FCC

Subscribe to FCC via RSS

At last Thursday’s Public Hearing on multiple ownership in Chicago, about which we wrote here, a statement was read by a spokesman for Presidential candidate Barack Obama.  According to press reports, the statement expressed the candidate’s positions favoring shorter license renewal terms for broadcasters so that they would be subject to more public scrutiny, as well as criticizing the FCC for allowing broadcast consolidation.  These thoughts essentially echo the comments of FCC Commissioner Copps, especially on the subject of license renewal terms, whose views we wrote about here.  While many press reports have asked if this statement by Senator Obama foreshadows the broadcast ownership debate becoming part of the presidential campaign issues, we worry that it may signal a far broader attack on broadcasters during the upcoming political year.  The statement by Senator Obama is but one of a host of indications that broadcasters may face a rash of legislative issues that are now on the political drawing boards.

Broadcasters make easy targets for politicians as everyone is an expert on radio and television – after all, virtually everyone watches TV or listens to the radio and thus fancies themselves knowledgeable of what is good and bad for the public.  But those in Congress (and on the FCC) have the ability to do something about it.  And, with an election year upon us, they have the added incentive to act, given that any action is bound to generate at least some publicity and, for some, this may be their last opportunity to enact legislation that they feel important.  We’ve already written about the renewed emphasis, just last week, on passing legislation to overturn the Second Circuit’s decision throwing out the FCC’s fines on "fleeting expletives" and making the unanticipated use of one of those "dirty words" subject again to FCC indecency fines.  Clearly, no Congressman wants to be seen as being in favor of indecency (look at the rise in the indecency fines to $325,000 per occurrence which was voted through Congress just before the last election), and First Amendment issues are much more nuanced and difficult to explain to the voter, so watch this legislation.Continue Reading One Sign That Broadcasters Are About to Become Political Footballs – Obama Suggests Shorter Broadcast License Terms and Less Consolidation

Over a year ago, the FCC released its Notice of Proposed Rulemaking on amendments to the FCC’s multiple ownership rules.  Issues from newspaper-broadcast cross-ownership, to local TV and radio ownership limits are all being considered.  Our summary of the issues raised in the NPRM is available here.  The FCC has been holding field hearings throughout the country on its proposals, gathering public comment on the proposals – the most recent having been held in Chicago last night.  Only one more field hearing to go and the Commission will have conducted the six hearings that it promised.  Many, including me, had felt that the timing was such that no decision in this proceeding could be reached until 2008 and, as that is an election year, the decision could quite well be put off until after the election to avoid making it a political issue.  However, there are now signs that some at the FCC are gearing up to try to reach a decision late this year or early next – presumably far enough away from the election for any controversy to quiet before the election.  With this push, others are expressing concern about a rush to judgment on the issues, and may well seek to delay it further.

Evidence of the FCC’s increasing attention to the multiple ownership issues include the recent Further Notice of Proposed Rulemaking, asking questions about minority ownership and making proposals on how that ownership can be encouraged (proposals we summarized here).  The FCC has also asked for comment on several studies that it commissioned to look at the effects of ownership consolidation in the broadcast media (the public notice asking for comments is here, and the studies can be found here).  Comments on the Further Notice and the ownership studies are due on October 1, with replies due on October 15.  Some have suggested that this time table is unnecessarily accelerated, especially as certain peer review documents on the ownership studies were just recently released.Continue Reading A New Push to Address Multiple Ownership?

This week, legislation was introduced in the House of Representatives to make a single use of an expletive on a broadcast station subject to sanctions from the FCC.  This parallels legislation that was introduced in the Senate this summer, about which we wrote, here.  The point of this legislation is to overturn the decision of the US Court of Appeals for the Second Circuit which held that the FCC could not levy indecency fines on stations for airing a single isolated "fleeting expletive". As we wrote when the Senate Bill was introduced, the Second Circuit decision overturning the FCC’s fines was technically based, not on constitutional issues, but instead on the fact that the FCC had not rationally defended the distinctions that it made as to when to impose fines for the use of an expletive, and when to allow the use of the expletives without sanction (as in the airing of Saving Private Ryan).  The Court also faulted the Commission for not providing guidelines as to what was indecent and what was that were clear enough to alert a broadcaster as to what was permitted and what was not.  When a decision is based on an administrative failure to rationally justify its decision, Congress can pass a law providing that justification.  Here, that would give the FCC permission to fine a broadcaster for the use of a single expletive.  If the decision was constitutionally based, finding that the regulation of the use of fleeting expletives was unconstitutional, then the ability of Congress to pass a law permitting FCC action that the Court found was unconstitutional is severely limited.

