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In a case just released by the FCC, a broadcaster was fined for enforcing a non-compete agreement that was entered into when a broadcaster sold one of its stations in a market in and agreed that it would not compete in the same format if it ever acquired another station in the same market.  The agreement had prohibited the Seller from competing with the Buyer in a news-talk format.  After the closing of the sale of the station, the Seller acquired another station in the market and adopted a format that a local court found was covered by the non-compete clause in the contract.  The local court issued an injunction against the continuation of the news-talk format.  At that point, the Seller filed a complaint with the FCC, arguing that, by obtaining the injunction, the Buyer had engaged in an unauthorized assumption of control of the station covered by the injunction, without FCC approval.  The FCC agreed with the Seller, and fined the Buyer $8000 for exercising control over the station that Seller had bought.

The FCC’s reasoning in this case, citing a similar letter decision from 2006, is that the restriction on format impedes a licensee’s control over its own programming, and restricts its ability to adjust its operations to account for changing market conditions.  The Commission concluded that, barring the licensee from utilizing a particular format, even for the limited period of the non-compete agreement, was contrary to the public interest.  By obtaining the injunction to prevent the Seller from using the news-talk format, the Buyer had impermissibly exercised control over the station that it had already sold.  In fact, the Commission went further, and found that the exercise of control over the programming, personnel or finances of the station would be a violation of the rules.  Continue Reading Format Noncompete Agreements Can Lead to FCC Fine

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  For years, the manual was grossly out of date, finally being updated a few years ago.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 deadline for submitting comments in the Commission’s Localism rule making proceeding is fast approaching.  Comments are due by April 28th, and can be filed electronically through the FCC’s Electronic Comment Filing System.  This proceeding contains a number of significant proposals and could possibly re-institute regulations that were lifted from the broadcast industry decades ago.  Formal ascertainment through community advisory boards and possibly other means, requirements for manning main studios during all hours of operation of broadcast stations, imposing quantitative programming requirements, and requiring that main studios be maintained within a station’s community of license are just a few of the many proposals the FCC is considering.  See our more detailed summary here.  This proceeding seeks input on these and other potentially burdensome requirements, many of which were eliminated by the Commission long ago, and some of which go beyond what the FCC has ever required before.   Given the potential impact this proceeding could have on broadcast stations, broadcasters are encouraged to file comments in this important rule making proceeding.   When submitting comments, commenters should be sure to reference the docket number for this rule making, MB Docket No. 04-233.

Some members of Congress have already chimed in in this proceeding and submitted comments opposing the Commission’s localism proposals.  Over 120 members of Congress signed on to a letter addressed to Chairman Martin urging the Commission to avoid imposing additional regulations on broadcasters and to carefully consider the cost and effect that such regulation would have on the industry.  A copy of the letter is available here.  A summary of the letter posted on Rep. Marsha Blackburn’s web site characterizes the localism proceeding as an attempt to "restore a 1970s era regulatory regime for local broadcasters."  Continue Reading Comments on Localism Proceeding Due April 28; Congress Chimes In

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?

In two decisions released this week by the FCC, here and here, two large broadcast group owners were admonished for failures to comply with the FCC’s EEO rules. In both cases, failures to widely disseminate information about job openings in one market were discovered by the FCC in the course of random EEO audits that selected these stations for review. In both cases, the Commission determined that the violations were serious, and imposed reporting conditions (essentially subjecting the stations to an FCC audit of their EEO annual public file reports every year for the next 3 years). And in each case, the FCC would have fined the stations for their violations, but the Commission moved too slow, as in both cases, license renewals were granted between the time of the violations and the EEO audit.  Under provisions of the Communications Act, the Commission cannot fine a station for action that occurred during a prior renewal term – so the grant of the renewals cut off the possibility of a fine in these cases.

These actions highlight the importance of complying with the Commission’s EEO rules, which we have summarized in our EEO Guide, here. In particular, in both cases, the station groups had not widely disseminated information about job openings, as required by the rules. Wide dissemination requires the use of recruitment sources designed to reach all groups within a community to allow their members to learn about the job openings at the station. The Commission’s aim is to bring into the broadcast workforce employees representing diverse groups within a community rather than hiring all their employees from traditional broadcast sources.  In these cases, the stations had used only corporate websites, on-air announcements, and word of mouth recruiting. No outside sources, or sources reasonably likely to reach the entire community, were used by the broadcasters, hence the admonition and the reporting conditions. Continue Reading What a Difference A Renewal Makes – FCC Admonishes Two Broadcasters for EEO Violations, Fines Would Have Followed if Renewals Had Not Recently Been Granted

In the last few weeks, I’ve received several calls from broadcasters about on-air employees who have decided to run for local political office, and the equal time obligations that these decisions can create.  Initially, it is important to remember that equal opportunities apply to state and local candidates, as well as Federal candidates.  And the rules apply as soon as the candidate is legally qualified, even if the spot airs outside the "political windows" used for lowest unit rate purposes (45 days before a primary and 60 days before the general election).  For more information about how the rules apply, see our Political Broadcasting Guide.  In one very recent example of the application of these rules, a situation in Columbia, Missouri has been reported in local newspaper stories concerning a radio station morning show host who decided to run for the local elective hospital board.  To avoid having to give equal time to the host’s political opponents, the station decided to take the employee off the air.  This was but one option open to the station, as set forth in the article, quoting the head of the Missouri Broadcasters Association, who accurately set out several other choices that the station could have taken. 

