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This past week, I attended the BIAfn Winning Media Strategies Conference in Washington, DC.  During the course of the conference, there was much talk about how broadcasters and publishers need to provide unique service to their communities in order to survive in the competitive media marketplace.  The point was made over and over again that, in each market there are unique attributes and personalities that a station should be covering in its programming, and should be exploiting even more broadly through their digital assets, to tie it to its community.  Only by doing so will the station be able to survive in the new media environment – and by doing so, the station may be able to thrive.  In fact, I was stuck by a statement by USC’s Adam Clayton Powell III that domination of the local online and digital media marketplace was "the broadcasters to lose."  In other words, the broadcaster has such unque promotional abilities with its current audience that it can establish its brand in the online and in the mobile world far easier than other media players.  But there were also the repeated warning that there is more and more competition for this local digital market from new entrants and other media entities and that, if the broadcasters did not take advantage of their current advantage, the local service would come from someone else.  What most stuck me was that there was no question that the superservice to local needs would be coming from someone – broadcaster or not – as a result of marketplace developments, not because of any government mandate.  The broadcaster has to adapt to and compete in this new media marketplace or become culturally and economically irrelevant.  The broadcaster needs to serve the local market to meet these challenges, not because some Washington agency has ordered him to do so.  And the broadcaster needs to serve his community in a way that the public will find compelling, not in a way that the government thinks is best.

At BIAfn, the presentation that made the greatest impact was probably that of Greenspun Media from Las Vegas, which has reinvented a secondary newspaper and a Low Power TV station as an on-line powerhouse, uncovering the aspects of the community that would draw the largest audience and covering that information in great detail.  The Las Vegas Sun site not only covers hard news, but also the gaming industry, University of Las Vegas sports and even state government issues in a way that its audience seems to find interesting.  Even a history of Las Vegas, in great detail, is included.  And video plays a big part of the site, with the company in development of a hip news and events program, 702.tv, that will soon be a daily program on the television station and online (featuring local "celebrities" doing the weather, including strippers and Neil Diamond sound-alikes).  While some attendees at the conference thought that Las Vegas presented unique opportunities that might not be available in all communities, many were immediately speculating on the opportunities in their own communities to find unique personalities and events that could be developed on-air and on-line in ways to maximize their connection with their audience. Continue Reading Localism Without Government Regulation

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?

The FCC this week released the details of its "White Spaces" decision, authorizing the use of both fixed and mobile unlicensed devices within the television spectrum.  In theory, these devices are supposed to be able to sense the existence of television signals so that they can operate on other frequencies and avoid creating interference.  However, as an extra safety measure, the FCC has also required that these devices connect at least once a day with a database of all other protected users of the television spectrum and, by used of geo-location technology, determine what other users are in the area where the "TVBD" (television band device) is being used and operate on frequencies which protect those other users.  Our firm has prepared a memo outlining the full decision.  The Davis Wright Tremaine memo can be found here.  When one reviews the full text of the FCC decision, it becomes pretty clear that we should not look for such devices anytime soon.

While the Commission’s order actually discussed in some detail the question of whether these devices should be permitted to operate before the end of the digital television conversion in February 2009, given the issues that still need to be resolved, this discussion really appears to be an academic one.  First, devices that meet all of the FCC requirements have to be designed and built, and type-accepted by the FCC labs.  In a recent article by Shelly Palmer in his well regarded blog on television issues, he suggests that many engineers are convinced that these devices simply will not work.  When one reviews the FCC requirements, one can see why that might be the case.Continue Reading Details of White Spaces Decision Released – Don’t Look for Them Soon as There is Lots to Do Before Any Devices Will Be Introduced

Last week, President-elect Barack Obama delivered his first weekly radio address since he was elected President.  The broadcast made news, not only for its content, but also because it was streamed on the Internet, particularly on You Tube, but also retransmitted on many other websites.  The fact that the Internet makes such transmissions not only possible, but so easy and so widely available demonstrates one of many reasons why all the worry about the return of the Fairness Doctrine is unwarranted.  With access to so many diverse opinions not only on the radio but also through all of the new technologies, why should the government care that one radio station may not cover all sides of a controversial issue?  If one station does not put on a strongly held viewpoint on an important issue, you can bet that someone who holds that viewpoint will find some way to transmit it to others. 