However, while not basing the decision on constitutional grounds, the Second Circuit decision did go out of its way to question the constitutionality of the FCC’s indecency enforcement, but deciding that it did not need to decide the issue of constitutionality as it had already thrown out the FCC fines.  While the Second Circuit passed on that issue, another court may well reach the constitutional question in the near future.  On September 11, the Third Circuit, the same Court which invalidated many of the FCC’s 2003 liberalized multiple ownership rules, heard arguments on the FCC’s $550,000 fine imposed on the CBS owned-and-operated television stations for the Janet Jackson breast-baring Super Bowl incident.   CBS, represented by an attorney from our firm, argued that the FCC’s indecency rules are unconstitutional.  The Court seemed engaged in the issue, according to press reports, asking many questions.  As the briefs have been filed and the arguments made, the Court decision could come at any time.  Sometimes these decisions can be released quickly, though at other times the final decision can take many months to be written.  Broadcasters will have to wait for this further clarification.Continue Reading Congress Tries to Overturn Second Circuit While Third Circuit Hears Janet Jackson Indecency Case, and “The War” Is Censored

The FCC today issued three orders imposing fines on broadcasters – cutting no slack to anyone.  These cases demonstrate how important strict compliance with all FCC rules is to avoid fines before the current Commission.  The first decision imposed a fine of $2800 on a broadcaster for having an unfenced tower – where the broadcaster claimed that the fence was temporarily removed to facilitate the clearing of brush as required by local authorities to remove a potential fire hazard.  While the FCC seemed to recognize that the fence removal was temporary, and that it was missing for only a few weeks while weed killer was being applied at the site, the Commission still imposed the fine – requiring that access to an AM tower always be restricted, prohibiting open access even for a short period.

The second case was a decision which imposed a fine of $2000 on a broadcaster for operating from an unauthorized transmitter site.  While the broadcaster had received Special Temporary Authority (an "STA")  to operate from the site, the STA expired.  The broadcaster filed an extension request, but forgot to include the filing fee check.  The broadcaster claims that he re-filed the request, and had a canceled check to prove it, although the Commission had no record of the re-filed STA (though the FCC did acknowledge having received the check).  Finding that it had no record of the re-filed STA, and further finding that the applicant should have inquired about the failure to receive an STA extension after 180 days (the length of an STA), the Commission imposed the fine on the broadcaster.  While this case is certainly complicated by the missing extension request, given the canceled check one would assume that broadcaster must have filed something, and the FCC’s usual rule is that if an STA extension is on file, the station can continue to operate.  Of course, with an extension that was pending for 2 years, probably some inquiry was warranted.  But whether it was a $2000 mistake is a different question.Continue Reading FCC Cuts No Slack on Fines – Temporarily Unfenced Tower, Expired STA, Former Owner – All Draw Fines

As we’re approaching the anniversary of September 11, it may be appropriate that the FCC issued an order on Friday upholding a fine imposed on a radio station that did not have an operating EAS system.  The station, while it had a system in place that was capable of transmitting the required EAS tones, had not received any EAS alerts for about a year, and had not entered any reasons for that failure in its station log at any time during the period.  The FCC initially issued an $8000 fine, but reduced the fine to $6400 based on a showing that the station did not have any history of past violations.  However, even though the station was operating at reduced power for a significant period of time due to towers damaged by a storm, the FCC refused to reduce the fine further based on financial hardship as the fine did not exceed 2% of the station’s average gross revenue during the previous three years.

The FCC will reduce fines for a variety of reasons – the most common being the past good record of the station.  In most cases, as here, a showing that the station has not previously been fined will be sufficient to demonstrate the past compliance of the station and justify some reduction in the amount of the fine.  Stations also often plead that they cannot afford to pay a fine.  The 2% of gross revenue standard announced by the Commission in this case seems to set the threshold at which the Commission will consider that plea.  To prove that a reduction of a fine is in order, according to this case, a station needs to submit financial statements showing the past three years performance, and demonstrating that the proposed fine will exceed 2% of the station’s average gross revenues. Continue Reading Fine For EAS Violation – Financial Hardship Not Enough to Merit a Reduction

On Friday, the FCC showed released two decisions – both dealing with a handful of inadvertent violations of the Commission’s rules on advertising directed to children. In one case, a licensee admitted in its license renewal application 4 violations of the rules and was fined $8,000. In another, the licensee admitted 8 violations, received no fine at all, instead being only admonished for its errors. Why the difference?

