The FCC’s order on this year’s annual regulatory fees was released by the FCC this week.  The FCC rejected calls to forgive broadcast regulatory fees because of the economic fallout of the pandemic, noting that only Congress could pass such relief, as the FCC is required by law to collect fees sufficient to cover the costs of its operations.  The Commission did, however, offer some terms for the payment over time of the fees by companies that are hard-hit by the economic conditions that resulted from COVID-19, and simplified the waiver process for stations that can demonstrate that they cannot pay the fees without imperiling their service to the public.  The order also rejected the NAB’s request to revisit the fees for radio, though some minor downward adjustments were made in those fees based on the FCC’s finding that it had undercounted the number of radio stations that were to share in the payment of these fees.

The FCC determined that it could not waive all regulatory fees for broadcasters, or broadly excuse them from the 25% late-payment penalty, because these obligations are in the statute and cannot be waived without Congressional authorization.  The FCC is required by law to collect these fees before the October 1 start of the next fiscal year in an amount sufficient to reimburse the US Treasury for the costs of operating the Commission.  While the FCC felt itself powerless to totally waive the rules, it did simplify the process for individual stations to make requests for waiver of the fees if the payment of the fees would imperil their ability to serve the public or to extend the payments out over time – without the need for any upfront payment of a significant portion of the fees.  The FCC noted that the Office of the Managing Director will be issuing a separate Public Notice establishing the process for asking for waiver or deferral, so watch for the notice coming soon as these request will likely need to be filed before the payment deadline, which will also be established in a subsequent public notice.  But the Order does say that the requests for waiver and payment over time can be made in a single email to the FCC, and that the Managing Director’s office is to work with broadcasters to try to help them provide the necessary documentation to support the waiver or deferral of payments. Continue Reading FCC Releases Order on Regulatory Fees – No Widespread Waivers of Fees But Some Deferred Payments Possible – Payment Dates Coming Soon

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

  • The FCC this week released a Notice of Proposed Rulemaking proposing changes to the fees it charges broadcasters for filing applications like assignments, transfers of control, construction permits, and minor modifications. The new fees are based on the FCC’s attempt to estimate its costs in processing applications, resulting in a proposed increase in some fees and a decrease in others (e.g. an application for a new AM or FM station will be almost $500 cheaper if the FCC’s proposal is adopted, while the filing of a Form 316 short-form assignment or transfer of control application will cost $260 more).  Comments and reply comments on the proposed new application fees will be due 30 days after the Notice is published in the Federal Register, with Reply comments due 45 days from that publication.  (NPRM)
  • The Radio Music License Committee announced a settlement with SESAC on commercial radio music royalties covering the period from January 1, 2019 through the end of 2022. The settlement essentially carries forward the royalties that broadcasters have been paying SESAC for the last three years.  See our Broadcast Law Blog article on the settlement here.  The new blanket agreement is available on the RMLC website here and instructions from SESAC can be found here.
  • The NAB this week hosted a webinar with FCC speakers on the considerations that broadcasters should keep in mind in deciding whether to accept a lump-sum payment for costs that they will incur in making changes to authorized satellite dishes in the C-Band. An election to take a lump-sum payment must be made by September 14 and obligates the broadcaster to assume all future costs of the transition itself.  The decision is not as straightforward as it might seem.  The free webinar can be assessed on the NAB website here.  We wrote about these considerations on our Blog here.
  • Hurricane Laura and Tropical Storm Marco have caused the FCC to activate its Disaster Information Reporting System (DIRS) for dozens of designated counties in nearly 20 states and Washington, DC. The FCC asks communications providers, like TV and radio broadcasters, to voluntary report on the status of their signals and infrastructure to give the FCC a sense of the on-the-ground situation and to help inform its deployment of recovery resources.  As of Friday afternoon, four TV stations, 23 FM stations, and one AM station reported being out of service.  (DIRS Public Notice)  (August 28 DIRS Status Report)
  • We published on the Broadcast Law Blog our look at some of the regulatory dates broadcasters should be aware of in September and early October. The upcoming dates include those for annual regulatory fees, the opening of the lowest unit rate window for advertising by political candidates, the C-Band lump-sum reimbursement election deadline, rulemaking comments, and a plethora of routine regulatory obligations in early October.  (Broadcast Law Blog)

 In the week coming up, keep your eyes open for an FCC decision on the regulatory fees that broadcasters must pay in September.  Look for a decision as to the amount of the fees to be paid by broadcasters (particularly whether there will be any reduction in radio fees as urged by the NAB), and the deadline by which these fees must be paid.

