February 1 is the deadline by which broadcast stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma must place into their Public Inspection files their Annual EEO Public Inspection File Report. The report must also be available on these stations’ websites, if they have such sites. The Annual EEO Public Inspection File Report
The nuts and bolts of legal issues for broadcasters were highlighted in two sessions in which I participated at last week’s joint convention of the Oregon and Washington State Broadcasters Associations, held in Stephenson, Washington, on the Columbia River that divides the two states. Initially, I conducted a seminar for broadcasters providing a refresher on their…
The earthquake in Haiti has caused many to look for ways to help – including broadcasters. While many broadcasters are already pitching in to do their part to aide relief efforts, noncommercial broadcasters are, in some cases, limited in what they can do. Noncommercial stations cannot raise funds, even for other noncommercial groups, if that fundraising "substantially alters or suspends regular programming" of the station. Under these rules, NCE ("Noncommercial educational) stations are thus forbidden to hold a telethon or other pledge drive that suspends normal programming where the proceeds would go to a third party – even a nonprofit third party group. Thus, recognizing the magnitude of the tragedy in Haiti, the FCC has agreed to grant liberal waivers of these policies, issuing a public notice announcing that NCE stations wishing to conduct such efforts can simply file an electronic request, by email, with certain supervisors in the Media Bureau’s Audio and Video divisions, setting out the nature of the programming, its length, and the beneficiary.
We obviously applaud the FCC’s rapid response on this issue. But we note that it is interesting that the Public Notice states that applicants for one of these waivers also must state whether the special fund-raising effort is part of the station’s normal fundraising, or if it is a separate program. The public notice does not mention that noncommercial stations can make fundraising appeals for third parties under the current FCC policies, as long as those appeals do not suspend or interfere with normal station programming. It would seem to me that such appeals would permit a DJ on an NCE station, in a normal programming break, to urge listeners to contribute to the Red Cross or some other charity, or for a regularly scheduled talk show on a station to feature a discussion of the situation in Haiti and of how people can assist with disaster relief, without needing any specific approval of the FCC. The key to whether a waiver of the FCC policies is necessary is whether there is a substantial alteration or suspension of the normal programming of the station.
On September 10, 2009, David Oxenford addressed the Christian Music Broadcasters’ Momentum ’09 Conference in Orlando, Florida. Dave’ s presentation was titled 18 Issues in 18 Minutes: What a Broadcaster Should Worry About From Washington DC. In 18 minutes, Dave discussed topics including the FCC’s proposed localism rules, sponsorship identification and noncommercial underwriting issues, contest fines, FCC technical…
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.
The full text of the FCC’s revisions to its ownership report filing process was released last week. The new rules will require that all commercial stations (including LPTV stations) file an updated Form 323 on November 1 every other year – starting in 2009. The Order does not add much to the summary that we provided when the decision was first announced, though it does make clear that the electronic form will be revised to no longer allow for PDF attachments, instead requiring that all information be provided on the electronic form itself, so that it can be more easily searched. With complex ownership structures, which are sometimes not easily explained in the confines of an FCC form, this may create some difficulties. The Order did not seem to freeze the obligations for the filing of Form 323 Ownership Reports on the old version of the form on the current schedule while the new form is being created and approved by the Office of Management and Budget under the Paperwork Reduction Act, so stations in states with June 1 deadlines for their biennial reports should continue their preparation (see our Advisory on the the reports that are due on June 1 for radio stations in Arizona, District of Columbia, Idaho, Maryland, Nevada, New Mexico, Utah, Virginia, West Virginia and Wyoming, and television stations in Michigan and Ohio).
The Order also asked for further comment on the Ownership Report requirements for noncommercial licensees, including LPFM stations. The Commission asks not only for comments on whether noncommercial operators should be required to file their reports on the same two year cycle as commercial broadcasters, but also for comments on what information should be required from these operators. As noted by the FCC, the question of who controls a noncommercial station is often not an easy one – as there are varying degrees of control and oversight of station operations at many of the institutions that hold noncommercial licenses. As noted by the FCC, there has been a Notice of Inquiry into noncommercial broadcast station ownership pending since 1989, trying to set out when there is a transfer of control of such entities that needs prior FCC approval. Noncommercial stations have been operating under the interim policy set forth in that Notice for almost 20 years. While the Commission does not seemingly ask for any change in the interim policy at this point, by gathering information about what ownership information should be reported on the new ownership report for a noncommercial entity, a resolution of that long-pending proceeding could potentially be in the works.
