56-page letter, with additional attachments, the NAB set out in detail why it believed that parties that opposed ownership relaxation – principally for the radio industry – were wrong on the law and the facts – citing all the record evidence that showed that relaxation of the local ownership rules is necessary to allow radio to compete with the digital media companies that now unquestioningly compete with both radio and TV for audience and advertising dollars (Ex Parte Statement).  The FCC is supposed to complete the current Quadrennial Review begun in late 2018 and begin its next Quadrennial review of ownership rules at some point this year.  See our article here for more on this review.
  • More stations – commercial and noncommercial – signed consent decrees with the FCC over online public file violations. Be sure that you are staying on top of your public file obligations whenever they arise, and especially when it is time for renewal of your license.  Examples of the recent consent decrees are here and here.
  • One station was ordered to pay $1,500 and another station faces a similar fine for failing to file license renewal applications on time—one filing was made about six weeks late and one filing was made right before the station’s license was set to expire. Make sure you stay on top of the deadlines for your regulatory filings to avoid such issues.  (Forfeiture Order and Notice of Apparent Liability for Forfeiture)
  • Satellite TV provider DISH Network and TV station group TEGNA settled their long-running retransmission consent dispute. Both companies had accused the other of failing to negotiate in good faith for retransmission consent as required by the FCC’s rules.  The FCC dismissed the complaints once the dispute was resolved by the parties. (Order)
  • We posted on our Broadcast Law Blog two articles on recent industry events:
    • The first article, here, noted that, in certain markets, controversial ads from political candidates ran during last week’s Super Bowl. The article looked at why broadcasters had to run those ads despite their controversial content, as the “no censorship” provision of Section 315 of the Communications Act forbids stations from editing a candidate ad (with some very limited exceptions).
    • The other article was the second part of our series looking at the music royalty issues surrounding the disputes about Joe Rogan’s podcast on Spotify. In Part 2, we looked at how music rights and royalties impact decisions like those of Neil Young and other musicians who wanted to pull their music to support the protest over Rogan’s podcast.  See the post, here.

 

Last week, we discussed the controversy started by Neil Young removing his music from Spotify because of its carriage of Joe Rogan’s podcast.  In that article, we looked at the relationship between music royalties and the decision of Spotify and other music services to emphasize podcasts and other talk programming over music.  Today, we will look at how music rights and royalties impact decisions like those of Neil Young and other musicians who may have wanted to pull their music to support the protest over Rogan’s podcast.

At its most basic level, there is the question of how much the artists themselves stand to lose from the withdrawal of their music from a service like Spotify.  Young himself said that he would lose 60% of his streaming revenue from pulling his music, which one source estimated to be over $700,000.  Given the other streaming services that now exist, his music is still available and generating revenue on his catalog, though apparently less than the amount generated by Spotify.  The 60% number in and of itself is interesting as, while artists and other music representatives complain about the Spotify per song payouts (likely because they offer a free, ad-supported tier with lower payouts than those from subscription services), the wider variety of services offered by Spotify seem to bring in big numbers of listeners – likely including many who would not subscribe to a pay-music service. Thus, because of the sheer numbers of listeners, and assuming that Young is representative of other artists, Spotify is responsible for the majority of the streaming revenue that has allowed the music industry to enjoy in recent years some of their most profitable years ever.  Even with these banner payouts, as we noted in our article on the Spotify side of the equation, the music industry is still not satisfied, recently calling the payouts “appallingly low.”  More on that issue in an upcoming post on the discussions of a US broadcast radio sound recording performance royalty. Continue Reading Spotify, Joe Rogan and Neil Young – Looking at the Rights and Royalty Issues Behind the Story (Part 2 – The Rights of the Artists to Pull Their Music)

Ads planned to run in yesterday’s Super Bowl by Republican candidates in primaries to select candidates for 2022 senate elections drew comments and controversy even before the game, with some calls to block the ads from the air.  Ads for a candidate in Pennsylvania used the “Let’s Go Brandon” language generally acknowledged to be an allusion to a profanity directed at President Biden (see article here).  In Arizona, a Senate candidate showed the candidate in a fictionalized old west high noon shootout with characters playing President Biden, Nancy Pelosi and Senator Mark Kelly (see article here), which some found particularly offensive because of its associating gun violence with Kelly whose wife, Gabby Giffords, was a victim of such violence while serving in Congress.  There were calls for the stations running the game to reject these ads, or for the FCC to penalize stations for those ads.  While popular sentiment may call for such actions, the law does not allow that to happen,

We have written about this issue many times before (see, for instance, our refreshers on the rules with respect to candidate ads, here and our article here), yet these issues still come up all the time whenever a legally qualified candidate produces a controversial ad.  Broadcasters need to know the rules so that they don’t pull an ad that they are not allowed to censor under the FCC’s rules, and that they don’t run one for which they could in fact have liability. Continue Reading Controversial Super Bowl Political Ads on Local Stations – Why They Can’t Be Pulled

