February 1 is the deadline by which broadcast stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma must place into their Public Inspection files their Annual EEO Public Inspection File Report. The report must also be available on these stations’ websites, if they have such sites. The Annual EEO Public Inspection File Report
With much of the media world celebrating the life of Walter Cronkite this weekend, we have to wonder what he would have thought about press reports that the FCC is considering the commencement of a proceeding to investigate the status of broadcast journalism – assessing its quality, determining whether the Internet and other new sources are making up for any quality that is lost, and potentially deciding to mandate specific amounts of news coverage by broadcast stations. That surprising story about a planned FCC Notice of Inquiry on the state of broadcast journalism was reported in an an online report picked up by the broadcast trade press last week. And even if that story is not true, concerns about the government’s intrusion into a broadcaster’s coverage of controversial issues arise from the recent Congressional committee action voting down a bill that would ban the FCC from reinstating the Fairness Doctrine. In what should have been a symbolic embrace of the First Amendment (symbolic as, in the last 6 weeks, four of the FCC Commissioners or Commissioners-to-be disavowed any interest in bringing back the Fairness Doctrine in their confirmation hearings ), the defeat of the bill raises questions as to whether someone has an agenda to resurrect the government’s role in assessing broadcast media coverage of controversial issues. In reading one of the many stories of the life of Cronkite (here, at page 3), we were stuck with the contrast between these actions, and the actions of Mr. Cronkite to address controversial issues – regardless of the FCC implications. One anecdote related his questioning of John Kennedy about his religion when Kennedy thought that topic off limits, even in light of the potential president’s veiled threat that, when he took office, he would be appointing the FCC who would be regulating CBS. Do we really want the FCC to have that power to assess what journalism is good, or what opinions each station must air to ensure "fairness"?
In reviewing the many FCC Fairness Doctrine claims that CBS faced in the Cronkite era, we are struck with the amount of time and money that must have been spent in defending its coverage against critics from both the right and the left. We also found one particularly relevant quote from Mr. Cronkite himself:
That brings me to what I consider the greatest threat to freedom of information: the Government licensing of broadcasting. Broadcast news today is not free. Because it is operated by an industry that is beholden to the Government for its right to exist, its freedom has been curtailed by fiat, by assumption, and by intimidation and harassment.
In the last 20 years, since Mr. Cronkite’s retirement as the CBS anchor, the FCC has steadily moved away from the role that he feared. Yet with these recent actions, one wonders if there are some in government now trying to prove Mr. Cronkite’s concerns correct.
The FCC today released another Public Notice announcing the random audit of the EEO performance of a number of broadcast stations – listing both radio and television stations that have to respond, with stations spread throughout the country. The FCC has promised to annually audit 5% of all broadcast licensees to assess their compliance with the FCC’s EEO rules. These rules require the wide dissemination of information about job openings at their stations and "supplemental efforts" to educate their communities about employment opportunities at broadcast stations, even in the absence of employment openings. The FCC’s audit letter requires the submission of two years worth of the Annual Public File reports that stations prepare each year on the anniversary date of the filing of their license renewal applications. These reports are placed in the station’s public file and posted on their websites (if they have websites). The FCC’s public notice about this audit emphasizes the requirement for posting the Annual Report on a station’s website, perhaps confirming rumors that we have heard about the FCC’s staffers browsing station websites to look for these reports.
Stations are given until May 4 to complete the audit responses and submit them to the Commission. Note that information needs to be supplied not just for the station named on the list, but also for all other stations in the same "station employment unit," i.e. a group of stations under common control, that serve the same general geographic area, and which have at least one common employee. As recent audits have led to significant FCC fines (see our story here about fines issues just before the holidays), broadcasters who are listed on this audit list should take care in preparing their responses. The audit notice should also remind other licensees who are lucky enough to avoid having been selected for inclusion on this audit list to review their EEO programs for FCC compliance purposes, as they could very well find themselves not so fortunate when the next FCC audit is announced.
The battle over the broadcast performance royalty has begun anew, with the introduction of legislation to impose a performance royalty for the use of sound recordings on broadcast stations. This royalty would be in addition to the royalties paid to ASCAP, BMI and SESAC (which go to compensate composers of music), as this royalty would be paid to the performers of the music (and the copyright holders in the recorded performance – usually the record companies). The statement released by the sponsors of the bill cites numerous reasons for its adoption – including the facts that most other countries have such a royalty, that satellite and Internet radio have to pay the royalty, and that it will support musicians who otherwise do not get compensated for the use of their copyrighted material. The NAB has countered with a letter from its CEO David Rehr, arguing that musicians do in fact get compensation through the promotional value that they get from the exposure of their music on broadcast stations. The 50 state broadcast associations also sent a resolution to Congress, taking issue with the premises of the sponsors – citing the differences in the broadcast systems of the US and that of other countries where there is a performance royalty, and arguing that broadcasting is different from the digital services who have a greater potential for substitution for the purchase of music. What does this bill provide?
