Here are some of the regulatory developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC’s International Bureau released a Public Notice on its review of the requests for “lump sum reimbursement requests” for

There were several reports in the broadcast trade press today about an article in the Hill newsletter from retiring Congressman Greg Walden about his proposals to increase diversity in broadcast ownership.  Congressman Walden, a former broadcaster, seeks in his Broadcast Diversity in Leadership Act to foster minority ownership and ownership by new entrants by establishing in legislation an incubator program similar to the one adopted by the FCC in 2018, but put on hold by the Third Circuit Court of Appeals in their decision on broadcast ownership (which is now before the Supreme Court – see our post here).  While, given the short time before the end of the Congressional session, the Congressman’s bill stands little chance of passing both houses of Congress and being adopted before the end of the year, the bill is worth reviewing as it has the support of both the NAB and minority-advocacy organizations, so it could well resurface in a new Congress.

The bill adopts much of the framework of the FCC’s incubator program (which we outlined in our article here).  Under the proposed legislation, an existing broadcaster could work with an aspiring broadcaster to help that new entrant purchase and operate a broadcast station. The bill asks the FCC to adopt rules outlining the support that could be provided to the new entrant, including training, financing and access to resources of the established broadcaster. The established broadcaster could even hold a non-controlling equity interest in the emerging broadcaster, as long as the new entrant retains control.  In exchange for providing the services or financing, if the incubation is determined to be successful after a two-year period, the existing broadcaster would be allowed to acquire one station in a similarly sized market that exceeded the current cap on broadcast ownership allowed by Section 73.3555 of the Commission’s rules.  So, if the existing broadcaster operates in a market where one party can only own 6 stations, it could acquire a seventh.
Continue Reading Congressman Walden Urges Adoption of Broadcast Diversity in Leadership Act – An Incubator Program to Assist New Entrants to Broadcast Ownership

The FCC last week announced an extension of the deadline for initial comments in its proceeding to examine the regulatory fees that are paid by VHF television stations. We wrote here about this Further Notice of Proposed Rulemaking, which asked questions including whether VHF television stations and stations in the FCC’s incubator program

The FCC’s Further Notice of Proposed Rulemaking on annual regulatory fees was published in the Federal Register this week, setting the comment date in that proceeding as November 22, with reply comments due December 23. As we wrote when the FCC’s fee decision for 2019 fees was released, this Further Notice is

Yesterday, a panel of judges from the US Court of Appeals for the Third Circuit decided by a 2 to 1 vote to overturn the FCC’s 2017 decision that made significant changes to its ownership rules (see the decision here).  The Court sent the case back to the FCC for further consideration.  The 2017 decision (see our article here) was the one which ended the ban on the cross ownership of broadcast stations and daily newspapers in the same market and the limits on radio-television cross-ownership.  The 2017 decision also allowed television broadcasters to own two TV stations in markets with fewer than 8 independent owners and made other changes to the radio and TV ownership rules.  Yesterday’s decision also put on hold the FCC’s incubator program meant to assist new owners to acquire radio stations (see our summary of the incubator program here).  All of this was done without any analysis whatsoever as to whether marketplace changes justified the changes to the ownership rules or of the impact that the undoing these rule changes would have on broadcasters and other media companies – including on radio companies hoping for changes in the radio ownership rules in current proceeding to review those rules (see our articles here and here).

What led the Court to overturn the decision if it was not the Court’s disagreement with the FCC’s determination that change in the ownership rules was needed?  This Court, in fact these same three judges, has overturned the FCC three times in the last 15 years, stymieing ownership changes because the Court concluded that the FCC had not sufficiently taken into account the impact that rule changes would have on diversity in the ranks of broadcast owners.  Here, again, the Court determined that the FCC did not have sufficient information on the impact of the rule changes on ownership diversity to conclude that the rule changes were in the public interest – and thus sent the case back to the FCC to obtain that information before making any ownership rule changes.  What led the Court to that conclusion, and what can be done about this decision?
Continue Reading Court of Appeals Rejects FCC Ownership Decision – Putting All Ownership Reform on Hold

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 Notice of Proposed Rulemaking in the next Quadrennial Review of the FCC’s ownership rules was adopted in December and was published today in the Federal Register, starting the 60 day period for public comments. Comments on the NPRM will be due on April 29 with reply comments due on May 29. The FCC is looking at numerous issues, including one issue, the rules setting out the limits on the number of radio stations that one company can own in a market, that has not been reviewed in depth in recent Quadrennial Reviews. On the TV side, the FCC is again looking at local TV ownership (specifically combinations of Top 4 stations in a market and shared services agreements) and also at the dual network rule restricting common ownership of two of the Top 4 TV networks. In addition, the FCC is reviewing additional ideas on how to increase diversity in broadcast ownership. Today, let’s look at the FCC’s questions on the local radio ownership rules.