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? .
National Association of Broadcasters President David Rehr today announced his decision to leave the Association, leaving the NAB without a leader at a time when the Association is facing an incredible number of challenges in Washington. One can only hope that the NAB acts quickly to replace Rehr with someone prepared to aggressively address the needs of an industry hobbled by the current economic climate, and challenged by regulatory issues that could further undermine the ability of radio and television operators to compete in today’s media marketplace. The potential broadcast performance royalty, which could require that radio operators pay musicians and record labels for the rights to play their music on the air, is but one of a number of fundamental challenges that need to be addressed very shortly by broadcaster’s representatives in Washington – perhaps in the next week or two when the House of Representatives Judiciary Committee may take up the "performance tax" issue (as the NAB has called it in their arguments on Capitol Hill).
What else will a new NAB President have to contend with? In addition to the performance royalty, there seems to be a perception in many quarters that broadcasting is no longer the special medium that it once was that demands regulatory deference because of the public interest service that it provides. Because of the lessening of some of Washington’s regard for broadcasters, there are many issues now before the FCC, Congress, the courts, and other agencies in Washington – all of which could have a serious impact on broadcasters – including:
- The final days of the DTV transition
- The FCC’s implementation of their White Areas order allowing wireless users to use parts of the TV spectrum – and the appeals and other attempts to overturn or modify that decision
- The reauthorization of SHVERA, to continue to allow satellite companies to beam local television signals into local markets – where parties are raising all sorts of extraneous issues about carriage rights and retransmission consent, possible changes in TV market boundaries, and changes in the rights of satellite carriers to import distant signals.
- The FCC’s localism proceeding, which could impose new obligations on broadcasters at a time when broadcast competition has never been so intense – when the marketplace should dictate how broadcasters best serve their communities
- Potential Congressional effort to bring back the Fairness Doctrine in some form or another
- A number of FCC proceedings that could affect new methods of advertising meant to combat technological changes – like embedded advertising and product placement that are meant to partially overcome the effects of DVRs.
- Congressional attempts to regulate advertising and programing – including potential efforts to restrict prescription drug ads, ED treatments, violent programming and programming that promotes unhealthy foods
- FCC attempts to reign in technical changes in FM stations to allow them to take steps to increase power and to move into larger markets
- Congressional moves to remove restrictions on LPFM stations on channels that are third-adjacent to full power facilities – and to potentially give these new stations rights to replace existing FM translators
The week, Congressman Rick Boucher, a member of both the House of Representatives Commerce and Judiciary Committees, told an audience of broadcasters at the NAB Leadership Conference that they should accept that there will be a performance royalty for sound recordings used in their over-the-air programming and negotiate with the record companies about the amount of a such a royalty. He suggested that broadcasters negotiate a deal on over-the-air royalties, and get a discount on Internet radio royalties. Sound recordings are the recordings by a particular recording artist of a particular song. These royalties would be in addition to the payments to the composers of the music that are already made by broadcasters through the royalties collected by ASCAP, BMI and SESAC. Congressman Boucher heads the Commerce Committee subcommittee in charge of broadcast regulation, and he has been sympathetic to the concerns of Internet radio operators who have complained about the high royalty rates for the use of sound recordings. Having the Congressman acknowledge that broadcasters needed to cut a deal demonstrated how seriously this issue is really being considered on Capitol Hill.
The NAB was quick to respond, issuing a press release, highlighting Congressional opposition to the Performance royalty (or performance tax as the NAB calls it) that has been shown by support for the Local Radio Freedom Act – an anti-performance royalty resolution that currently has over 150 Congressional supporters. The press release also highlights the promotional benefits of radio airplay for musicians, citing many musicians who have thanked radio for launching and promoting their careers. The controversy was also discussed in an article on Bloomberg.com. In the article, the central issue of the whole controversy was highlighted. If adopted, how much would the royalty be? I was quoted on how the royalty could be very high for the industry (as we’ve written here, using past precedent, the royalty could exceed 20% of revenue for large music-intensive stations). An RIAA spokesman responded by saying that broadcasters were being alarmists, and the royalty would be "reasonable." But would it?