The FCC adopted rules for the digital operation of FM radio stations (known as HD Radio or the Ibiquity In Band On Channel system – IBOC for short) in 2007 and allowed the Media Bureau to amend those rules as technical developments warranted. In 2010, the Bureau authorized an increase in the power level of the digital portion of
In recent months, SESAC has been writing letters to broadcasters who are streaming their signals on the Internet, asking for royalties for the performance of SESAC music on their websites. More than one broadcaster has asked me why they have any obligation to SESAC when they are already paying SoundExchange for the music that they stream. In fact, SoundExchange and SESAC are paid for different rights, and thus the payments to SoundExchange have no impact on the obligations that are owed to SESAC. SESAC, along with ASCAP and BMI, represent the composers of music in collecting royalties for the public performance of their compositions. SoundExchange, on the other hand, represents the performers of the music (and the copyright holders in those performances – usually the record companies). In the online digital world, the SoundExchange fees cover the public performance of these recordings by particular performers (referred to as "sound recordings"). For an Internet radio company, or the online stream of a terrestrial radio station, payments must be made for both the composition and the sound recording.
To illustrate the difference between the two rights, let’s look at an example. On a CD released a few years ago, singer Madeleine Peyroux did a cover version of the Bob Dylan song "You’re Gonna Make Me Lonesome When You Go." For that song, the public performance of the composition (i.e. Dylan’s words and music) is licensed through SESAC. The actual "sound recording" of Peyroux’s version of the song would be licensed through SoundExchange, with the royalties being split between Peyroux and her record label (with backing singers and musicians receiving a small share of the SoundExchange royalty).
Last month, the FCC released a Public Notice requesting further comments on the proposal to increase the power of HD radio operations. We have written about that proceeding a number of times, including posts here and here. The increased power for the digital radio signals has been sought by many broadcasters who believe that current HD radio power levels do not produce strong enough digital signals to penetrate buildings and fully serve radio markets. On the other hand, other broadcasters fear that the increased power for the digital signals will create interference to existing analog stations operating on adjacent channels. Today, the FCC set the dates for the filing of these additional comments – comments are due on July 6, with replies due on July 17.
While comments have already been filed on the proposal to increase digital power, the FCC has raised a number of specific issues on which it wants comments, especially in light of the studies sponsored by NPR in cooperation with a number of other broadcasters, which seek to do a comprehensive review of the interference potential of higher powered digital operations. NPR is shooting to have that report to the FCC in September. The specific questions raised in the new FCC notice are:
- Whether the FCC should wait to decide on the power increase proposal until after the NPR study is done
- Whether current operations by radio stations operating in HD, and the various tests that have already been run, demonstrate the need for higher power operation on a permanent or provisional basis
- Whether new standards of interference to adjacent channel stations should be adopted, and if the interference should also protect LPFM stations
- Whether there should be specific procedures adopted to resolve any interference issues that do arise.
NPR Labs has announced that it is going to conduct a further study, financed by the Corporation for Public Broadcasting, of the potential of interference from a proposed increase in the power of HD Radio operations. Last year, NPR had raised issues with the proposal by Ibiquity and a number of commercial broadcasters for power…
As we have written, by April 2, broadcasters who are streaming need to file with SoundExchange a written election in order to take advantage of the SoundExchange-NAB settlement. For broadcasters who make the election, the settlement agreement will set Internet radio royalty rates through 2015. One aspect of this agreement that has not received much attention is the waiver from the major record labels of certain aspects of the performance complement that dictates how webcasters can use music and remain within the limits of the statutory license. When Section 114 of the Copyright Act, the section that created the performance royalty in sound recordings, was first written in the 1990s, there were limits placed on the number of songs from the same CD that could be played in a row, or within a three hour period, as well as limits on the pre-announcing of when songs were played. These limits were placed seemingly to make it more difficult for listeners to copy songs, or for Internet radio stations to become a substitute for music sales. In conjunction with the NAB-SoundExchange settlement, certain aspects of these rules were waived by the 4 major record labels and by A2IM, the association representing most of the major independent labels. These waivers which, for antitrust reasons, were entered into with each label independently, have not been published in the Federal Register or elsewhere. But I have had the opportunity to review these agreements and, as broadcasters will get the benefit of the agreements, I can provide some information about the provisions of those agreements.
