We have written several articles (see our articles here and here) about the regulation of CBD and the risks inherent in the broadcast of advertisements for these products.  CBD is in a legal limbo, as the Farm Act of 2018 took hemp products with less than .3% THC off the list of prohibited drugs on Schedule I of the Controlled Substances Act, but the production of these products is still subject to rules that have not yet been written by the USDA.  Moreover, CBD products that are marketed as drugs or which are contained in food are regulated by the FDA and their advertising is regulated by the FTC (see our article here).  The FDA last week published a long article on its website setting out the state of its regulation of CBD, noting that it was still studying the health effects of these products, as well as issues relating to the sale and marketing of CBD.  The FDA is taking comments on CBD issues through July 16 (see the notice here extending the comment deadline which was originally July 2), and urges interested parties to file comments on the issues raised in its proceeding.

While CBD products seem to be everywhere, in the last week, perhaps influenced by last week’s FDA article, there were two articles of note in DC publications noting the legal ambiguity of CBD products (see the Washington Post article here and the Morning Consult article dealing with online advertising issues here).  These are the same issues that we have been highlighting for broadcasters over the last few months.  These products are ubiquitous, but their use may not be legal in many states, and the promotion of certain uses (particularly anything that is ingested or any use claiming specific health benefits) is clearly a concern to federal authorities.  So, when approached by potential marketers of CBD products, broadcasters need to carefully discuss with their legal advisors the specific advertisement and its ramifications and a make a decision whether the revenue from the ad is worth the risk of its airing in light of these regulatory uncertainties.  Hopefully, the FDA and other government agencies will move quickly to resolve this legal limbo in which these products now exist.

When the FCC initiated its most recent EEO audits, we mentioned that the Commission was planning a rulemaking to review the effectiveness of its EEO rules for broadcasting and multi-channel video operators. The FCC’s Notice of Proposed Rulemaking seeking to review these rules has now been released. This review was prompted by complaints raised in connection with the abolition of the FCC Form 397 Mid-Term EEO Report (see our articles here and here) that the rules were not doing enough to foster minority hiring.

The NPRM raises few specific issues. It instead asks a series of general questions asking for comments on the effectiveness of the Commission’s current EEO program, and what actions the FCC could take to make it more effective. The only specific issue identified in the NPRM as a potential problem area is the concern that the outreach for recruits to fill job openings may be done in some instances after the jobs that are being advertising have already been filled. The NPRM asks whether that is in fact happening and what can be done to prevent such practices. Otherwise, the request is a general one looking for suggestions on how to make the EEO recruitment process more effective. Comments will be due 30 days after the NPRM is published in the Federal Register, with reply comments due 45 days after that publication.

July is an important month for regulatory filings – even though it is one of those months with no FCC submissions tied to any license renewal dates. Instead, quarterly obligations arise this month, the most important of which will have an impact in the ongoing license renewal cycle that began in June (see last month’s update on regulatory dates, here).  Even though there are no renewal filing deadlines this month, radio stations in Maryland, Virginia, West Virginia and DC must continue their on-air post-filing announcements on the 1st and 16th of the month.  On these same days, pre-filing announcements must be run by radio stations in North and South Carolina, who file their renewals by August 1.  Stations in Florida and Puerto Rico, who file on October 1, should be prepared to start their pre-filing announcements on August 1.  See our article here on pre-filing announcements.

Perhaps the most important date this month is July 10, when all full power AM, FM, Class A TV and full power TV stations must place their quarterly issues/programs lists in their online public inspection files.  The issues/programs list should include details of important issues affecting a station’s community, and the station’s programming aired during April, May, and June that addressed those issues.  The list should include the time, date, duration and title of each program, along with a brief description of each program and how that program relates to a relevant community issue.  We have written many times about the importance of these lists and the fact that the FCC will likely be reviewing online public files for their existence and completeness during the license renewal cycle – and imposing fines on stations that do not have a complete set of these lists for the entire license renewal period (see, for instance, our articles here, here and here).  So be sure to get these important documents – the only official documents that the FCC requires to show how a station has met its overall obligation to serve the public interest – into your online public file by July 10.  Continue Reading July Regulatory Dates for Broadcasters – Quarterly Issues Programs and Children’s Television Reports, Renewal Announcements, Copyright Filings, EAS, EEO and More

In anticipation of its July 10 open meeting, the FCC last week released its draft Order making changes to its rules requiring television stations to broadcast specific amounts of educational and informational programming directed to children.  The current rules require that stations air an average of three hours of such programming every week for every channel of programming they broadcast.  The current rules also impose all sorts of restrictions on programming for it to be considered “Core Programming” that can be counted toward meeting the three-hour per channel obligation.  The draft Order, if adopted at the July meeting, would ease some of the restrictions and, perhaps most importantly, eliminate the requirement that, for each multicast channel, three hours of unique educational programming directed to children be broadcast.