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

  • Global Music Rights (GMR) and the Radio Music Licensing Committee (RMLC) announced that enough broadcasters had agreed to GMR licensing terms to make the negotiated settlement between these groups effective. As we wrote here in early January, GMR and RMLC entered into a conditional settlement to end their long-running court battle over music royalty rates, but enough radio stations had to agree to the licensing terms set by GMR before the settlement would become effective.  Now that the threshold has been reached and the deal is effective, GMR has extended through March 31 the sign-up period for its license agreements for commercial radio stations.  By that date, commercial stations either need to sign the agreement, purge GMR music from their stations, or negotiate a different deal with GMR, or they will be subject to infringement actions.  See our post on the Broadcast Law Blog for more information.
  • The FCC announced that Auction 112, an auction for the rights to build new full-power TV stations in 27 markets, will move ahead with the initial “short-form applications” (FCC Form 175) necessary to participate in the auction due between 12pm EST on March 17 and 6pm EST on March 30. Bidding will begin on June 7.  See the Public Notice for details on the filing window, upfront payments, and bidding procedures.  The list of channels available in the auction on which new TV stations can be built is available, here.
  • The FCC announced that, in 27 communities, FM channels in the commercial band that had been reserved for noncommercial use will no longer be reserved. Applications or authorizations for those reserved channels did not result in the construction of new noncommercial stations, so the FCC has decided to remove the noncommercial reservation and make those channels available for commercial use in a future FM auction.  The FCC’s Order, including a list of the vacant channels that will be auctioned, is available here.
  • Gigi Sohn went before the Senate Commerce Committee for questioning for a second time as senators continue to consider her nomination for the last open Commissioner’s seat on the FCC. Sohn was questioned about her role as a board member for Locast (the now-defunct TV streaming service that was found to have violated copyright law by rebroadcasting TV stations without permission), her decision to recuse herself from certain matters if she is confirmed, and how her past work as a public interest advocate would influence her decisions on the Commission.  Her nomination must clear the committee before it can be taken up by the full Senate, and the timing of any action is uncertain.  See archived video of the hearing, here.
  • A Federal Register notice announced that starting March 14, broadcast stations, in assessing political advertising from purported write-in candidates, will need to include in their review the candidate’s social media presence and creation of campaign website when determining if the candidate has made a “substantial showing” of a bona fide candidacy. If a write-in candidate can make the substantial showing, he or she is considered a “legally qualified candidate” entitled to all the benefits and protection of the FCC’s rules, including equal opportunities, lowest unit rates and, for candidates for federal office, reasonable access to buy advertising time on commercial stations.  A second rule change that requires broadcasters to upload documentation about federal issue ads to their public file will be effective after additional review to assess the rule’s compliance with the Paperwork Reduction Act.  Broadcasters already upload this information to their public file, and this update merely brings the FCC’s rules in line with the requirements of federal statute and thus has no practical effect on a station’s political file obligations.  We wrote in more detail about these changes, here.  (Federal Register)
  • Comment dates are now set on FCC proposals to reform certain EAS rules. These include a Notice of Proposed Rulemaking that seeks to enhance visual EAS messages to assist people who are deaf or hard of hearing and a Notice of Inquiry that asks for suggestions on how to improve the current EAS daisy chain architecture to better deliver alerts.  Comments and reply comments on the NPRM are due by March 11 and March 28, respectively.  Comments and reply comments on the NOI are due by April 11 and May 10, respectively.  (Federal Register)
  • The US Court of Appeals for the DC Circuit set April 12 as the date for the FCC and NAB to present oral arguments over the FCC’s new rules on sponsorship identification for programming provided by a foreign governmental entity. Under the new rules, stations will have to disclose when certain programming has been provided by a foreign governmental entity and take investigatory steps whenever they sell any blocks of program time to determine if any of buyer of program time is a representative of a foreign government.  The NAB has argued that the new rules exceed the FCC’s authority and that the required disclosures violate the First Amendment.
  • The FCC has designated for a hearing the renewal application of an Idaho radio station based on the station’s record of extended silence and operation at significantly reduced power. The FCC found that the station was silent for 80% of the time from the current licensee’s acquisition of the station in February 2018 through present day.  The hearing will determine if the station adequately served the needs of its community in light of the extended silent periods, if the station’s license expired due to its prolonged silence (licenses expire if a station is silent for over a year unless a public interest showing is made that the license should be preserved), and ultimately if the renewal should be granted.  Whenever a station goes silent, minimize the period when it is not operating to avoid these issues.  (Hearing Designation Order)
  • The FCC’s Audio Division released three decisions dealing with various issues that come up in connection with FM stations changing channels to improve their facilities.
    • In the first, the Division’s decision shows the difference in treatment between commercial FM stations that change their city of license and translators and other stations who take the same action. The change in a city of license for a commercial FM station granted through a minor change application is effective immediately upon the grant of the construction permit, even before the station has built the new facilities to serve its new community.  Until it builds the new facilities, the permit holder operates from its original community under an “implied STA” which can be revoked if it delays building its new facilities.  In contrast, a change in the city of license for an FM translator (as well as AM and reserved-band noncommercial FM stations) is not effective until it has constructed the new facilities and filed a license to cover those changes.  (Letter Decision #1)
    • A second case dealt with an FM station that was ordered to change channels to accommodate the channel change of another broadcaster. To allow for new FM stations or station upgrades of their facilities, another station can be forced to change its channel of operation if the forced change is to a channel that allows an equivalent power operation from the station’s existing transmitter site. The broadcaster seeking the change must agree to reimburse the station that is being forced to change its reasonable costs incurred in the change.  In a decision released this week, the Commission ordered a station that did not cooperate in changing its channel after having been ordered to do so to cease operations as the station that had sought the changes was ready to commence its operations.  (Letter Decision #2).
    • The third case considers also considers a forced channel change but focuses on the reimbursement due to the station being forced to change channels to accommodate the upgrade of another station. In most cases, the parties come to an agreement as to the reasonable costs for the channel change.  This was one of the rare cases where the Commission had to intervene to determine the proper amount of the reimbursable costs, ordering the upgraded station to pay the station that was forced to change channels $96,566.58, about $60,000 more than the upgraded station argued was reasonable.  The FCC determined that a costs of a new transmitter and for extensive legal fees incurred to collect the reimbursement were legitimate costs that should be paid by the benefitting station.  (Letter Decision #3)
  • With Spotify and Joe Rogan’s podcast (and Neil Young’s decision to remove his music from the platform) in the news over the last couple of weeks, we wrote on the Broadcast Law Blog about some of the rights and royalty issues behind the story. Read the post for some insight into why Spotify has poured money into podcasting and why it may be reluctant to drop Rogan, even if some of his content is objectionable.  (Broadcast Law Blog)

