An interview with FCC Chairman Julius Genachowski has just been released by Broadcasting and Cable magazine. In that interview, the Chairman confirms press reports (which we cited here) that there is a planned FCC Notice of Inquiry to look into the news media in the digital world – the first public confirmation of this
With much of the media world celebrating the life of Walter Cronkite this weekend, we have to wonder what he would have thought about press reports that the FCC is considering the commencement of a proceeding to investigate the status of broadcast journalism – assessing its quality, determining whether the Internet and other new sources are making up for any quality that is lost, and potentially deciding to mandate specific amounts of news coverage by broadcast stations. That surprising story about a planned FCC Notice of Inquiry on the state of broadcast journalism was reported in an an online report picked up by the broadcast trade press last week. And even if that story is not true, concerns about the government’s intrusion into a broadcaster’s coverage of controversial issues arise from the recent Congressional committee action voting down a bill that would ban the FCC from reinstating the Fairness Doctrine. In what should have been a symbolic embrace of the First Amendment (symbolic as, in the last 6 weeks, four of the FCC Commissioners or Commissioners-to-be disavowed any interest in bringing back the Fairness Doctrine in their confirmation hearings ), the defeat of the bill raises questions as to whether someone has an agenda to resurrect the government’s role in assessing broadcast media coverage of controversial issues. In reading one of the many stories of the life of Cronkite (here, at page 3), we were stuck with the contrast between these actions, and the actions of Mr. Cronkite to address controversial issues – regardless of the FCC implications. One anecdote related his questioning of John Kennedy about his religion when Kennedy thought that topic off limits, even in light of the potential president’s veiled threat that, when he took office, he would be appointing the FCC who would be regulating CBS. Do we really want the FCC to have that power to assess what journalism is good, or what opinions each station must air to ensure "fairness"?
In reviewing the many FCC Fairness Doctrine claims that CBS faced in the Cronkite era, we are struck with the amount of time and money that must have been spent in defending its coverage against critics from both the right and the left. We also found one particularly relevant quote from Mr. Cronkite himself:
That brings me to what I consider the greatest threat to freedom of information: the Government licensing of broadcasting. Broadcast news today is not free. Because it is operated by an industry that is beholden to the Government for its right to exist, its freedom has been curtailed by fiat, by assumption, and by intimidation and harassment.
In the last 20 years, since Mr. Cronkite’s retirement as the CBS anchor, the FCC has steadily moved away from the role that he feared. Yet with these recent actions, one wonders if there are some in government now trying to prove Mr. Cronkite’s concerns correct.
In three cases released last week, the FCC made clear that its EEO rules, requiring wide dissemination of information about job opportunities at broadcast stations (and cable systems), are not satisfied by solely posting of information about openings on websites. Instead, the Commission required that additional outreach efforts be undertaken in order to assure that the notice of the job opening reaches all groups within a community. The decisions pointed to the FCC’s 2003 Report and Order adopting the current rules which stated that the FCC did not feel that the Internet was sufficiently ubiquitous that they could feel comfortable with on-line postings being sufficient to reach all groups within a community. In the recent decisions, the FCC staff said that they were not ready to change the determination of the 2003 Commission.
What does this mean on a practical level? The decisions hold that simply using internal station sources plus on-line postings (in one case website postings plus some combination of walk-ins, industry referrals, and internal postings; in another case the use of the station’s website, plus employee referrals) were insufficient to assure wide dissemination. To avoid getting caught in this trap, broadcasters must use some other traditional outreach services (e.g. employment agencies, community groups, educational institutions, and the local newspapers) to assure that they meet the Commission’s wide dissemination requirements.
The MusicFirst coalition last week asked that the FCC investigate broadcast stations that allegedly cut back on playing the music of artists who back a broadcast performance royalty, and also those stations who have run spots on the air opposing the performance royalty without giving the supporters of the royalty an opportunity to respond. While the NAB and many other observers have suggested that the filing is simply wrong on its facts, pointing for instance to the current chart-topping position of the Black Eyed Peas whose lead singer has been a vocal supporter of the royalty, it seems to me that there is an even more fundamental issue at stake here – the First Amendment rights of broadcasters. What the petition is really saying is that the government should impose a requirement on broadcasters that they not speak out on an issue of fundamental importance to their industry. The petition seems to argue that the rights of performers (and record labels) to seek money from broadcasters is of such importance that the First Amendment rights of broadcasters to speak out against that royalty should be abridged.