The Commission surveyed the current TV marketplace and found that, in the 15 years since it adopted the requirement that there be 3 hours of programming per multicast channel, much more educational and informational programming for children has become available – through public broadcasting and through new programming sources, including those delivered online.  Providing those three extra hours of educational and informational programming imposed significant cost burdens on broadcasters (even a weather radar channel carried with it a three-hour children’s programming obligation) for seemingly little benefit given the availability of so much other kids’ programming elsewhere.  The FCC draft Order also would change some of the specific requirements for station’s primary video channel. Continue Reading FCC Releases Draft Order on Changes to Children’s Television Rules – Action Expected July 10

The FCC yesterday released another of its regular EEO audit notices (available here), asking that approximately 80 radio stations, and the employment units with which they are associated, provide to the FCC (by posting the information in their online public inspection file) their last two year’s EEO Annual Public File reports, as well as backing data to show that the station in fact did everything that was required under the FCC rules. Audited stations must provide copies of notices sent to employment outreach sources about each full-time vacancy at the stations as well as documentation of the supplemental efforts that all station employment units with 5 or more full-time employees are required to perform (whether or not they had job openings in any year). These non-vacancy specific outreach efforts are designed to educate the community about broadcast employment positions and to train employees for more senior roles in broadcasting. Stations must also provide, in response to the audit, information about how they self-assessed the performance of their EEO program. Stations that are listed in the audit notice have until July 29, 2019 to upload this information into their online public file.

The FCC has promised to randomly audit 5% of all broadcast stations each year. As the response (and the audit letter itself) must be uploaded to the public file, it can be reviewed not only by the FCC, but also by anyone else with an internet connection anywhere, at any time.  The license renewal cycle which just began adds to the importance of this audit, as a broadcaster does not want a recent compliance issue to headline the record the FCC will be reviewing with its license renewal (see our article here about the upcoming license renewal cycle). So this is a good time for broadcasters to review what is required by the FCC’s EEO rules. Continue Reading Another EEO Audit Released – Looking at the FCC’s Current EEO Obligations

2020 will no doubt be a very active year for political advertising. To help broadcasters sort out the confusing rules they need to follow in connection with such advertising, we have updated our Political Broadcasting Guide for Broadcasters (note that the URL for the updated version has not changed from prior versions, so your bookmarks should continue to work). The revised guide is much the same as the one that we published two years ago, formatted as Questions and Answers to cover many of the issues that come up for broadcasters in a political season. This guide is only that – a guide to the issues and not a definitive answer to any of the very fact-dependent legal issues that arise in election season. But we hope that this guide at least provides a starting point for the analysis of issues, so that station employees have a background to discuss these matters with ad buyers and their own attorneys.

In looking at the Guide that we prepared two years ago, really not much has changed. The online public inspection file has now become a reality for all broadcasters, so that adds a new layer of transparency (and scrutiny) to broadcasters’ political advertising decisions. There also has been some discussion of the disclosures necessary for issue advertising – though because this guidance is still somewhat up in the air (see our posts here and here), our Guide highlights the questions and our understanding of where the FCC appears to be heading on this topic. We have also made some clarifications and updates on other issues based on issues we have seen arise in the last year.

Again, this Guide is just a starting place for analyzing political broadcasting issues, but we hope that many broadcasters find it to be helpful in giving them some of the tools that are needed to analyze the complex questions that come up during this election year. But resolving these issues is very dependent on the facts of any particular situation, so stay in close touch with your attorneys and advisers experienced in these issues to make sure that you get the law right. In the upcoming months, I will be doing a number of seminars on these rules for various broadcast associations – watch for announcements on those in the coming months. Last week, I spoke at the Iowa Broadcasters Association annual convention, where broadcasters are already gearing up for their Presidential caucuses early in 2020. With the Democratic debates starting this week, it looks like we are about to enter this crazy season. We trust that our Guide will assist broadcasters in spotting issues in this very active political year.

The Office of Management and Budget, acting pursuant to the Paperwork Reduction Act, has just approved the FCC’s broadcast incubator program, about which we wrote here.   That approval makes the program effective.  The program permits an established broadcaster to provide assistance to a new broadcaster (generally, a qualified small business) to enter the radio broadcast industry.  If, over a 3-year period, the assistance provided by the existing broadcaster (usually either financial assistance or management training) is deemed a success, the established broadcaster can receive a credit allowing it to purchase a station in excess of the radio ownership limits allowed for broadcasters in a market of similar size to the one in which the incubation occurred.  It is interesting that this rule became effective just as the US Court of Appeals heard oral argument on the question of whether that program does enough to encourage new entrants into broadcast ownership to meet court-imposed obligations to address these issues.