The return of the Fairness Doctrine has been the great invisible monster in the room since the election – with many commentators, particularly conservative ones, worrying that the Democratic Congress will attempt to reinstate the Fairness Doctrine.  Off-hand comments such as those made by Senator Schumer on Fox News, have fueled this speculation, even though the Obama campaign has specifically rejected such a return.  The Fairness Doctrine is one grounded in scarcity of the electronic spectrum – from the fear that if one side of an issue was allowed to dominate one of the few means of communicating with the population of a community, it would effectively be able to stifle the ability of those with contrasting viewpoints to get their message out.   But, to use a phrase that is becoming increasingly popular – that thinking is so 20th Century.Continue Reading Obama’s Radio Address is Streamed on the Internet – Demonstrating Why There Need Not Be Any Return of the Fairness Doctrine

We’ve previously written about the value of music in connection with the royalties to be paid by Internet Radio and the performance royalty (or "performance tax" as it’s labeled by the NAB) proposed for broadcasters. One of the questions that has always been raised in any debate about royalties, and one often dismissed by the record industry, is to what extent is there a promotional value of having music played on the radio or streamed by a webcaster.  In discussions of the broadcast performance royalty, record company representatives have suggested that, whether or not there is promotional value of the broadcast of music, that should have no impact on whether the royalty is paid. Instead, argue the record companies, the creator of music deserves to be paid whether or not there is some promotional value. The analogy is often made to sports teams – that the teams get promotional value by having their games broadcast but are nevertheless paid by stations for the rights to such games. The argument is that music should be no different. That contention, that the artist deserves to be paid whether or not there is promotional value may be tested in connection with what was once thought to be an unlikely source of promotional value for music – the video game Guitar Hero.

Guitar Hero, in its various versions released over the last few years, has proven to be a very effective tool for the promotion of music – with various classic rock bands experiencing significant sales growth whenever their songs are featured on a new version of the game. The use of a sound recording in a video game is not subject to any sort of statutory royalty – the game maker must receive a license negotiated with the copyright holder of the recording – usually the record company.  In previous editions of the game, Guitar Hero has paid for music rights. However, now that the game has proved its value in promoting the sale of music, the head of Activision, the company that owns the game, has suggested in a Wall Street Journal interview that it should be the record companies that are paying him to include the music in the game – and no doubt many artists would gladly do so for the promotional value they realize from the game. Continue Reading Will Guitar Hero Show the Promotional Value of Music and Change the Music Royalty Outlook?

Today, the National Music Publishers Association ("NMPA"), DiMA, the RIAA and other music publishing groups issued a press release announcing a settlement of certain aspects of the current Copyright Royalty Board proceeding to determine the royalties due under Section 115 of the Copyright Act for the mechanical royalty for the reproduction and distribution…

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).Continue Reading Political Advertising Rules for Station Websites – Opportunites and Pitfalls

We’ve written extensively about the FCC’s proposals to turn back the hands of time, and return to the regulatory scheme that existed prior to the early 1980s by mandating that broadcasters serve their local communities – in a manner dictated by the FCC.  In the 1980s, the FCC decided that it did not need to micromanage…

The Federal Communications Commission voted 3-2 on to issue an order imposing regulatory controls on the Internet. The ruling concerns a network management technique used by Comcast for its high-speed Internet service that had the effect of giving slightly lower priority to some peer-to-peer (P2P) upload sessions so that the latency-sensitive applications of the vast majority of its Internet customers would remain uninterrupted. The Commission ruled that the practice—which Comcast previously announced would be phased out this year—violated the Commission’s “network neutrality” policy guidelines and amounted to discriminatory “blocking” and “monitoring” of Internet content, as well as “interference” with consumers’ “right to access” lawful Internet content. While not fining Comcast, the Commission instead orders Comcast to report on the technique, submit a compliance plan for terminating it by year-end, and describe to the FCC and the public the specifics of what new management techniques will be implemented. Noncompliance, warns the Commission, will be subject to future injunctive relief and additional enforcement actions.   Additional details of the FCC’s announcement, and specific concerns about this ruling, can be found in our firm’s advisory bulletin about this decision.  The Press Release on the FCC action can be found here.

While the full text of this decision is not yet available, the New York Times ran a story summarizing its effects.  The statements of the Commissioners on this decision are also available.  The dissents approach the issues from somewhat different perspectives.  Both express the hope that these kinds of objections could have been resolved by industry organizations – Commissioner McDowell’s statement going into great detail about the lack of notice and precedent for the decision, and the potential impact that the decision will have on network management practices and voluntary decisions of Internet management organizations.  Commissioner Tate raises questions of what the decision will do to attempts to design technological systems that can sniff out adult content for purposes of protecting children from such content.  It’s interesting that the FCC’s own proposed rules for portions of the 700 mhz band include such requirements for the monitoring of adult content.Continue Reading FCC Finds Comcast Internet Management Technique Violates Net Neutrality Policy