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The broadcast trade press is full today with the news that NAB CEO Gordon Smith will be stepping back from that position at the end of the year, to be replaced by current COO (and former head of Government Relations) Curtis LeGeyt.  As many will remember, Smith took over the organization over a decade ago during a turbulent time for the industry.  At the time, TV stations faced increasing calls for other uses of the broadcast spectrum, and radio stations faced a possible performance royalty on their over-the-air broadcasts of sound recordings.  Since then, through all sorts of issues, there has been a general consensus in the industry that its leadership was in capable hands and meeting the issues as they arose.

But many issues remain for broadcasters – some of them ones that have never gone away completely.  The sound recording performance royalty for over-the-air broadcasting remains an issue, as do other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems (see our articles here on the GMR controversy and here on the review of music industry antitrust consent decrees).  TV stations, while having gone through the incentive auction giving up significant parts of the TV broadcast spectrum, still face demands by wireless operators and others hungry for more spectrum to provide the many in-demand services necessary to meet the need for faster mobile services (see our articles here on C-Band redeployment and here on requests for a set aside of TV spectrum for unlicensed wireless users).  But competition from digital services may well be the biggest current issue facing broadcasters.…
Continue Reading With a Change at the Top at the NAB as CEO Gordon Smith Plans His Departure – What are the Regulatory Issues That are Facing Broadcasters?

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

  • The Supreme Court this week announced its decision in Federal Communications Commission v. Prometheus Radio Project, the broadcast ownership

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The United States Supreme Court yesterday released its decision upholding the FCC’s 2017 changes to its ownership rules in the FCC v Prometheus Radio Project case (see our summary here).  Those rules had been put on hold in 2019 by a decision by the Third Circuit Court of Appeals which held that the FCC had to develop a more detailed record on the impact of rule changes on minority ownership before making any such changes (see our summary of that decision here).  The Supreme Court did not issue a sweeping decision evaluating the competitive landscape for the broadcast industry, nor was it expected to.  Instead, the Court decision was a narrow legal one, looking at whether the decision of the FCC was entitled to traditional judicial deference to expert administrative agencies.

The Supreme Court was reviewing the legal question of whether the FCC’s 2017 review of diversity was adequately justified.  In 2017, the FCC determined that that no substantial impact on diversity was proven by any party who filed comments in the media ownership proceeding and, to the extent that there was an impact, the benefits of making broadcast companies stronger competitors in today’s media marketplace outweighed that impact.  The Third Circuit would have had the FCC conduct a sweeping historical analysis of the impact of past instances where the ownership rules were relaxed to see the impact on minority ownership so that the FCC could judge the likely impact of new changes to the rules.  The Supreme Court found that the FCC had no obligation to conduct its own studies into that issue and, based on the evidence before the FCC, its decision to relax the rules was not an arbitrary one.  Thus, it was entitled to the deference given to decisions of expert regulatory agencies (see our article here on the deference given to administrative agency decisions).  In essence, this was a narrow decision based on principles of administrative law to which all nine Justices, liberal and conservative, could agree. …
Continue Reading Supreme Court Reinstates 2017 FCC Changes to Broadcast Ownership Rules Including the End to Newspaper-Broadcast Cross-Ownership Ban – But Radio Changes Yet to Come

After a long winter, spring has finally arrived and has brought with it more daylight and warmer temperatures—two occurrences that do not necessarily pair well with keeping up with broadcast regulatory dates and deadlines.  Here are some of the important dates coming in April.  Be sure to consult with your FCC counsel on all other important dates applicable to your own operations.

On or before April 1, radio stations in Texas (including LPFM stations) and television stations in Indiana, Kentucky, and Tennessee must file their license renewal applications through the FCC’s Licensing and Management System (LMS).  Those stations must also file with the FCC a Broadcast EEO Program Report (Form 2100, Schedule 396).

