Public Interest Obligations/Localism

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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…

Last week, the Office of Management and Budget determined that the FCC’s new rules on Leased Access to cable channels (see our bulletin describing those rules) violated the Paperwork Reduction Act. This means that the new rules, which would have significantly lowered the cost for parties who wanted to lease cable channels to provide their own programming, will be sent back to the FCC for further consideration.  These rules are also on appeal to the Courts, which had stayed the effectiveness of the rules while the appeal is being considered, which is usually a good indication that the Court had issues with the rules as well.  The OMB action has the effect of returning the rules back to the FCC to be considered anew in light of the OMB findings.  Our firm has prepared a memo detailing the decision, here.  Given the OMB decision that these rules imposed too great a burden on cable systems, one wonders if this decision portends a similar result when the OMB reviews the FCC’s rules on Enhanced Disclosure and an on-line public inspection file – rules that would impose a significant burden on television broadcasters (about which we wrote here).

The OMB decision on the leased access rules highlighted some of the perceived shortcomings of the FCC decision, including that the FCC had not shown that they had taken steps to minimize the burden on companies who would have to hire staff to comply with the new rules, and they had not provided reasons why reduced timeframes for responses to requests for leased access were necessary.  Looking at these standards, one would have to think that much of the same reasoning would apply to the FCC’s Enhanced Disclosure requirements for TV stations as set out in the new Form 355.  The completion of the Form would clearly require the hiring of new staff.  We’ve also questioned whether the Commission has given any justification for the increased paperwork requirements, as the information itself has no regulatory purpose as the FCC has not adopted any quantitative standards for public interest programming.  With no purpose and increased costs, how could the OMB treat the enhanced disclosure requirements differently than it did the leased access requirements?Continue Reading OMB Throws Out Leased Access Rules as Violation of Paperwork Reduction Act – Will TV Enhanced Disclosure Be Next?

The FCC today issued an order extending the comment deadline in its Broadcast Diversity proceeding, extending the comment date a full month until July 30, with Reply Comments now due on August 29.  This important proceeding, about which we wrote here, will address many issues, including proposals to, among other things, repurpose television…

I’m writing this entry as I return from the annual convention of the Iowa Broadcasters Association, held this year in Des Moines, Iowa. Anyone who has read, watched or listened to the national news this week knows of the terrible tornadoes that devastated a Boy Scout camp in that state, and the floods ravaging many of its cities and threatening others. I arrived in Iowa on Wednesday having just completed the filing of reply comments in the FCC’s localism proceeding, and after reviewing the many comments filed in that proceeding. After talking with, watching and listening to the Iowa Broadcasters, I was struck by the contrast between the picture of the broadcast industry contained in the Commission’s notice of proposed rulemaking and that which I saw and heard reflected in the words and actions of the broadcasters. I could only think of how the broadcasters of Iowa and the remainder of the country have dealt admirably in their programming with the disasters that nature has sent their way, and with the other issues facing this country every day, and have been able to do this all without any compulsion by the government. Why, when we have probably the most responsive broadcast system on earth, do we need the government to step in and tell broadcasters how to serve their communities?

At dinner on Wednesday, I watched one station general manager repeatedly getting up from his meal to take calls from his station about their coverage of a tornado that had come within a quarter mile of his studio, and how he had to insist that his employees take shelter from the storm rather than continuing to broadcast news reports from their exposed location as the tornado bore down on them. Another told me of how he and another employee had spent the previous day piling sandbags around the station to keep the water from flooding the studio, all the time reporting between every song the station played updates on the weather and travel conditions in their community. Other stations had continued to operate after their tower sites flooded by gerry-rigging antennas on dry land to permit their continued operation. In one of the more minor inconveniences, one station talked about operating for a few days after their city’s waterworks had been inundated by floods , meaning that their studio (and the rest of town) had no running water for drinking or even for flushing the toilets.  Yet, between these inconveniences, large and small, the broadcasters continued their service, without being told how by the government.Continue Reading Iowa Broadcasters – Floods, Tornadoes and Localism

In recent months, the broadcast industry has experienced one of the most active periods of regulatory activity in recent memory. Since November, the FCC has adopted enhanced disclosure obligations concerning the public interest programming of television broadcasters and requirements for an on-line public inspection file; rejected most calls for increased deregulation of broadcast ownership (allowing only the cross-ownership of broadcast stations and newspapers in the largest markets); established specific prohibitions against advertising practices that involved “no Spanish, no urban dictates”; placed mandatory disclosure obligations on television broadcasters in connection with promotion of the DTV transition; proposed rules that could favor low power FM stations over improvements in full-power broadcast services and existing FM translator licensees; and proposed sweeping regulation of broadcasters which could potentially require specific amounts of nonentertainment programming by all stations, restrict the flexibility of broadcasters’ location of their main studios, require 24-7 live staffing for all stations that operate on that basis, and perhaps even evaluate the music selection process of radio operators. Rumored to be in the offing are proposals to regulate embedded advertising, to adopt enhanced rules on sponsorship identification in connection with video news releases and payola-like practices, and perhaps even expand EEO reporting requirements (as the FCC recently asked for public comment on the employee-classification information for its long-suspended requirements for the filing of FCC Form 395 – the Annual Employment Report in which stations categorize all their employees by their employment duties, race and gender). And Congress has not been idle, with proposals introduced for the adoption of a performance royalty on over-the-air radio for the use of sound recordings, hearings about potential restrictions on prescription drug advertising, and a proposal to roll back the limited ownership reform adopted by the Commission in December.