The oral argument is on the appeal of the FCC’s 2017 ownership decision which, among other things, did away with the prohibition on newspaper-broadcast cross-ownership and the rule that required that there be 8 independently owned TV stations in a market before one owner could own two stations in that market.  The appeal, as we wrote here, essentially argues that the FCC has not done enough to promote minorities and other new entrants to get into broadcast ownership.  Reports are that the judges asked the FCC many questions at yesterday’s argument as to whether the FCC had enough data to conclude that the changes that were made in 2017 were in the public interest and would not unduly burden new entrants who want to get into media ownership. Continue Reading FCC Incubator Order Becomes Effective Just as Third Circuit Hears Arguments on 2017 Order Relaxing FCC Broadcast Ownership Rules

The FCC yesterday issued a News Release about an unusual action taken by the US Attorney’s Office in Massachusetts entering into a consent decree with a pirate radio operator, where the operator agreed to surrender all of its operating equipment to the FCC, and to stop broadcasting illegally.  If the operator is again caught operating a broadcast station without authority, the US Attorney can collect a $75,000 fine.  From time to time, the FCC has cooperated with the US Marshall’s Office to seize pirate radio equipment (see, for instance, our article here), but taking a pirate to court to enforce an FCC decision is a more unusual action.

This shows what the FCC and the Department of Justice can already do to stop illegal pirate radio operators.  The FCC itself routinely issues Notices of Violation to pirate radio operators – telling them to cease operations and holding them liable for FCC fines (see for instance, notices here, here, here and here issued in the last two weeks).  However, the FCC can’t itself force the pirate to pay, and has to get the Department of Justice involved to force a collection.  As with this pirate in Massachusetts, who was previously issued a notice of violation by the FCC, sometimes pirates just ignore the FCC’s actions.  This pirate shut down one station and only partially paid the fine, and then started another pirate radio station.  But, from this news release, it appears that getting a notice from the US Attorney that you are being hauled into court for not adhering to an FCC order apparently has a greater deterrent effect – leading to this settlement.  Of course, if Congress passes the PIRATE ACT, about which we wrote here, the much bigger fines that could be imposed under that act could give the FCC an even more significant weapon to combat pirates in the future.  Watch developments in this area in coming months.

You may remember a few years ago, the FCC cracked down on “serial modifications” of FM translators to move them from rural to more urban areas (see, for instance, the cases about which we wrote here and here), considering such moves an abuse of process.  In a decision released earlier this week, it looks like the FCC’s Audio Division may be backing away from that policy.  In that decision, the FCC approved an application for a move of a translator into Chicago as the 4th hop from the translator’s original site in rural Illinois.

In the old decisions, the FCC had looked at instances where operators tried to move translators to big markets through multiple minor change applications – accomplishing through these “hops” what they normally could not do except during a major change window for translator applications – something that has not happened for since 2003.  These old decisions deemed it an abuse of process to accomplish through multiple steps what an applicant could not do through a single application, especially when the applicant evidenced no intent to serve the public at any of these interim locations.  In these cases, the applicant had often constructed on a temporary basis at a hop location, only to take the translator off the air after just a few days of operation (often dismantling the tower too).  The decision this week looked at a slightly different situation and found that the multiple hops into Chicago were permissible – and set out criteria for determining whether such hops were permissible or not. Continue Reading Maybe Serial Moves of FM Translators to Relocate Them From Rural to Urban Areas are Not So Bad….

The Department of Justice’s Antitrust Division yesterday announced that it was starting a review of the ASCAP and BMI antitrust consent decrees that govern the United States’ two largest performing rights organizations for musical compositions (referred to as the “musical work”). The DOJ’s announcement of the initiation of the examination of the consent decrees poses a series of questions to which it invites interested parties – including users, songwriters, publishers and other interested parties – to file comments on the decrees, detailing which provisions are good and bad and, more broadly, whether there is a continuing need for the decrees at all. Comments are due on July 10.

This re-examination of the decrees has been rumored for many months. Back in March, we wrote about those rumors and the role that Congress may play in adopting replacement rules should the DOJ decide to fundamentally change the current provisions of the consent decrees. The DOJ itself just recently looked at the consent decrees, starting a review only 5 years ago with questions very similar to those it posed yesterday (see our post here on the initiation of the last review 5 years ago). That review ended with the DOJ deciding that only one issue needed attention, whether the decrees permitted “fractional licensing” of a song. We wrote about that complex issue here. That issue deals with whether, when a PRO gives a user a license to play a song, that user can perform the song without permission from other PROs when the song was co-written by songwriters who are members of different PROs. The DOJ suggested that permission from one PRO gave the user rights to the entire song, an interpretation of the decrees that was ultimately rejected by the rate courts reviewing the decrees (see our article here).   So, effectively, the multi-year review of the consent decrees that was just concluded led nowhere. But apparently the DOJ feels that it is time to do it all again. To fully understand the questions being asked, let’s look at what the consent decrees are, and why they are in place. Continue Reading DOJ Starts Review of BMI and ASCAP Consent Decrees – Exploring the Background of the Issues