The FCC last week issued a decision that should make Buyers think twice in determining how sales of broadcast stations are concluded – especially in the days of $325,000 potential fines for indecency violations. In the case decided last week, the Commission concluded that the licensee of a broadcast station was liable for fines for violations
Each election season brings new issues for broadcasters. In recent years, broadcasters are more and more frequently dealing with requests for political uses of the a station’s website. For the most part, unlike a broadcast station that is subject to the full panoply of the FCC’s political rules, those rules largely don’t apply to station websites (some FEC rules, will not be discussed here, may apply to websites). About the only informal pronouncement to come out of the FCC on the use of a station website is that, if the website is sold to one candidate as part of a package with broadcast spot time, then the same offer should be made to competitors of the candidate. This is not an application of FCC’s the rules to the Internet, but instead just a restatement of a long-standing FCC policy that, if one advertiser gets extra benefits that come with the purchase of ad time, and those benefits would be of value to a candidate, they should also be offered to the candidate, and that equal opportunities demands that all candidates for the same office be treated alike.
While the freedom from reasonable access, lowest unit rates, and equal time may seem like a boon to broadcasters, that freedom comes with a price. For instance, the “no censorship rule,” which forbids a station from editing the content of a candidate’s spot or rejecting that spot based on its content (unless that spot violates a Federal felony statute), does not apply to Internet spots. Because candidate spots broadcast on a station cannot be censored, the station has no liability for the content of those spots. So the station is immune for libel and slander, or copyright violations, or other sources of potential civil liability for the content of a candidate’s broadcast spots. But since these spots can be censored or rejected on the station’s website, a station could have theoretical liability for the content of the Internet spot even though the broadcaster could run the exact same spot on the air without fear of any liability. For instance, just recently, according to the Los Angeles Times, CBS asked You Tube to remove a McCain spot attacking Senator Obama as the spot used a copyrighted clip of a Katie Couric commentary without permission. Had that spot been running on a broadcast station, the station would have been forbidden from pulling the spot (and would have no liability for the copyright violation).
The Senate Commerce Committee held a hearing this week on the Future of the Internet, dealing principally with the issue of net neutrality – whether Internet Service Providers treat all content carried through their facilities equally. This issue principally involves questions of whether ISPs can charge big bandwidth users for their content to be transmitted through the ISPs facilities, or to be transmitted at preferred speeds. The testimony of Chairman Martin at the hearing raised several issues – issues both about what he said and what some reports perceived him to say. Some reports had him saying that the FCC did not need to regulate indecency on the Internet – though I never heard that question asked. But he did say that he did not have trouble with ISPs blocking illegal content such as child pornography and illegal file-sharing, which raises the question of whether some might look to ISPs to become copyright police – blocking access to material that does not have copyright clearances. And, with the hearing being held on the same day as a media company purchased a company that can identify copyrighted material by reviewing that content when transmitted on the Internet – is that possibility coming closer to being a reality?
In recent weeks, there have been several trade press reports about government regulation of indecency on the Internet. I’ve seen at least two trade press reports on Chairman Martin’s testimony before the Commerce Committee, claiming that he said that no government regulation of indecency on the Internet was necessary. I did not hear any reference to indecency regulation in his testimony (a written version of his statement is available here, and you can watch the entire testimony, here). Instead, that testimony was about whether Congress needed to pass laws to allow the Commission to enforce its net neutrality principles. Nonetheless, the press seems to believe that Internet indecency is an issue which might be targeted by regulation. A recent study finding that the majority of Americans think that FCC regulation of indecency should be extended to the Internet has also been cited in several reports. However, despite the seeming interest in regulation of the Internet, there are serious constitutional concerns about any such regulation. In fact, as we wrote here, numerous attempts to regulate indecency on the Internet have been overturned by the Courts on constitutional grounds, as the government could make no showing that the regulations were the least restrictive means for restricting access to adult content.