These choices for the station faced with an on-air host who runs for office include:

  • Obtain waivers from the opponents of the station employee allowing the employee to continue to do his job, perhaps with conditions such as forbidding any discussions of the political race.
  • Allow the candidate to continue to broadcast in exchange for a negotiated amount of air time for the opponents
  • Provide equal time to the opposing candidates equal to the amount of time that the host’s voice was heard on the air (if the opponents request it within 7 days of the host being on the air)
  • Take the host off the air during the election

Other situations have also arisen concerning non-employees, running for office, who may work for another local station, for ad agencies, or for advertisers, but whose voice or picture appears on spots that run on a station.Continue Reading On-Air Broadcast Stations Employees Who Run for Elective Office – Equal Time for Local Candidates

In the early 1980s, the FCC deregulated many of the very detailed programing rules that governed broadcasters,  based on the theory that the marketplace would assure that broadcasters provided programming of interest to their local community.  The FCC looked at the marketplace, and decided that broadcasters either had to program to the needs of their community, or risk the loss of their audience to competitors.  Now, the FCC is proposing to bring back many of these rules with a vengeance (see our post on the FCC’s current efforts) – imposing rules even more detailed than those that were abolished over a quarter century ago.  A look at this week’s news raises the question of why now – when there are more media choices than ever (and when, particularly in the radio industry, revenues with which to meet such requirements are shrinking) – the FCC cannot rely on the marketplace to assure service to the public.  When marketplace forces require that broadcasters use their most important asset – their localism – to compete against all the new competition, the FCC is now looking to require that broadcasters meet their public interest obligations in a very specific, cookie cutter, government-mandated fashion.  Some of the announcements made this week highlight the extent of the competition that broadcasters now face.

On the most basic level, there are simply far more stations than there ever were.  According to an FCC Report published in 1980, there were 4559 commercial AM stations, 3155 commercial FM stations, and 1038 noncommercial FM stations.  While the number of AM stations had not increased substantially by the end of 2007 (4776), the number of commercial FM stations has doubled to 6309, and the number of noncommercial FMs has increased even more substantially, to 2892.  TV shows a similar increase in service – from 746 commercial and 267 noncommercial stations in 1980 to 1379 commercial stations and 380 noncommercial stations.  In addition, thousand of LPTV stations have been created, and over 800 LPFM stations – services that didn’t even exist in 1980.  Clearly, the over-the-air competition is far greater than when the FCC initiated its deregulation efforts.Continue Reading I-Pod Radio, Internet in Cars and More Broadcast Stations Than Ever – Why Can’t the Marketplace Decide?

The FCC has released the full text of its Order adopting enhanced disclosure requirements for broadcast television stations – requiring that they post their public files on their websites and that they quarterly file a new form, FCC Form 355, detailing their programming in minute detail, breaking it down by specific program categories, and certifying that the station has complied with a number of FCC programming rules.  The Commission also released the new form itself and, as detailed below, the form will require a significant effort for broadcasters to document their programming efforts – probably requiring dedicated employees just to gather the necessary information.  The degree of detail required is more substantial than that ever required of broadcasters – far more detailed than the information broadcasters were required to gather prior to the deregulation of the 1980s – though, for the time being, much (though not all) of the information is not tied to any specific programming obligations set by the FCC.