 

The last two weeks have been filled with stories about Neil Young, Joni Mitchell and other artists pulling their music from Spotify in protest of its carriage of the Joe Rogan podcast.  While the political statements made by these actions generate the news, there are rights and royalty issues behind the story that are worth exploring.  While Washington Post articles here and here touch on some of these issues, looking at them in more depth helps to explain the importance that Spotify places on podcasts and why it would be reluctant to pull a podcast that has so many listeners (reportedly over 10 million per episode), even if the podcast has content that may be objectionable.  The issues raised by this controversy are also tied into two other stories that made the news for broadcasters this last week – Congressional hearings on the Journalism Competition and Preservation Act and on a potential sound recording performance royalty on over-the-air radio – topics we will cover in subsequent articles.

Let’s first look at the question of why Spotify, which started as a music service, has pushed so hard into podcasting.  We will follow up with a discussion of the issues on the artist side of the equation in a second article.  Spotify reportedly paid more than a hundred million dollars for the rights to the Rogan podcast.  It has also invested heavily in other podcast companies – including buying podcast technology companies including Anchor and Megaphone, and podcast content aggregators including Gimlet and the Ringer.  Deals with celebrities for their podcasts include those with former President Obama for his podcast with Bruce Springsteen, as well as an announced content creation deal with Prince Harry and Meghan Markle.  Why would a music service spend so heavily to get into spoken word programming? Continue Reading Spotify, Joe Rogan and Neil Young – Looking at the Rights and Royalty Issues Behind the Story (Part 1 – Why Spotify Has Been Promoting More Podcasts)

In a press release issued today, the Radio Music License Committee (RMLC) and performing rights organization Global Music Rights (GMR) announced that enough commercial radio stations signed the GMR licensing agreement to allow the settlement of the RMLC/GMR litigation to become effective.  As we wrote when the settlement was announced early last month, enough radio stations to satisfy GMR that its disputes with the radio industry would be resolved had to sign the licensing agreement to make the settlement effective – otherwise the litigation would continue.  Apparently, that threshold number was met, and the settlement is now effective.

As we wrote earlier, commercial radio stations had few options with respect to the settlement.  Either they signed it,  tried to negotiate their own settlements, or  had to stop playing GMR music which, in many formats, is a difficult if not impossible task given the songwriters that GMR has signed who have full or partial copyrights in a wide variety of popular music (see our article here about how even a partial interest in a song’s copyright, what is referred to as a “fractional interest,” can give a performing rights organization – a PRO – like GMR the ability to demand licensing fees when that song is performed publicly, including when it is broadcast on a radio station; see the GMR catalog of songwriters here).  As the GMR agreement is now effective, stations that can’t pull all GMR music from their stations or otherwise reach a licensing agreement have one last chance to accept the agreement.  GMR has agreed to give stations until March 31 to sign the agreement or they will no longer have rights to play any of the music in which its songwriters have an interest.  Consult your attorneys and advisors now if you have not already signed the GMR agreement.