With all this activity in a six month period under a Republican administration with a Republican majority on the FCC, during a time of great turmoil in the broadcast industry itself, as television prepares for the digital transition and broadcast revenue growth is slow or nonexistent (based on a variety of factors including general economic conditions and competition from the plethora of new media choices), many broadcasters are wondering what’s going on? And some fear even more changes could come about in any new administration that may come to Washington after the November elections, no matter what the result of that election. The one candidate with the most experience in the regulation of broadcasting, Senator McCain who has chaired the Senate Commerce Committee which regulates the broadcast industry, has by no means been a captive of the broadcast industry – leading efforts to enhance the use of LPFM and at one point pushing a spectrum tax proposal for television broadcasters for the use of the digital spectrum.Continue Reading Broadcasters and the Regulatory Pendulum – Swinging Toward More Regulation

Just prior to the filing of comments in the FCC’s Localism proceeding on April 28, one FCC Commissioner has spoken out, condemning these proposals as being unnecessary in a world of vast media competition, and likely unconstitutional.  According to press reports, Commissioner Robert McDowell last week argued that the rules were unnecessary and counterproductive in a world of media plenty.  The Commissioner pointed to all of the competition from digital and traditional media and asked why the Commission should impose on broadcasters rules abolished 20 years ago – rules which will put them at a competitive disadvantage in the new media world.  These are sentiments that we have repeatedly echoed here.

Today, as comments were being submitted to the Commission, a letter from 23 Senators was sent to the Commission making many of the same arguments.  The letter suggests that the Commission was imposing unreasonable costs on broadcasters when these broadcasters have an economic incentive to serve the public or risk the loss of their audience and the resulting loss of advertising and income.  In other words, they are arguing that the Commission had it right 20 years ago when it decided that marketplace competition would insure that broadcasters served the public interest.  This letter is a companion to the letter sent to the FCC the week before last by members of the House of Representatives, about which we wrote here.Continue Reading As Comments are Filed in Localism Proceeding, Commissioner Speaks Out

The Public and Broadcasting is a document first written by the FCC in the 1970s to tell the public about how the FCC regulates broadcast stations, and to tell the public how they can get involved in the regulatory process.  Broadcasters must maintain a copy of the manual in their public file, and make it available to members of the public who request it.  For years, the manual was grossly out of date, finally being updated a few years ago.  Today, the FCC issued a Public Notice announcing that they have once again updated The Public and Broadcasting, and that all stations need to place the new version in their public file.  The new version, with a new subtitle "How to Get the Most Service from Your Local Station" can be found here.  Stations should print that document, and place it in their public file.

The manual is updated, and sets out most of the programming and other operational rules that would be of interest to the public.  The manual seems to be objective – pointing out that most programming decisions are left to the broadcast licensee to avoid violating the Freedom of Speech rights of the broadcaster. 

Continue Reading FCC Releases New Version of the Public and Broadcasting and Sets Up Help Desk for Broadcast Complaints

The FCC Form 355 requiring "enhanced disclosure" by television stations was a frequent topic of discussion at this week’s NAB Convention in Las Vegas.  That form will require that television broadcasters report significant, detailed information about their programming, providing very detailed reports of the percentage of programming that they devote to news, public affairs, election programming, local programming, PSAs, independently produced programs and various other program categories, as well as specifics of each program that fits into these categories (see our detailed description of the requirements here).  Obviously, all broadcasters were concerned about how they would deal with the expense and time necessary to complete the forms, and the potential for complaints about the programming that such reports will generate.  At legal sessions by the American Bar Association Forum on Communications Law and the Federal Communications Bar Association, held in connection with the NAB Convention, it became very clear to me that the obligations imposed by these new rules are obligations adopted for absolutely no reason, as the Commission has not adopted any rules mandating specific amounts of the types of programming reported on the form.  In fact, one of the Commissioner’s legal assistants confirmed that, unless and until the FCC adopts such specific programming requirements, the Commission’s staff will not need to spend any time processing these forms.  Thus, if the form goes into effect, broadcasters will be forced to keep these records, and expend significant amounts of staff time and station resources necessary to complete the forms, for essentially no purpose.

Of course, public interest advocates will argue that the forms will allow the Commission to assess the station’s operation in the public interest, and will allow the public to complain about failures of stations to serve local needs.  But, as in a recent license renewal case we wrote about here, the Commission rejected a Petition to Deny against a station based on its alleged failure to do much local public affairs programming as, without specific quantitative program requirements, the Commission cannot punish a station for not doing specific amounts of particular programming. If the Commission adheres to this precedent, it will not be able to fine stations for the information that they put on the Form 355, but only for not filing it or not completing it accurately.  Thus, unless the Commission adopts specific programming requirements, the form will be nothing more than a paperwork trap for the unwary or overburdened broadcaster.  And, as is usually the case with such obligations, the burden will fall hardest on the small broadcaster who does not the staff and resources to devote to otherwise unnecessary paperwork.Continue Reading FCC Form 355 – A Form Without a Reason?

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