First, it is important to note that each of the 5 agreements is slightly different. In particular, one has slightly more restrictive terms on a few issues. To prevent having to review each song that a station is playing to determine which label it is on, and which restrictions apply, it seems to me that a station has to live up to the most restrictive of the terms. In particular, the agreements generally provide for a waiver of the requirement that stations have in text, on their website, the name of the song, album and artist of a song that is being streamed, so that the listener can easily identify the song. While most of the labels have agreed to waive that requirement for broadcasters – one label has agreed to waive only the requirement that the album name be identified in text – thus still requiring that the song and artist name be provided. To me, no station is going to go to the trouble of providing that information for only the songs of one label – so effectively this sets the floor for identifying all songs played by the station and streamed on the Internet.
I just finished speaking on a panel at the Radio Ink Convergence ’09 conference in San Jose. My panel was called "The Distribution Dilemma: Opportunities, Partnership and Landmines." As the legal representative, my role was, of course, to talk about the landmines. And one occurred to me in the middle of the panel when a representative of Ibiquity, the HD Radio people, about one of the opportunities available for the multicast channels available in that system, where an FM radio operator can, on one FM station, send out two or three different digital signals. The particular opportunity that was discussed was the ability to bring in outside programmers to program the digital channels, specifically talking about a recent deal where a broadcaster had entered into a deal with a company that would be brokering a digital channel in major markets, and programming that station with a format directed to the Asian communities. Broadcasters are generally familiar with the fact that, when they broker their traditional analog broadcast station to a third party, the licensee remains responsible for the content that is delivered in that brokered programming – e.g. making sure that there are no payola, indecency, lottery or other legal issues that pop up in that brokered programming. Broadcasters need to remember that that same responsibility applies to multicast streams, whether they are on HD radio or on a multicast stream broadcast by a digital television station. These stream are over-the-air broadcast channels subject to all FCC programming rules.
Foreign language programming has traditionally presented programming issues for broadcasters. In the 1970s and 1980s, there were multiple cases where broadcasters actually lost licenses because there was illegal activity taking place in brokered programming. In these cases, the programming contained illegal content and the licensee had no way to monitor the content of the programs as the licensee had no one on staff who spoke the language in which the programming was produced. The FCC basically said that the licensee had the responsibility to be able to monitor all programming broadcast on its station – so they had abdicated their responsibility to keep the station in compliance with FCC rules by not knowing what was being said in the brokered programming.
Come the New Year, we all engage in speculation about what’s ahead in our chosen fields, so it’s time for us to look into our crystal ball to try to discern what Washington may have in store for broadcasters in 2009. With each new year, a new set of regulatory issues face the broadcaster from the powers-that-be in Washington. But this year, with a new Presidential administration, new chairs of the Congressional committees that regulate broadcasters, and with a new FCC on the way, the potential regulatory challenges may cause the broadcaster to look at the new year with more trepidation than usual. In a year when the digital television transition finally becomes a reality, and with a troubled economy and no election or Olympic dollars to ease the downturn, who wants to deal with new regulatory obstacles? Yet, there are potential changes that could affect virtually all phases of the broadcast operations for both radio and television stations – technical, programming, sales, and even the use of music – all of which may have a direct impact on a station’s bottom line that can’t be ignored.