The FCC justified the difference in treatment based on the nature of the violations.  In reality, the station that did not receive any fine actually broadcast more commercial material in excess of the limits on the amount of advertising permitted in children’s program than did the station that was fined. The reason – “program length commercials.” These are instances where, in a commercial message, a character from the surrounding program appears. In that situation, the FCC considers the entire program as a commercial, and thus the violation is considered much more serious than a mere overage in the time limits on commercial material in children’s programs. The station that received the fine had 3 program length commercials, while the station that was not fined simply ran more commercial matter than permitted by the rules – and did not have any program length commercials. But are these distinctions really justified?Continue Reading Plan Your Inadvertent Errors Carefully – A Fine for Children’s Television Violations May be at Stake

In its Public Notice setting out the rules governing the upcoming filing window for applicants seeking new noncommercial FM stations or major changes in existing stations, which we wrote about here, the FCC has put applicants on notice of the many requirements that must be met in order to have an application considered in the upcoming process.  This is the first opportunity in this century for the filing of applications for new noncommercial FM stations. In order to participate, all applicants must make sure that they follow the rules set out by the Commission.  Applications will be due in a filing window that will open on October 12 and close on October 19.

Fundamentally, the FCC’s Public Notice reminds interested parties that, to be eligible, an applicant must be a noncommercial entity – a nonprofit corporation or a governmental organization.  Individual applicants or profit-making entities cannot participate.  As eligibility to participate and the comparative qualifications of all applicants are assessed at the time of filing, applicants need to assure their nonprofit status is in order before the upcoming filing window.

The Commission also sets out a number of other requirement for the applications that may be filed during the window. Applications submitted during the window will be filed electronically on FCC Form 340, and must contain very specific technical descriptions of the service they plan. The proposal must specify facilities that don’t interfere with other existing stations or pending “cut-off” noncommercial applications. The applicant must have received reasonable assurance of the availability of its proposed transmitter site (i.e. a legally binding contract is not necessary, but a commitment from the site owner that the site will be available and an idea of the terms on which that availability is premised must be obtained). Continue Reading Details on the Noncommercial Filing Window

The FCC last week approved two television "Shared Services Agreements," here and here, each between the proposed Buyer of a television station and a company that owns another television station in the same market.  In each case, the existing owner would sell advertising time for the station being purchased, as well as provide a loan guaranty for the funds necessary for the purchase of the station.  And the station already in the market would receive from the purchaser of the new station an option to purchase the station in the future, if that purchase is permitted under some future set of multiple ownership rules.  It is interesting that these decisions were released in the same week as the FCC issued two requests for public comment on the multiple ownership rules (see our post here).

These decisions probably mark the outside limit of what two stations can do in a television market where they cannot be co-owned without triggering multiple ownership concerns.  In the radio world, such agreements would not be possible to the same extent.  A radio licensee who provides sales services for another station in the same market, where more than 15% of the advertising time on the station is sold pursuant to such an agreement, would result in an "attributable interest," meaning that such services could only be provided to a station that could be owned under the multiple ownership rules. 

Continue Reading An Option, A Guaranty, and a Shared Services Agreement – OK By the FCC

Last month, we wrote about the US Court of Appeals throwing out the FCC’s decision to issue fines to broadcasters for the use of an occasional “fleeting expletive,” i.e. one of those impolite words that once in a while will slip onto a broadcast station’s airwaves, most usually in a live and unscripted program. The Court looked at the FCC’s decisions in this area and determined that they were inconsistent and did not provide the guidance that a broadcaster needs to determine what is and what is not permitted on the airwaves. Thus, the fines were thrown out as the Court found the FCC’s decisions to be arbitrary and capricious.  In an attempt to reinstate the FCC’s authority to regulate in this area, Senator Sam Brownback of Kansas, the author of the legislation which raised potential broadcast fines to $325,000 per violation of the indecency policy, last month suggested that he would introduce legislation that would overturn the Court action.  That proposal was preempted by Senate Commerce Committee, which earlier this month approved a bill introduced by Senator Rockefeller which would, very simply, state that the FCC had the jurisdiction to fine stations for a single word or phrase that they broadcast.  While the bill was approved by the Committee, the full Senate and the House of Representatives would need to approve the legislation before it could become law.

The proposal to give the authority back to the FCC to fine a station for an isolated utterance  is possible in theory, as the Court decision was based on the lack of consistency, clarity and guidance that the FCC provided to broadcasters about its standards, and not based on constitutional grounds.  However, reading the Court decision, one can see that the Court went out of its way to question the constitutional basis of the FCC regulation in this area. See our summary of the decision, here and here. A piece of Congressional legislation can reverse a Court ruling which was based on statutory interpretation, but it cannot reverse a decision that is based on a finding that a government action is unconstitutional. A constitutional amendment – which is obviously very rare –  is necessary for that.Continue Reading New Legislation Proposed to Overturn Court Decision on Indecency – Let’s Worry About the Constitution Later