The review of the radio ownership rules may well be the most fundamental issue facing the Commission in this proceeding, as no real changes have been made in those rules since they were adopted as part of the 1996 Telecommunications Act. As we wrote here, the marketplace has certainly changed since 1996 – which was at least a decade before Google and Facebook became the local advertising giants that they now are; and before Pandora, Spotify, YouTube and many other web services offered by tech giants became competitors for the audience for music entertainment. And spoken word entertainment competition was also virtually non-existent – “audiobooks” were a niche product and the concept of a “podcast” would have been totally foreign when the current rules were written. So what are some of the questions about the radio ownership rules that are being asked by the FCC?
Continue Reading Countdown to Comments on Next Quadrennial Review of Media Ownership Begins – Part I, Local Radio Ownership

At its meeting last week, the FCC adopted a Report and Order creating an incubator program to incentivize existing broadcasters to assist new entrants to get into broadcast ownership. The FCC in its order last year relaxing TV local ownership rules and abolishing the newspaper-broadcast cross-ownership rule had agreed to adopt an incubator program (see our articles here and here). In fact, the US Court of Appeals for the Third Circuit, which is reviewing the FCC’s ownership order, stayed the processing of that appeal to await the rules on the incubator program (see our article here), as the Court has previously indicated that considerations of how changes in the ownership rules affect new entrants is part of its analysis of the justification for such changes. What rules did the FCC adopt?

The FCC will encourage an existing broadcaster who successfully incubates a new entrant into broadcasting by giving them a “presumptive waiver” of the ownership rules. To understand what this means requires looking at several questions including (1) what services does the existing broadcaster have to provide to qualify for the credit; (2) which new entrants qualify for incubation; (3) what is a successful incubation; and (4) what does the presumptive waiver provide to the broadcaster providing the incubation services. Let’s look at each of these questions.
Continue Reading FCC Adopts Incubator Program To Assist New Radio Owners – What Does it Provide?

It may be time for summer vacations, but the FCC seemingly never rests, so there are a number of important dates of which broadcasters need to take note. By August 1, EEO Annual Public File Reports are due to added to the public files of Commercial and Noncommercial Full-Power and Class A Television Stations and AM and FM Radio Stations in California, Illinois, North Carolina, South Carolina, and Wisconsin, if those stations are part of an Employment Unit with five or more full-time employees. TV stations in California have the added requirement that they submit an EEO Mid-Term Report with the FCC by that same date. While the FCC last year simplified EEO recruiting, it still enforces the EEO rules, as evidenced by an admonition that was issued to a TV station at the end of last week, and the fines imposed on radio stations late last year. So don’t forget these obligations (especially as the enforcement of these rules will soon be handled by the FCC’s Enforcement Bureau, rather than the Media Bureau, suggesting that there will be more enforcement of those rules – see our article here).

On other matters, there are numerous open FCC proceedings in which broadcasters may want to participate. Comments are due on August 6 on the FCC’s rulemaking proposal to adopt simplified rules for processing complaints of interference by FM translators to full power stations. See our articles here and here for details on that proposal.
Continue Reading August Regulatory Dates for Broadcasters – EEO Filings, Comments on FM Translator Interference and Class C4 Proposal, EAS Form One and More

April brings with it a milestone – as it is the end of the first quarter since all radio stations have had to have their online public inspection file “live” so that anyone, anywhere, can view a station’s compliance with rules that previously could only be judged by going to the station and reviewing the paper public file. April 10, in particular, is important, as it is when Quarterly Issues Programs Lists, summarizing the most important issues facing the community which the broadcaster serves and the programs that the broadcaster aired to address those issues, must be in the online public file for all full-power radio and TV stations. We wrote about the importance of these sometimes overlooked documents here, as these are the only FCC-mandated documents that reflect how a station has served the needs and interests of its community. We have also noted that, in the past license renewal cycle, missing Quarterly Issues Programs lists were the source of the most fines issued to broadcasters. Now that compliance can be judged at any time by the FCC, their importance is only magnified. So be sure that you get these documents into your online public file by April 10.

EEO Public Inspection File Reports, summarizing a station’s employment record for the prior year, are also to be uploaded to a station’s online public file. For radio and TV stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, these reports need to be completed and included in the public file by April 1 by all stations that are part of employment units with 5 or more full-time (30 hours per week) employees. In addition, radio stations in employment units with 11 or more full-time employees in Delaware and Pennsylvania, and TV stations in Texas with 5 or more full-time employees, also need to file EEO Mid-Term Reports, commonly referred to as FCC Form 397 applications. While the FCC is considering the abolition of the Mid-Term Report (see our article here), the obligation is still in place so, for now, stations must comply.
Continue Reading April Regulatory Dates for Broadcasters – First Quarterly Issues Programs Lists in Online Public File for All Radio Stations and Other Important Dates