Both radio and TV stations in the states listed above with April 1 renewal filing deadlines, as well as radio and TV stations in Delaware and Pennsylvania, if they are part of a station employment unit with 5 or more full-time employees (an employment unit is a station or a group of commonly controlled stations in the same market that share at least one employee), by April 1 must upload to their public file and post a link on their station website to their Annual EEO Public Inspection Report covering their hiring and employment outreach activities for the twelve months from April 1, 2020 to March 31, 2021.…
Continue Reading April Regulatory Dates for Broadcasters: License Renewal, Issues/Programs Lists, EEO, Webcasting Royalties and More

On Tuesday, as has been covered in most of the broadcast trade press, the US Supreme Court held its oral argument in the Prometheus case.  In this case, the FCC and a number of media companies seek to overturn the Third Circuit’s decision that threw out the FCC’s 2017 media ownership rule changes.  As we wrote here, these changes included the abolition of the newspaper-broadcast and radio-TV cross-ownership rules, the abolition of the “rule of eight” that requires that there be eight independent TV owners in a market to allow the common ownership or control of two TV stations in a market, the allowance in some cases of the common ownership of two of the top 4 TV stations in a market, and the determination that TV joint sales agreements are not attributable.  When the Third Circuit overturned the 2017 decision, those changes were undone (see our article here).  In addition, the Third Circuit’s basis for its decision was that the FCC had done an inadequate job assessing the effect that relaxations in the media ownership rules might have had on minority ownership in the past and how diversity of ownership would likely be affected by the 2017 changes (looking for historical information the FCC claimed not to have).  As a result, all other changes in the FCC’s media ownership rules have been put on hold, including proposed changes to relax the radio ownership rules because if the Third Circuit decision is upheld, any further changes in the local ownership rules have to make that same showing.

The argument on Tuesday went like so many court arguments – there were lots of questions directed by the Justices to all parties in the case.  While there were some questions about whether the FCC had adequately justified its 2017 decision, there seemed to be many questions focused not on whether to overturn the Third Circuit decision, but instead on whether to overturn it on narrow grounds (that the FCC had justified the need for reform of its ownership rules despite any impact it might have on minority ownership and the courts should defer to the opinion of the expert agency), or whether to come out with a more sweeping ruling that says that the statute calling for Quadrennial Reviews of the FCC’s ownership rules makes competition issues the guiding factor in assessing whether or not to relax existing ownership rules, and that ownership diversity is at most a collateral or secondary consideration.  If the Court in fact decides to overturn the Third Circuit, the basis of the decision could impact future ownership proceedings.  What is next for those proceedings?…
Continue Reading The Supreme Court Argument on Media Ownership – What’s Next?

The holiday season is nearly behind us and many are looking forward to putting 2020 in the rearview mirror with a hopeful eye on 2021.  The new year will bring big changes to the Washington broadcast regulation scene, with the inauguration of a new President and installation of a new FCC chair who will make an imprint on the agency with his or her own priorities.  And routine regulatory dates and deadlines will continue to fill up a broadcaster’s calendar.  So let’s look at what to expect in the world of Washington regulation in the coming month.

On the routine regulatory front, on or before January 10, all full-power broadcast stations, commercial and noncommercial, must upload to their online public inspection files their Quarterly Issues Programs lists, listing the most important issues facing their communities in the last quarter of 2020 and the programs that they broadcast in October, November and December that addressed those issues.  As we have written before, these lists are the only documents required by the FCC to demonstrate how stations served the needs and interests of their broadcast service area, and they are particularly important as the FCC continues its license renewal process for radio and TV stations.  Make sure that you upload these lists to your public file by the January 10 deadline.  You can find a short video on complying with the Quarterly Issues/Programs List requirements here.…
Continue Reading January Regulatory Dates for Broadcasters – A New FCC Administration, Quarterly Issues Programs Lists, KidVid, Comment Deadlines and a Supreme Court Oral Argument on Ownership Issues

Last week, Chairman Pai gave a speech to the Media Institute in Washington, talking about his deregulatory accomplishments during his tenure as FCC Chairman.  Central to his speech was the suggestion that the broadcast ownership rules no longer made sense, as they regulate an incredibly small piece of the media landscape, while digital competitors, who are commanding a greater and greater share of the market for audience and advertising dollars, are essentially unregulated.  Not only are they unregulated, but the digital services that compete with broadcasting are owned and financed by companies who are the giants of the US economy.  In his speech, he noted that the company with the most broadcast TV ownership is dwarfed in market capitalization by the companies offering competing video services.

