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Yesterday, the Detroit Free Press and the Detroit Morning News, which operate their publication and distribution operations through a joint operating agreement, announced that they will cut back on the physical publication of their papers – publishing full editions delivered to homes only three days a week.  On other days, the papers will publish an abbreviated version, available only on newsstands.  The papers will not abandon news coverage the remainder of the week, but will instead concentrate on their on-line presence, showing the power of the Internet to disrupt traditional media.  As we said years ago in one of our first posts on this blog – New Media Changes Everything, and it seems that this is just another indication of how true that is.  The broadcast media, particularly radio, has often looked at the advertisers served by the daily paper as a ripe source of new business, and may well see the Detroit change as a major business opportunity.  But does it also change the FCC’s consideration of the multiple ownership rules applicable to radio and television cross-ownership with newspapers?

The FCC’s multiple ownership rules prohibit the ownership of a broadcast station and a "daily" newspaper that serve the same area.  The rules define a daily paper as one that is "published" at least four days each week, and is circulated "generally in the community."  Here, the Detroit papers arguably will not meet that 4 day a week requirement – at least for a publication that is generally circulated throughout the community.  Of course, some may argue that the abbreviated newsstand copy constitutes a daily publication but one would assume that, sooner or later, even that will disappear.  Thus, while there has been so much controversy about the Commission’s decision of one year ago (summarized here) deciding that combinations of broadcast properties and newspapers in Top 20 markets were presumed to be permissible, while those in smaller markets were not, one questions whether this still makes any sense in today’s marketplace where seemingly few can profitably publish a daily paper in most markets, and no one seems to want to rescue the many papers that have fallen on hard times. …

Continue Reading Detroit Newspapers Cut Back on Publishing and Home Delivery – What’s the Impact on FCC Ownership Regulation?

As the Obama administration fills its top level government posts, all eyes are now turning to the next levels of government appointments which, at some point, will include a new Chair of the FCC and potentially other new FCC Commissioners. We wrote about our hopes for an Obama administration at the FCC immediately after the election, and now other voices in Washington are weighing in. And, as one might expect, with so many different perspectives, the advice is far from consistent. As we wrote in our analysis, the appointment of the FCC Chair is crucial as it is the FCC Chair, far more than the President or the White House, who sets the tone for Communications policy. This is made clear by the extensive regulations either adopted or proposed for broadcasters by the current Republican FCC, seemingly at the direction of the current chairman, regulations that would not have been expected from a Republican administration.  In light of the economic challenges facing broadcasters, as evidenced by today’s news that two television companies – Tribune and Equity – declared bankruptcy, and another, NBC, has announced a cut back in prime time programming, replacing it with a prime time, 5 day a week Jay Leno program. 

So what should the transition team look to accomplish at the FCC?  In one of the most perceptive articles that I’ve seen recently, Harry Jessell in TV Newsday has urged the new Commission to simply do nothing on broadcast regulation for the next year. The current state of the economy and its ramifications for the advertising that is the lifeblood of the broadcast industry simply leaves no room for broadcasters to have to bear new costs for new regulations.  Broadcasting and Cable magazine has echoed that sentiment last week.  Recently, not only have we seen the economy and the state of the broadcast industry been reflected by the actions announced by Tribune, Equity and NBC today, but we’ve seen numerous mainstream press articles about the economic peril in which the entire broadcast industry finds itself.  In one recent article, radio’s dramatic decline in revenues was highlighted, even as the industry’s listenership remains high (as confirmed by BIA’s recent prediction that radio revenues will decline by 7% in the coming year, coming after declines this year – perhaps the first two year decline in revenues in radio history). I recently attended the Radio Ink Forecast 2009 conference in New York.   While the conference is off the record, I don’t think that I’d be betraying any confidences to state that there was much concern about the short term health of the radio industry. …

Continue Reading As the FCC Transition Progresses, The Broadcast Industry Shows Economic Strains – Tribune and Equity Declare Bankruptcy and NBC Cuts Programming Costs By Putting Leno on at 10 PM, Five Days A Week

At the FCC meeting held on Election Day, the Commission approved the operation of "white spaces" devices in the TV spectrum.  These would be mobile, unlicensed devices that would operate on TV channels that are not used in a particular location.  Many Internet users have hailed the expansion of wireless Internet opportunities that they believe that this decision will bring.  While the FCC promised that these devices would protect television operations and other current uses of the TV Band, many other groups have reacted to the decision far more skeptically.  All in all, we have probably not heard the end of this debate.