 Before getting to the specifics of the new requirements, the thoughts of the Commission in adopting this order should be considered.  The Commission’s decision focuses on its desire to increase the amount of citizen participation in the operation of television stations and the decisions that they make on programming matters.  While many broadcasters protested that the public rarely cared about the details of their operations, as evidenced by the fact that their public files were rarely if ever inspected, the Commission suggested that this was perhaps due to the difficulty the public had in seeing those files (the public actually had to go to the station to look at the file) and the lack of knowledge of the existence of the files (though broadcasters routinely broadcast notice of the public file’s existence during the processing of their license renewal applications, rarely producing any viewers visiting the station to view the file).  With respect to the new Form 355 detailing the station’s programming, the Commission rejected arguments that reporting of specific types of programming in excruciating detail imposes any First Amendment burden on stations, as the Commission claims that it has imposed no new substantive requirements.  Yet the Commission cites its desires that the public become more involved in the scrutinizing of the programming of television stations, which it states will be aided by the new form, and also emphasizes the importance that the Commission places on local service (an item detailed in Form 355).  At the same time, in its proposals detailed in its Localism proceeding (summarized here), the Commission is proposing rules requiring specific amounts of the very programming that is reported on Form 355, the very numbers that, in this proceeding, it claims have no significance.  Moreover, citizens will be encouraged by the Commission’s actions to scrutinize the new reports, and file complaints based on the perceived shortcomings of the broadcaster’s programming.  Broadcasters in turn will feel pressured to air programming that will head off these complaints.  So, implicitly, the Commission has created the First Amendment chilling effect that it claims to have avoided.Continue Reading FCC Releases Rules for Enhanced TV Disclosure Requirements

At its December meeting, the FCC adopted a Notice of Proposed Rulemaking on Localism.  At that meeting, while the Commissioners discussed the generalities of the proposals being made, the specifics of the proposals were unknown.  The full text of the NPRM has now been released, and it sets out the areas in which the Commission proposes to re-regulate broadcast stations.  The order also hints at a number of other proceedings that the Commission intends to launch in the near future, and reminds broadcasters of a number of other existing proceedings that will potentially bring about greater regulation.  From the discussion in the NPRM, new rules will apply to all broadcasters – large and small – and potentially place significant burdens on all stations which, as always, are hardest for small stations to deal with.  Given the number of new regulatory initiatives discussed by the Commission, the NPRM is a must-read for all broadcasters, and this proceeding is one in which all broadcasters should participate.

Among the specific proposals on which the Commission asks for comments include the following:

Community Advisory Boards:  The Commission tentatively concludes that all stations will be required to establish a community advisory board to advise the station on the issues of importance to the community that can be addressed in the station’s programming.  The Commission indicated that it did not want to bring back the burden of the ascertainment process that was abolished in the 1980s, but asks how the Board should be established so as to represent the entire community, suggesting that the categories of community leaders that were used in the ascertainment process could be used as a standard to guide the licensee in determining the make-up of the board.  Other questions include how often the board should meet, and how the board members should be selected (or elected – though by whom, the Commission does not suggest).

Other Community Outreach Efforts.  The Commission also suggests that other community outreach efforts should be considered as possible mandates for broadcasters.  These would include the following:

  • Listener surveys by telephone or other electronic means (general public surveys were also part of the ascertainment process abolished in the 1980s, so if this were adopted together with the Community Advisory Board, ascertainment would effectively be back)
  • Focus sessions or town hall meetings
  • Participation of management personnel on community boards, committees, councils and commissions (mandatory civic participation?)
  • Specific phone numbers or email addresses, publicized during programming, for the public to register their comments on station operations.

Remote Station Operations.  Comments are sought as to whether television stations should be forbidden to operate without being manned during all hours of operation.  Radio operations will be addressed in the proceeding to consider the public interest issues posed in the Digital Radio Proceeding (see our summary here).

Quantitative Programming Guidelines.  The Commission proposes to adopt quantitative standards for programming that a station would have to meet to avoid extra processing and scrutiny at license renewal time.  Questions include what categories of standards should be established (just local programs – or more specific requirements to set required amounts of news, public affairs and other categories – and how to define what programming would qualify in each category), should requirements be established as specific numbers of minutes or hours per day or per week or by a percentage of programming or through some other metric, should other specific requirements or measurements be established?

Main Studios.  The commission suggests reverting to the pre-1987 requirement that each station maintain a main studio in its community of license

Network Programming Review.  The Commission asks whether rules should be adopted to require that local network affiliates have some ability to review all network programming before it is aired.  If so, what programs would be exempt from the requirement (e.g. live programs), how much prior review is necessary, would such a right disrupt network operations?

Voice Tracking.  The Commission asks if "voice-tracking," (i.e. a radio announcer who provides announcing on a radio station from outside a local market, sometimes including local inserts to make it sound as if the announcer is local) should be limited or prohibited, or if disclosure should be required.

Local Music.  While the Commission indicates that it did not think that a ban on national playlists was required, it did ask whether broadcasters should be required to report the songs that they play, and how they choose their music.  With that information, the Commission asks if it should consider the amount of local music played when assessing whether a station has served the needs of its community at license renewal time.

Class A TV.  The Commission asks whether it should adopt rules that permit more LPTV stations to achieve Class A status, meaning that they would no longer be secondary stations subject to being forced off the air by interfering uses of the TV spectrum by full-power TV stations.

 

Continue Reading FCC Releases Specifics of Localism Rulemaking – Proposing Lots of New Rules For Broadcasters