As broadcasters continue to respond to the coronavirus while sometimes juggling work duties with family responsibilities like at-home virtual schooling, it would be easy to overlook regulatory dates and responsibilities.  This post should help alert you to some important dates in September that all stations should keep in mind – and we will also provide a reminder of some of the dates to remember in early October.  As in any year, as summer ends, regulatory activity picks up – and this year appears to be no different.

Each year, in September, regulatory fees are due, as the FCC is required to collect them before the October 1 start of the new fiscal year.  We expect that the final amount of those fees, and the deadlines and procedures for payment, should be announced any day.  For broadcasters, one of the big issues is whether those fees will be adjusted downward from what was initially proposed by the FCC in their Notice of Proposed Rulemaking in this proceeding.  The National Association of Broadcasters has been leading an effort (we wrote about this here and NAB detailed recent meetings between CEO Gordon Smith and members of its legal department with FCC staff here and here) urging the FCC to reduce the amount of fees owed by broadcasters, in part because of the financial toll the pandemic has taken on the industry and in part because the proposed fee structure, which is determined by estimates as to how many FCC staffers are detailed to regulating an industry and the related benefit that industry receives, inaccurately reflects the number of FCC employees who work on radio issues.  Look for that decision very soon. Continue Reading September Regulatory Dates for Broadcasters: Annual Regulatory Fees, Lowest Unit Rate Window Opening, C-Band Reimbursement, Rulemaking Comments and More

Many broadcasters who receive satellite-delivered programming do so through satellite dishes picking up transmissions from spectrum referred to as the C-band.  Part of that spectrum is to be auctioned to wireless users for 5G service starting in December.  Because of that auction, those using the band to receive satellite-delivered programs will be compressed into a smaller swath of spectrum which will require the reconfiguration of their technical facilities.  Those broadcasters who timely registered their dishes are entitled to reimbursement for the costs of the changes in their technical facilities necessitated by this repacking – but they have a choice to make by September 14 as to how to receive that reimbursement.  That choice was explained in a helpful webinar hosted by the NAB which can be ordered on the NAB website here.

As explained in far more detail in the webinar, those affected by the shrinking of the C-band can choose a traditional method of reimbursement, where the satellite carrier will take care of most of the transition costs (for which it will receive reimbursement) and the broadcaster would be able to file with the FCC and be reimbursed for certain costs set forth in the FCC’s Cost Catalog.  However, the FCC has offered an alternative reimbursement methodology, where the broadcaster gets a lump-sum payment and it is then responsible for the purchase and installation of all required equipment, repositioning, and other changes that are necessary to communicate in the upper portion of the C-band.  For some broadcasters planning to adopt alternate delivery methods for their programming, such as by fiber or Internet, that lump sum payment may be an attractive alternative.  For others, a careful analysis of the costs of buying and installing new equipment on their own needs to be weighed against what might be the simpler and more cost-effective option of allowing the satellite company to quarterback the technical changes.

If a broadcaster wants to accept the lump-sum payment, that election needs to be made by September 14.  Carefully review the FCC notices on this election (here and here), listen to the webinar, and consult your legal and engineering advisors for full details on the information required for the election and to assess which option best suits your needs.

The Radio Music License Committee and SESAC yesterday announced an extension of the terms of the royalty agreement that is currently in place between the commercial radio industry and this performing rights organization.  As we wrote here, the agreement under which radio broadcasters have been paying for the last three years was arrived at after an arbitration process following the settlement of an antitrust proceeding, and resulted in a dramatic reduction in the amount of the royalties paid to SESAC prior to that litigation.  The antitrust settlement calls for arbitration every three years if RMLC and SESAC cannot voluntarily arrive at new royalties.  The initial three-year period expired at the end of the 2018.  The parties have been negotiating a deal that covers the period starting from January 1, 2019, and the new deal that they arrived at runs for four years through December 31, 2022.  The new blanket agreement is available on the RMLC website here and with instructions from SESAC here.  It principally carries forward the deal terms of the prior agreement.