The bill introduced this year are very similar to the legislation proposed last year (which we summarized here); legislation that passed the House Judiciary Committee but never made it to the full House, nor to the Senate. Some of the provisions of this year’s version include:
- Expansion of the public performance right applicable to sound recordings from digital transmissions to any transmission
- Royalties for FCC-licensed noncommercial stations would be a flat $1000 per year
- Royalties for commercial stations making less than $1.25 million in annual gross revenues would pay a flat $5000 per year. There is no definition of what constitutes "gross revenues," and how a per station revenue figure could be computed in situations where stations are parts of broadcast clusters
- Excludes royalties in connection with the use of music at religious services or assemblies and where the use of music is "incidental." Incidental uses have been defined by Copyright Royalty Board regulations as being the use of "brief" portions of songs in transitions in and out of programs, or the brief use of music in news programs, or the use in the background of a commercial where the commercial is less than 60 seconds – all where an entire sound recording is not used and where the use is less than 30 seconds long
- Allows for a per program license for stations that are primarily talk
- Establishes that the rates established for sound recordings shall not have an adverse effect on the public performance right in compositions (i.e. they can’t be used as justification for lowering the ASCAP, BMI and SESAC rates)
- Requires that 1% of any fees paid by a digital music service (such as a webcaster, or satellite radio operator) for the direct licensing of music by a copyright owner (usually the record company) be deposited with the American Federation of Musicians to be distributed to non-featured performers (background musicians), while the distribution of any fees to the featured performer be governed by the contract between the performer and record company
- Requires that any 50% of any fees paid by a radio station for direct licensing of music be paid to the agent for collection of fees (i.e. SoundExchange) for distribution in the same manner that the statutory license fees are distributed (45% to the featured performer, 2.5% to background musicians, and 2.5% to background vocalists)
Several press reports were issued today suggesting that there is at least some consideration in Congress of delaying the DTV transition now scheduled to be completed on February 17. The consideration stems from the announcement that the NTIA (the National Telecommunications and Information Administration) had run out of money to issue the $40 coupons…
The FCC has adopted new procedures for the submission of complaints about the failure to adequately provide closed captioning of video programming carried on television stations and cable systems. In the same order, the Commission issued clarifications about the impact of the digital transition on the obligations of stations and networks to caption programming…
With Barack Obama’s historic victory just sinking in, all over Washington (and no doubt elsewhere in the country), the speculation begins as to what the new administration will mean to various sectors of the economy (though, in truth, that speculation has been going on for months). What will his administration mean for broadcasters? Will the Obama administration mean more regulation? Will the fairness doctrine make a return? What other issues will highlight his agenda? Or will the administration be a transformational one – looking at issues far beyond traditional regulatory matters to a broader communications policy that will look to make the communications sector one that will help to drive the economy? Some guesses, and some hopes, follow.
First, it should be emphasized that, in most administrations, the President has very little to do with the shaping of FCC policy beyond his appointment of the Commissioners who run the agency. As we have seen with the current FCC, the appointment of the FCC Chairman can be the defining moment in establishing a President’s communications policy. The appointment of Kevin Martin has certainly shaped FCC policy toward broadcasters in a way that would never have been expected in a Republican administration, with regulatory requirements and proposals that one could not have imagined 4 years ago from the Bush White House. To see issues like localism, program content requirements and LPFM become such a large part of the FCC agenda can be directly attributed to the personality and agenda of the Chairman, rather than to the President. But, perhaps, an Obama administration will be different.
The FCC Equal Time rule (or more properly the "equal opportunities" doctrine) requires that, when a broadcast stations gives one candidate airtime outside of an "exempt program" (essentially news or news interview programs, see our explanation here), it must give the opposing candidate equal time if that opposing candidate requests the time within 7 days of the first candidate’s use. Cable systems are also subject the requirement for local origination programming, and many have surmised that, faced with the proper case, the FCC would determine that cable networks are also likely to be covered by the doctrine. While the FCC has extended the concept of an exempt program to cover all sorts of interview format programs, allowing Oprah, The View, Leno and Letterman and the Daily Show to have candidates on the air without the fear of equal time obligations, the rule still theoretically applies to scripted programming. Yet in this election, we have seen candidates appear on scripted programs repeatedly, seemingly without fear of the equal time obligations. Early in the election season, cable networks ran Law and Order with Fred Thompson without any equal time claims being made. All through the election, candidates seem to have made themselves at home on Saturday Night Live, culminating with Senator McCain’s appearances on the SNL programs on Saturday Night and the SNL special run on election eve. Yet through it all, stations have not seemed reluctant to run these programs, and candidates have not seemed to show any interest in requesting any equal time that may be due to them. This seems to raise the question as to whether there remains any vitality to the equal opportunities doctrine.
This is not just a case of candidates deciding not to appear on a program that they don’t like because they don’t want to appear in a program with that particular format, as the equal time rules free the candidates from format restrictions. Thus, had Senator Obama sought equal time for McCain’s appearances on SNL, he would have been entitled to an amount of time equal to the amount of time that McCain appeared on camera, and Obama could have used that time for any purpose that he wanted, including a straight campaign pitch. He would not have had to appear in an SNL skit just to get that time.
The FCC has released another Public Notice that it is auditing the EEO performance of a number of the entities that it regulates. However, this time, the audits are not of broadcasters, but instead of cable companies and other multichannel video programming distributors who are subject to essentially the same EEO rules as broadcasters. The…
We’ve written much about the FCC Localism proceeding and the potential for some resolution of that proceeding in the near term. At the NAB Radio Show, held the week before last, FCC Chairman Kevin Martin suggested that broadcasters should voluntarily agree on a localism plan before there is any change in the administration at the FCC, suggesting that a future FCC may be less willing to compromise than the current one. Of course, a voluntary plan does not mean a code of conduct that broadcasters could unilaterally adopt and voluntarily agree to abide by, but instead it appears to be a request for standards that are voluntarily agreed to by broadcasters and then turned into some version of mandatory rules by the FCC. In a recent article in TV Newsday, some details of what the Chairman would like to see, and what he has apparently suggested to several state broadcast associations, are set out.
According to the article, a significant piece of the Commissioner’s suggested plan would include a requirement (or an option) for broadcasters to meet a mandatory localism obligation by funding investigative journalism conducted by journalism schools at various universities throughout the country. Apparently, stations that funded such journalism, or which aired the stories produced, would get some sort of localism credit. But what would this mean, and how would it impact broadcasters?