The full text of the FCC Order has not yet been released but, from the Public Notice summarizing the action (which came late in the day, after a several hour delay in the start of the FCC meeting), the FCC appears to have made some concessions to the broadcasters who were objecting that the tests of the white spaces devices were not able to adequately sense the presence of television signals in a way that would protect those stations.  So, to protect television signals, the FCC ordered that, in addition to sensing the existence of television signals, the white spaces devices would also have to have geo-location abilities, which would check the location of the device and compare it to a database of television stations and prevent the device from operating on channels that the database shows to be occupied.  Even with this capacity, organizations representing television stations do not believe that this compromise is sufficient to protect those stations.…

Continue Reading FCC Approves White Spaces Devices in TV Band – While Some Hail a Boon to Wireless Internet, Others Say Not So Fast

We recently wrote about the Federal Communications Commission’s actions in their Diversity docket, designed to promote new entrants into the ranks of broadcast station owners. In addition to the rules adopted in the proceeding, the FCC is seeking comment on a number of other ideas – some to restrict the definition of the Designated Entities that are eligible to take advantage of these rules, others to expand the universe of media outlets available to potential broadcast owners – including proposals to expand the FM band onto TV channels 5 and 6, and proposals to allow certain AM stations, which were to be returned to the FCC after their owners received construction permits for expanded band stations, to retain those stations or transfer them to Designated Entities. The proposals, on which public comment is being sought, are summarized below.

Definition of Designated Entity. The first issue raised by the Commission deals with whether the class of applicants entitled to Designated Entity status and entitled to take advantage of the Commission’s diversity initiatives should be restricted. One proposal is to restrict the Designated Entity status to companies controlled by racial minorities. The Commission expressed skepticism about that proposal, noting that the courts had throw out several versions of the FCC’s EEO rules, finding that there was insufficient justification offered by the FCC to constitutionally justify raced-based preferences. The Commission asked that proponents of such preferences provide a “compelling” showing of needed, as necessary for a constitutional justification for governmental race-based discrimination.…

Continue Reading FCC’s Acts to Increase Diversity in Media Ownership – Part 2, The Proposals for Future Actions – Channel 6 for FM, AM Expanded Band, Definition of Designated Entity, Must Carry for Class A TV and Others

In two recent cases, the FCC discussed the issue of "blanketing interference," the interference that can be caused by a broadcaster to electronic devices that are located in homes and businesses near to the station’s transmitter site.  In the first case, the FCC rejected a license renewal challenge finding that there was no…

The FCC has released the agenda for its Open Meeting to be held on Tuesday, November 27.  The agenda is full of issues of importance to broadcasters, and several items may resolve issues that may be troubling – including issues relating to low power FM stations (LPFM) and resolving a long outstanding proceeding concerning the possibility of mandatory public interest obligations for TV stations.  The Commission also has on tap initiatives to encourage the entry of minorities and other new entrants into the broadcast business – even though comments on the Commission’s proposals on this matter were received just a month ago.

First, the Commission is to release an Order on Low Power FM.  We have written about some of the issues that could be decided previously – including issues of whether or not to allow the assignment and transfer of such stations (here) and whether to give these stations preferences over translators and even improvements in full power stations (here and here).

On the TV side, the Commission seems ready to issue an order on the public interest obligations of television operators.  We wrote about the proposals – made as part of the Commission’s DTV proceedings (though to be applicable to all TV stations), here.  Proposed rules included the standardization of quarterly issues programs lists, making station’s public fies available on the Internet, and quantifying other public interest obligations. …

Continue Reading FCC Meeting to Consider LPFM Reform, Public Interest Requirements for TV Stations, and Minority Ownership Proposals

The Copyright Royalty Board today announced that it is taking comments on a settlement to establish royalties for the use of sound recordings to be paid by companies that are planning to provide audio services to be delivered with satellite and cable programming.  In contrast to the "preexisting subscription services" who were in existence at the time of the adoption of the Digital Millennium Copyright Act in 1998, who recently reached a settlement agreeing to pay 7 to 7.5% of gross revenues for royalties (see our post, here), this settlement is with "New Subscription Services" which did not offer these kinds of subscription services in 1998.  This settlement does not apply to subscription services provided through the Internet.  The covered "new subscription services" have agreed to pay the greater of 15% of revenue or a per subscriber fee that will escalate over the 5 years that the agreement is in effect.  Given that these new services will be providing essentially the same service as the Preexisting Services, why the difference in rate?  Perhaps, it is because the difference in the law.