Note that in many trade press reports there have been statements that the agreement covers the public performance of SESAC music, not just on over-the-air radio but also on the streams of broadcast stations and in other “new media transmissions.”  These new media transmissions, under the terms of the agreement, also include “radio-style podcasts.”  As we noted in connection with RMLC’s recent license agreement with BMI, these agreements cover the public performance rights in a podcast, but that is not the only music license that you need to use music in a podcast.  As podcasts are downloadable and playable on-demand, and they involve the synchronization of music and speech into a unified recorded work, the rights under Copyright law to make reproductions and likely the right to make derivative works of these recordings need to be secured.  These rights need to come directly from the copyright holders in both the musical composition (the words and music of a song) and the sound recording (that song as recorded by a particular band or singer).  The public performance rights from ASCAP, BMI and SESAC are insufficient by themselves to give you the rights to use music in a podcast, which is why there are so few podcasts that make extensive use of major label recorded music. Continue Reading RMLC and SESAC Agree to Extend Current License Agreement for Commercial Radio – Music Licensing Update for Radio

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

  • We noted in last week’s update that the FCC’s Annual Regulatory Fees Order, setting the the fees to be paid by broadcasters by October 1, has been drafted and is likely to be released by the FCC very soon. In advance of the Order being released, NAB CEO Gordon Smith talked with Chairman Ajit Pai and expressed his concern that the proposed fee structure, which is determined by estimates as to how many FCC staffers are detailed to regulating an industry and the related benefit that industry receives, inaccurately reflects the number of employees that work on radio issues.  The NAB has been urging the Commission to freeze radio regulatory fees at last year’s amounts rather than increasing the amount of those fees as the Commission proposed in its Notice of Proposed Rulemaking.  Watch for a final decision from the FCC on regulatory fees possibly this week.  (NAB Phone Call Summary)
  • Earth station licensees, including broadcasters who receive satellite-delivered programming, who want to receive a lump sum payment for their costs associated with technical changes made necessary by the upcoming repacking of the C-Band, must make the election to receive that lump-sum payment (instead of having to prove their actual expenses) by September 14. The deadline had been August 31 but was extended this week.  (Order).  The NAB will be conducting a webinar to explain what this election means (NAB Notice of Webinar).
  • Comments were due by Monday, August 17 in the FCC’s Broadcast Internet proceeding (looking at the use of TV ATSC 3.0 spectrum for datacasting). The FCC sought comment on potential real-world uses for broadcast internet and how the FCC might change its rules to foster deployment and adoption of these new services.  Reply comments are due by August 31.  We took a closer look at this proceeding here and here.  (Docket 20-145 Comments)
  • Broadcasters and other media groups submitted their reply brief in National Association of Broadcasters, et al. v. Prometheus Radio Project, et al. This is the FCC’s appeal to the Supreme Court of the Third Circuit decision throwing out the FCC’s 2017 order changing many of the broadcast ownership rules – including the abolition of the newspaper-broadcast cross-ownership rule.  The justices will review the briefs filed in this case and decide this Fall whether to consider the appeal.  If they decide to do so, the Court’s decision would likely come in 2021.  If the Supreme Court declines to hear the case, the Third Circuit decision stands, and the FCC will have to come up with a new evaluation of its ownership rules consistent with that decision.  You can catch up on the twists and turns of this case here.  (Industry Reply Brief)
  • With an eye on the November 3 general election and the September 4 opening of the lowest unit charge “political window,” we published to the Broadcast Law Blog a review of the FCC rules and policies that affect the rates a broadcaster can charge for political advertising. (Broadcast Law Blog)
  • School administrators across the country are grappling with whether and when students should physically return to schools, with much interest about how college athletics should be handled. Receiving less attention has been how operators of noncommercial stations licensed to educational institutions should navigate the FCC rules on their minimum required operations when students are absent from campus, on a modified attendance schedule, or adhering to other policies that make running a broadcast station difficult or impossible.  The FCC in March released guidance for these stations to follow when schools send their students home, namely that college stations could treat campus shutdowns as a “recess period” under the minimum operating schedule rules.  Under those rules, during a recess, stations licensed to schools do not need special FCC permission to be silent.  On our Blog this past week, we looked at how those FCC minimum operating rules apply to today’s conditions at educational institutions.  The facts of each situation will be different, so be sure to get in touch with your station’s FCC lawyer to evaluate your own case.