While the Chairman’s speech concentrated on television, mentioning radio only in passing, we note that many of these same issues are even more at play in the audio entertainment marketplace.  When the Chairman two months ago offered remarks on the hundredth anniversary of the first commercial radio station in the US, he recognized that radio has played a fundamental role in the communications world over the last century.  But that role faces more and more challenges, perhaps exaggerated by the pandemic when in many markets listeners are spending less time in cars where so much radio listening takes place.  There are many challenges to over-the-air radio as new sources of audio entertainment that sound and function similarly are more and more accessible to the public and more and more popular with listeners.  Over-the-air radio is already less a distinct industry than a part of the overall audio entertainment marketplace competing with streaming services, podcasts, satellite radio and other audio media.  These changes in listening habits are coupled with a change in the advertising marketplace, as the digital media giants now take over 50% of the local advertising market that was once the province of radio, television and newspapers. …
Continue Reading Outgoing FCC Chairman Pai Calls for Modernization of Media Ownership Rules – Audio Competition Issues for the New FCC To Consider  

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 is seeking comment on proposed sponsorship identification requirements for broadcast programming that is paid for, or provided by,

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November is one of those few months with no routine FCC filing obligations (no renewals, reports, fees or other regularly scheduled deadlines.  While that might seem to suggest that you can take time that you normally devote to regulatory actions to begin your holiday preparations even in this most unusual year, there are still many issues to consider, and you can also use this month to plan for complying with deadlines that fall in December.

While there are no significant comment dates on broadcast matters yet set in November, look for dates to be set in the FCC’s proceeding to determine whether there should be a limit on the number of applications that one party can file in the upcoming window for the filing of applications for new noncommercial, reserved band FM stations.  See our article here on the FCC’s request for comments in this proceeding.…
Continue Reading November Regulatory Dates for Broadcasters: Rulemaking Comments, Hearings on Diversity and a New Commissioner, an FCC Open Meeting and More

The 2017 deregulatory changes to the FCC’s ownership rules have been on hold since December 2019, when the decision of the US Court of Appeals for the Third Circuit, overturning those rule changes, became effective (see our post here).  The court’s decision has put any broadcast ownership changes on hold (including potential changes in the radio ownership rules which were not part of the 2017 FCC decision) while the FCC contemplated how to deal with the fallout from the Third Circuit’s decision.  The potential for another way forward arose last week when the Supreme Court decided to hear the appeal of the Third Circuit decision – granting a petition for “cert” (a petition asking the Court to hear the appeal) – the announcement of that grant coming out on Friday.

As we wrote here, the Third Circuit rejected the FCC’s 2017 ownership rule changes, finding that the FCC had done an inadequate job of assessing how prior ownership relaxations had affected the ability of minorities and other potential new entrants to break into the ranks of broadcast ownership.  Despite arguments from the FCC that it had already analyzed the impact of changes on new entrants and taken steps to mitigate any adverse impact, the Court seemed to be directing the FCC to do a more searching analysis of the historical impact of the relaxation of ownership restrictions on new entrants.  Because this analysis would affect any ownership rule change, including those proposed for radio (see our article here), the decision effectively froze further FCC consideration of all broadcast ownership rule changes.…
Continue Reading Supreme Court to Hear Appeal of Third Circuit Rejection of FCC Changes to Broadcast Ownership Rules