As we wrote earlier this week, the Preexisting Satellite Service pay royalties set based on the standards of Section 801(b) of the Copyright Act, which takes into account a number of factors including the interest of the public in getting access to copyrighted material, the relative contributions and financial risks of the parties in distributing the copyrighted material, the stability of the industry, and the right of the copyright holder to get a fair return on their intellectual property.  By contrast, the new subscription services who entered into the settlement just announced, who weren’t around at the time of the drafting of the DMCA, use the "willing buyer, willing seller" standard also used for Internet radio.  And, because of the applicability of the willing buyer willing seller standard and the apparent uncertainties of the litigation process using it, these new services apparently decided to agree to a royalty double that of the preexisting services, even though they provide essentially the same service.…

Continue Reading Another Proposed Settlement of Another Copyright Royalty Board Proceeding – New Subscription Services

In a very unusual process – one that is probably unprecedented – the FCC last week announced that it is opening a window for parties to file applications for a new AM station to serve Rockland County, New York.  AM stations are traditionally made available for filing on an on-demand basis – when the FCC accepts applications for new stations, parties can file in any location in the country, specifying any city of license that they select, as long as the station that they propose will not create interference to existing stations.  This is unlike FM and TV, where there is a two step process – new channels are first allotted at specific locations based on a party’s request, but that party gets no rights to the channel.  Instead, after the allotment has been made, anyone can file for in a specified window seeking a construction permit to build the new station.  In this window, the FCC has adopted a unique process for an AM stations, a process much more like that used in FM and TV.  The Commission had been asked by a party for permission to operate a new station in Rockland County.  Instead of simply permitting that party to build a station without competition, the FCC decided that a new station was necessary to provide emergency information about the nuclear power plant in the Rockland area, but determined that anyone could file for that channel.  Applications for the channel (1700 AM – on the expanded band, for which there have been no applications for almost 10 years since the first set of expressions of interest were taken), will be accepted from October 1 through October 5.

In order to give parties the ability to prepare applications, the FCC is imposing a freeze on the filing of minor change applications for AM stations throughout the country during the filing window.  Any minor change application that is filed during the window will be returned.  So if you are planning an application for a technical change to your AM station, you need to plan to avoid that filing window.…

Continue Reading AM Filing Freeze While FCC Accepts Applications for a New AM in Rockland County, New York

Every day, on almost every television channel, it seems as if you can find a presidential candidate making an appearance – and it’s not just on the Sunday morning political interview programs.  Last week, it was Hillary Clinton on the David Letterman Show (where her husband is scheduled to appear this week).  In the last two weeks, both Barack Obama and John McCain have made the pilgrimage to talk with John Stewart on the Daily Show.  Mike Huckabee seems to be a fixture on the Colbert Report.  And at the end of last week, TNT reportedly stated that, candidacy or not, it would continue to run episodes of Law and Order featuring Fred Thompson.  With all of these appearances of candidates on television, one might wonder if the FCC’s Equal Opportunities (a/k/a the "Equal Time") rules FCC have been repealed.  In fact, it appears that all of these appearances are within exemptions to, or are otherwise not covered by, the Equal Opportunities Doctrine of the FCC. 

That doctrine requires a broadcaster or, in some instances, a cable system, to provide equal opportunities to competing candidates to appear on the air.  In the most common situation, if one candidate buys commercial time on a broadcast station, the station must treat other candidates in the same race equally, and allow them to buy equal amounts of time on the station at equivalent rates to those paid by the first candidate.  In a candidate is given free time, all his or her opponents are entitled to the same amount of free time, if they request it within seven days of the first candidate’s appearance.  However, the statute provides many exemptions, and all of these recent appearances appear to fall within these exemptions. …

Continue Reading Barack Obama and the Daily Show, Hillary Clinton and David Letterman, Fred Thompson and Law and Order – What About Equal Time?