 

It’s a school year like no other – and broadcast stations that are licensed to colleges and other schools are likely as disrupted by the pandemic as is anyone else.  As we wrote here, the FCC in March allowed noncommercial radio stations licensed to educational institutions to consider period when schools were closed for in-person instruction as school breaks or “recess” periods when the minimum operating schedule for these stations did not apply.  Now that we are beginning a new school year, how is the FCC treating these stations?

From informal conversations that I have had with the FCC, the guidance delivered above is still in place – so if your school is still virtual, your radio station need not meet the minimum operating schedule required of noncommercial stations.  You can continue to treat the period when students are generally not on campus as a recess when the station does not need to meet these minimum operating requirements. Continue Reading Noncommercial Stations Licensed to Educational Institutions and the FCC’s Required Minimum Operating Schedule in a Pandemic Disrupted School Year

With the lowest unit charge window for the November elections going into effect on September 4, just two and a half weeks from now, we thought that it was a good idea to review the basic FCC rules and policies affecting those charges. In this election, with the Presidency and control in both houses of Congress at stake as well as many state offices, and with in-person campaigning limited by the pandemic, there may have never been a time when broadcast advertising was more important to political candidates – and likely more in demand by those candidates.  Your station needs to be ready to comply with the FCC’s political advertising rules. Today, we will look at lowest unit rate issues.  Lowest unit charges (or “Lowest Unit Rates”) guarantee that, in the 45 days before a primary and the 60 days before a general election, legally qualified candidates get the lowest rate for a spot that is then running on the station within any class of advertising time running in any particular daypart. Candidates also get the benefit of all volume discounts without having to buy in volume – i.e., the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class. But there are many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.

It is a common misperception that a station has one lowest unit rate, when in fact almost every station will have several – if not dozens of lowest unit rates – one lowest unit rate for each class of time in each daypart. Even at the smallest radio station, there are probably several different classes of advertising spots. For instance, there will be different rates for spots running in morning drive than for those spots that run in the middle of the night. Each time period for which the station charges a differing rate is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, each rotation that offers substantially different benefits to an advertiser will be its own class of time with its own lowest unit rates (e.g. a 6 AM to Noon rotation is a different class than a 6 AM to 6 PM rotation, and both are a different class from a 24-hour rotator – and each can have its own lowest unit rate). So, in the same time period (e.g. morning drive on a radio station), there may be spots running in that period that have multiple lowest unit rates (e.g.  spots may end up running in that period that were sold just for morning drive, as well as cheaper spots that were sold as part of a 6 AM to 6 PM rotation that just happened to fall within that period).  Federal candidates can buy into any of those classes of time, and they take the same chances as does a commercial advertiser as to where their spots will land (e.g. if a candidate buys a 6 AM to 6 PM rotator, and that rotator ends up in morning drive, another candidate may buy that same rotator the next week and end up at 4 PM. That second candidate can only guarantee that they will end up in morning drive by buying a spot guaranteed in that time period). Continue Reading Lowest Unit Rate Window for the November Election Opens on September 4 – Thoughts on Computing Your Lowest Unit Charges to Political Candidates