With the digital conversion, one would think that television broadcasters have all the technical issues that they need for 2009. But the FCC’s recent adoption of its “White Spaces” order, authorizing the operation of unlicensed wireless devices on the TV channels, insures that there will be other issues to watch. The White Spaces decision will likely be appealed. While the appeal is going on, the FCC will have to work on the details of the order’s implementation, including approving operators of the database that is supposed to list all the stations that the new wireless devices will have to protect, as well as “type accepting” the devices themselves, essentially certifying that the devices can do what their backers claim – knowing where they are through the use of geolocation technology, “sniffing” out signals to protect, and communicating with the database to avoid interference with local television, land mobile radio, and wireless microphone signals.
The FCC has requested public comment on the proposal (about which we wrote here) to increase the power of the digital radio transmissions from 1 per cent of a primary station’s power to 10 per cent of that station’s power. The proposal to increase power for stations using the HD Radio system is supposed to…
A recent proposal to increase the power levels at which HD Radio stations operate – to improve coverage and, perhaps more importantly, building penetration so that people can receive digital channels inside buildings – has been the subject of a cautionary study released by National Public Radio. That study was summarized in a story in the NPR magazine Current (an executive summary can be found here, and the entire 280 page study is here). The study agrees that an increase in power suggested by the recent proposal would increase HD Radio coverage and significantly increase building penetration, but it would do so only at the cost of causing interference to existing analog stations – in some cases significant interference. Such interference would be especially troublesome in receivers in cars, where radio broadcasters have long concentrated some of their most important programming to capture people in the place where competing entertainment options are most limited.
The NPR study does suggest that there could be ways to limit the interference using directional antennas or lessening power but using digital boosters that could be tuned slightly off-center on their frequencies to protect adjacent channel stations. HD radio operates on the sides of a station’s analog channel (thus its original name – "IBOC" for In-Band On-Channel), thus potentially causing interference to adjacent channel stations. By suppressing the signal on the side of the signal nearest to the adjacent channel station and sending the digital bits out of the other side of the channel, some of this interference could be minimized. Yet systems capable of such protections have not yet been fully developed.
The FCC recently issued a Notice of Inquiry, asking if it should consider mandating that XM Sirius receivers also be able to receive HD Radio or to play material from other audio sources. This proceeding was promised as part of the FCC’s approval of the XM-Sirius merger, as a potential way of ensuring that competition in the audio entertainment marketplace remained robust after the merger. While the Commission required that XM Sirius allow manufacturers to build receivers that could incorporate HD Radio or other audio entertainment technologies (e.g. MP3 player, Internet connectivity, etc), it did not require that any receiver contain such technology. This proceeding asks if any sort of requirement along these lines should be adopted. It also seeks information generally about the audio entertainment marketplace.
Specific questions posed by the FCC in this proceeding include:
- Would a mandate promote lower prices and more choices for consumers of audio entertainment?
- Should it be expected that audio devices with multiple audio entertainment capabilities will be developed without an FCC mandate?
- Would an XM Sirius radio with HD Radio capability promote dissemination of state-level EAS messages?
- How well has HD Radio been developing on its own?
- Would multi-function devices facilitate the development of HD Radio?
- Are such devices necessary for the development of HD Radio?
- What other public interest benefits, if any, would result from such a combinations?
- What technological issues would there be in multifunction devices (e.g. manufacturing cost, battery life, size and weight, interference, etc.)?
- If a requirement was adopted, how long would any required phase-in period need to be?
- Should any requirement cover all radios, or just certain types (e.g. in-car, portables, home receivers, etc)?
- Does the FCC have the authority to adopt any such mandate?
That last issue, the FCC statutory authority to adopt rules in this area, is a general question considered in several other recent FCC proceedings (for instance, see out post here). Just because the FCC might think that something is a good idea does not mean that it can adopt rules in an area. Rules requiring that equipment manufacturers take certain actions have run into problems in the Court of Appeals in the recent past as the FCC has only limited jurisdiction over such manufacturers, so any mandate here will need careful justification or perhaps even a specific statutory mandate.