While the MusicFirst petition claims that it neither seeks to abridge the First Amendment rights of broadcasters nor to bring back the Fairness Doctrine, it is hard credit that claim. After all, the petition goes directly to the heart of the broadcasters ability to speak out on the topic, and seems to want to mandate that broadcasters present the opposing side of the issue, the very purpose of the Fairness Doctrine. As we’ve written, the Fairness Doctrine was abolished as an unconstitutional abridgment on the broadcaster’s First Amendment rights 20 years ago. As an outgrowth of this decision, FCC and Court decisions concluded that broadcasters have the right to editorialize on controversial issues, free of any obligation to present opposing viewpoints. What is it that makes this case different?
This past week, I attended the BIAfn Winning Media Strategies Conference in Washington, DC. During the course of the conference, there was much talk about how broadcasters and publishers need to provide unique service to their communities in order to survive in the competitive media marketplace. The point was made over and over again that, in each market there are unique attributes and personalities that a station should be covering in its programming, and should be exploiting even more broadly through their digital assets, to tie it to its community. Only by doing so will the station be able to survive in the new media environment – and by doing so, the station may be able to thrive. In fact, I was stuck by a statement by USC’s Adam Clayton Powell III that domination of the local online and digital media marketplace was "the broadcasters to lose." In other words, the broadcaster has such unque promotional abilities with its current audience that it can establish its brand in the online and in the mobile world far easier than other media players. But there were also the repeated warning that there is more and more competition for this local digital market from new entrants and other media entities and that, if the broadcasters did not take advantage of their current advantage, the local service would come from someone else. What most stuck me was that there was no question that the superservice to local needs would be coming from someone – broadcaster or not – as a result of marketplace developments, not because of any government mandate. The broadcaster has to adapt to and compete in this new media marketplace or become culturally and economically irrelevant. The broadcaster needs to serve the local market to meet these challenges, not because some Washington agency has ordered him to do so. And the broadcaster needs to serve his community in a way that the public will find compelling, not in a way that the government thinks is best.
At BIAfn, the presentation that made the greatest impact was probably that of Greenspun Media from Las Vegas, which has reinvented a secondary newspaper and a Low Power TV station as an on-line powerhouse, uncovering the aspects of the community that would draw the largest audience and covering that information in great detail. The Las Vegas Sun site not only covers hard news, but also the gaming industry, University of Las Vegas sports and even state government issues in a way that its audience seems to find interesting. Even a history of Las Vegas, in great detail, is included. And video plays a big part of the site, with the company in development of a hip news and events program, 702.tv, that will soon be a daily program on the television station and online (featuring local "celebrities" doing the weather, including strippers and Neil Diamond sound-alikes). While some attendees at the conference thought that Las Vegas presented unique opportunities that might not be available in all communities, many were immediately speculating on the opportunities in their own communities to find unique personalities and events that could be developed on-air and on-line in ways to maximize their connection with their audience.
In a speech to the Free Press Summit, Acting FCC Chairman Michael Copps suggested that broadcast license renewals should no longer be a "postcard", but instead should be a real test of the broadcaster’s service to the public interest – and should happen every three years, rather than on the eight year renewal cycle that is currently provided for by the law. While the Chairman acknowledged that many suggest that the old media are in troubled times and may well be supplanted by new forms of communications, "If old media is going to be with us a while still…we still need to get serious about defining broadcasters’ public interest obligations and reinvigorating our license renewal process." In other words, while broadcasters may be dying, we should regulate them while we can.
First, it should be pointed out that the broadcast license renewal is no longer a postcard, and really hasn’t been for almost 20 years. The current renewal forms require certifications on many matters demonstrating a broadcaster’s service to the public and its compliance with the rules, and additional documentation on EEO performance and other matters. TV broadcasters also have substantial renewal submissions on their compliance with their obligations under the Children’s television rules. Issues of noncompliance with the rules resulted in many fines in the last renewal cycle, demonstrating that this is not a process where the FCC is without teeth. Yet most of these fines were for paperwork violations (e.g. not keeping detailed records of EEO outreach or quarterly issues programs lists demonstrating the public interest programming broadcast by a station), not for any substantive claims that station licensees were fundamentally unqualified and should forfeit their licenses. In fact, the Acting Chairman’s speech recognizes that most broadcasters do a fine job serving their communities, yet he believes that more regulation is necessary to police those that don’t. But is this the time to be imposing additional regulatory burdens on all of the industry, for the actions of a few. Will the overall public interest be served by such actions? .