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

  • The FCC released two Public Notices tied to extreme weather events.
    • In one Notice, the FCC reminded video programming distributors—including broadcasters—of their obligations to make televised emergency information accessible to persons with disabilities. Commission rules define “emergency information” as “[i]nformation, about a current emergency, that is intended to further the protection of life, health, safety, and property, i.e., critical details regarding the emergency and how to respond to the emergency.”  The Public Notice cites deadly tornadoes in Tennessee, earthquakes in Puerto Rico, and the COVID-19 pandemic as events that would be covered by this rule.  The Notice details the accommodations that must be made to reach individuals who are deaf, hard of hearing, blind, or visually impaired.  This includes the need to provide actionable emergency information available visually when it is provided aurally in a TV broadcast (e.g. through open captions or other visual means) and, when a television station provides emergency information in a visual crawl during entertainment programming, it must also provide that information aurally on a subchannel.  We took an in-depth look at some of those accommodations, here.  (Public Notice)
    • In another Notice, the Public Safety and Homeland Security Bureau announced activation of the Disaster Information Reporting System (DIRS) in response to Iowa’s recent derecho and encouraged communications providers like broadcast stations, cable, and wireless companies that serve at least one of the 24 designated Iowa counties to update the Commission on their operational status. As of Friday morning, nine broadcast stations (8 FM, 1 AM) reported being out of service.  The Bureau often activates DIRS in advance of or in the aftermath of extreme weather events and, as we are in hurricane season and DIRS is likely to be activated again this year, broadcasters should become familiar with the system and be prepared to report their operational status if extreme weather hits their area.  (Public Notice)
  • The Media Bureau sided with a Colorado TV broadcaster in a dispute with a satellite TV carrier over delivery of the station’s signal. The Bureau concluded that the change in the method for the delivery of the station’s signal to the satellite provider’s uplink facility from a closed circuit fiber line to over-the-air delivery via a subchannel on the licensee’s low power TV is permitted.  The FCC concluded that a must-carry broadcaster can deliver its signal to the uplink facility in any way it chooses so long as the cost of the delivery is borne by the broadcaster.  (Memorandum Opinion and Order).
  • Tied to the announcement that the Local Radio Freedom Act in now being cosponsored by a majority of the members of the U.S. House of Representatives, we published to the Broadcast Law Blog a look at what is ahead in the music licensing debate over the possibility of imposing a sound recording performance royalty on over-the-air broadcasting. (Broadcast Law Blog)

Next week or the week after, we will be looking for the FCC to release its Order setting the Annual Regulatory Fees that broadcasters will have to pay to the FCC before October 1.  The NAB and other broadcast organizations have been arguing that fees to broadcasters should not be increasing, as the FCC initially proposed several months ago.  As we wrote in our summary of broadcast issues last week, FCC Chairman Pai indicated that there will be some opportunity for broadcasters whose economics have been significantly disrupted by the pandemic to defer payments – paying those fees over time.  Each week, the FCC updates its list of orders that have been written and are circulating among the Commissioners for a vote – and this week that update lists the Regulatory Fee Order as one now circulating at the Commission leading to our expectation that we will see it soon.

The NAB recently announced that a majority of Congress has signed on to the Local Radio Freedom Act, the nonbinding resolution where Congressional representatives declare their opposition to the adoption of a broadcast performance royalty.  With that announcement, it is worth taking another look at what a broadcast performance royalty is and what might happen next.  We have been covering the arguments about a broadcast performance royalty for over 13 years, but it still bears consideration as I find that there are still broadcasters who do not fully understand the issues.

As we’ve written before, the royalties that broadcasters pay to ASCAP, BMI, SESAC and even GMR are paid for the public performance of musical compositions (or “musical works,” the words and music in a song).  These royalties are paid to the composers of music (and the copyright holders in the musical compositions, usually a publishing company). The broadcast performance royalty proposes that broadcasters also pay royalties for the public performance of sound recordings.  A sound recording is the actual recording of a musical composition by a singer or band.  Sound recording royalties are paid to the performers (and the copyright holders in the performances, usually the record labels). Broadcasters do pay these royalties now to SoundExchange when they stream their programming on the Internet. But in the US, other than digital audio services (like webcasters and music services like Pandora, Sirius XM, Spotify or Apple Music), over-the-air broadcasters and other businesses (like bars, restaurants, and retail establishments) who play sound recordings are not subject to a performance royalty for the performance of those sound recordings, though such royalties are paid in many other countries in the world. Continue Reading NAB Announces that a Majority in Congress Have Signed on to the Local Radio Freedom Act – A Look at the Broadcast Performance Royalty Debate