We reported on the settlement under the Webcaster Settlement Act between the NAB and SoundExchange on Internet Radio Royalties. As provided in the Webcaster Settlement Act, that settlement has now been published in the Federal Register, and thus it is available for broadcasters who are streaming their signal on the Internet, or who are streaming other programming on the Internet, to claim coverage under that settlement. To do so, broadcasters who are already streaming must file a notice of Intent to Rely on this settlement, available here, with SoundExchange, by April 2, 2009 – thirty days after the Federal Register publication occurred. Broadcasters who are not now streaming, but who start in the future, must file the election notice within 30 days of the start of their streaming, or they will be bound by the rates established by the Copyright Royalty Board in their 2007 decision (see our post here). The publication sets out several other details of the settlement, set forth below.
The rates: The rates, which represent some savings under the CRB rate for the years between 2007 and 2011, are set forth below. These rates are "per performance", meaning that the rate is paid on a per song, per listener basis. If you play 10 songs in an hour, and each song is heard by 10 people, you have 100 performances. There are companies that provide services to track and report on performances. See our post, here, for details. There are also limited exceptions to the full "per performance" reporting, summarized below. The rates under this agreement are as follows:
2006 ……………………………….. $0.0008
2007 ……………………………….. 0.0011
2008 ……………………………….. 0.0014
2009 ……………………………….. 0.0015
2010 ……………………………….. 0.0016
2011 ……………………………….. 0.0017
2012 ……………………………….. 0.0020
2013 ……………………………….. 0.0022
2014 ……………………………….. 0.0023
2015 ……………………………….. 0.0025
While it seems like we just finished the election season, it seems like there is always an election somewhere. We are still getting calls about municipal and other state and local elections that are underway. And broadcasters need to remember that these elections, like the Federal elections that we’ve just been through, are subject to the FCC’s equal time (or "equal opportunities") rule. The requirement that lowest unit rates be applied in the 45 days before a primary and 60 days before a general election also apply to these elections. "Reasonable access," however, does not apply to state and local candidates – meaning that stations can refuse to take advertising for state and local elections (unlike for Federal elections where candidates must be given the right to buy spots in all classes and dayparts on a station), as long as all candidates for the same office are treated in the same way. So stations can take ads for State Senate candidates, and refuse to take ads for city council, or restrict those ads to overnight hours, as long as all candidates who are running against each other are treated in the same way.
One issue that arises surprisingly often is the issue of the station employee who runs for local office. An employee who appears on the air, and who decides to become a candidate for public office, will give rise to a station obligation to give equal opportunities to other candidates for that same office – free time equal to the amount of time that the employee’s recognizable voice or likeness appeared on the air. While a station can take the employee off the air to avoid obligations for equal opportunities, there are other options for a station. See our post here on some of those options.
In these challenging economic times, it seems like almost every day we see a notice that a broadcast station has gone silent while the owner evaluates what to do with the facility. This seems particularly common among AM stations – many of which have significant operating costs and, in recent times, often minimal revenues. The DTV transition deadline (whenever that may be) may also result in a number of TV stations that don’t finish their DTV buildout in time being forced to go dark. While these times may call for these economic measures to cut costs to preserve the operations of other stations that are bringing in revenue, broadcasters must remember that there are specific steps that must be taken at the FCC to avoid fines or other problems down the road.
One of the first issues to be addressed is the requirement that the FCC be informed of the fact that a station has gone silent. Once a station has ceased operations for 10 days, a notice must be filed with the the FCC providing notification that the station is not operational. If the station remains silent for 30 days, specific permission, in the form of a request for Special Temporary Authority to remain silent, must be sought from the FCC. The rules refer to reasons beyond the control of the licensee as providing justification for the station being off the air. Traditionally, the FCC has wanted a licensee to demonstrate that there has been a technical issue that has kept the station off the air. The Commission was reluctant to accept financial concerns as providing justification for the station being silent – especially if there was no clear plan to sell the station or to promptly return it to the air. Perhaps the current economic climate may cause the FCC to be more understanding – at least for some period of time.
Recently, it seems like you can’t read a broadcast industry newsletter without seeing an article about employment reductions or layoffs at some station – sometimes the whole newsletter seems to be dominated by such reports. In this climate, broadcasters need to consider the employment law issues that can arise in such situations. The Davis Wright …