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If you are a broadcaster, you know that it’s not going to be a good day when you walk into a hearing on the possible extension of the performance royalty in sound recordings to over-the-air broadcasters and see buttons saying "I Support a Performance Right NOW" on the lapels of every other witness on the panel – including the Register of Copyrights, Marybeth Peters.  But that was the scene in Washington, as the House Judiciary Committee’s subcommittee on Courts, the Internet and Intellectual Property held a hearing as to whether the right to collect a royalty for the public performance of a sound recording (the actual song as sung by a particular artist, as opposed to the underlying musical composition) should be paid by broadcasters.  Broadcasters in the United States have paid only a royalty on the public performance of the composition (to ASCAP, BMI and SESAC), and have never paid a royalty for the public performance of the sound recording.  The lack of a sound recording royalty has always been justified in the past on the theory that the artists and copyright holders in the sound recording benefit more than composers through the airplay of the sound recording, as they receive the bulk of the proceeds from CD sales, and the performers benefit from the promotion of live performances.  As they benefit from the promotion provided by the airplay of the song, there is no need for any sort of performance royalty.  As the music and radio businesses have both thrived in the United States – more so than anywhere else in the world – it seemed that this arrangement was mutually beneficial.

But, in recent years, the consensus over this mutually beneficial arrangement seems to have broken down.  Starting in 1995, a performance right in sound recordings has been imposed on digital services, including the royalty on Internet radio which has recently been so controversial (and about which we have written so much, here).  And, with the recent downturn in the record companies’ business, additional sources of revenue are being sought – thus the RIAA and SoundExchange, the collective that receives sound recording performance royalties, have started a Congressional push to require the collection of royalties from over-the-air radio.  And that push was reflected in the hearing held on Tuesday before a House Committee that seemed clearly to favor the imposition of this royalty on broadcasters.Continue Reading House Judiciary Committee Hearing on Broadcast Performance Right – No Breaks for the Broadcasters

The FCC released an order today, fining a broadcaster $20,000 for misrepresentations made in its license renewal application about the completeness of its public inspection file.  The fine issued in this case was not a fine for the fact that the file was incomplete (two stations in the cluster had each already been fined $4000 for the actual public file violations), but instead the fine was issued because the licensee had certified in its renewal application that the public file had been complete and accurate at all points during the course of the license term.  This case highlights both the need to keep an accurate public inspection file, and the need to carefully consider all certifications made in FCC applications.  Incorrect certifications can lead to fines and potentially even more severe sanctions if the FCC finds an intentional misrepresentation or lack of candor – the potential loss of a license.  Admitting a minor paperwork transgression like an incomplete public file will result in a fine – an inaccurate certification which appears to try to hide a problem can lead to far more severe consequences. 

In this case, the FCC found that the licensee had not maintained Quarterly Issues Programs lists.  The licensee claimed that its obligations had been met through a listing of public service announcements that the stations had put in their files.  The FCC rejected that argument, citing the requirement in its rules requiring that Quarterly Issues Programs lists contain "a narrative description of what issues were given substantial treatment" by the licensee as well as the programs that treated each issue.  In addition, the time and date of broadcast of each program, as well as its title and duration, is to be provided.  A simple list of PSAs does not meet these requirements – as it does not list the issues addressed, much less provide the detailed program information required by the rule.  For a summary of the Quarterly Issues Programs list obligations, and a model form to be used to meet the obligations, see our most recent memo on the subject, here.   Remember, the Quarterly Issues Programs Lists are a broadcast station’s only official record of how they have served the public interest needs of its community, so be sure that adequate attention is paid to the completion of these forms.Continue Reading Big Fines for Public File Violation that Escalated

In the broadcast world, if you stick around long enough, what was once big and then faded away will no doubt come around once again.  Whether its the resurrection of prime time games shows that faded in the 50s to become big again today, or the regulatory landscape – it all comes around again.  In comments made to an oversight hearing of the US House of Representatives yesterday, Chairman Martin stated that there is an item circulating through the FCC proposing to require that broadcasters file in their license renewal applications more detailed information about the types of public interest programming they provide.   Until the mid-1980s, broadcasters had to specify the percentage of their programming that was comprised of news, public affairs and "other" public interest programming, as well as the number of public service announcements that the station broadcast.  These specific requirements disappeared in the "deregulation" of the 1980s, but from the statements made yesterday, they may now be making a return if Chairman Martin and the Democratic Commissioners can agree on a set of rules to be imposed on broadcasters.

We’ve written about various proposals to require specific, quantifiable public interest obligations of broadcasters in the context of the recent digital radio order.  We also wrote about the long-outstanding proceeding to quantify public interest obligations of television broadcasters that was mentioned in a recent decision denying a license renewal challenge (and implying that a decision was coming soon).  Whether the Chairman’s mention at yesterday’s hearing of the upcoming "item" was a reference to these two proceedings, or to some entirely new effort to re-regulate broadcasters, remains to be seen.  But the "post-card" renewal that was adopted in the 1980s, which has continued to grow in size and complexity over the intervening years, may well grow significantly in the near future.Continue Reading Detailed License Renewal Requirements to Return?

Just when Internet music companies were starting to understand one set of royalties applicable to the use of music on the Internet through the controversy over the Copyright Royalty board decision on royalties for the public performance of sound recordings in a digital delivery system, the Copyright Office held a hearing on Friday to discuss an entirely different royalty – the "mechanical" royalty for the use of the "musical work" in making a "phonorecord."  In plain English, the copyright holder in the publishing rights in a musical composition (the underlying words and music in a song) is entitled to a royalty when a copy of a song using that composition is made.  While that doesn’t sound too complicated, when copies are made in the digital transmission of music over the Internet (and even in other digital media), all sorts of questions arise.  And in the conversations on Friday, questions were raised as to whether the obligation to pay a royalty for making a digital copy even applied to the streaming of a song on the Internet or possibly even the playing of a song on an HD Radio station.  These stations already pay (to ASCAP, BMI and SESAC) for the public performance of a musical composition, but the mechanical royalty is for a different right, and is collected by a different group, and the question being raised was whether a different royalty is also due when music is used a digital context.  This is also different than the SoundExchange royalty that is paid for the public performance of a sound recording (a particular song as recorded by a particular artist).

The Copyright Office held this Roundtable to update the record in a proceeding begun by a Notice of Inquiry issued in 2001 to try to determine how to apply in a digital world the mechanical royalty and the compulsory license for that royalty under Section 115 of the Copyright Act.  That section applies to the use of a composition in the making of a record or CD.  The artist or record company would have to pay the publishing company a flat fee per copy to obtain the rights to use the underlying song.  That fee is currently about 9 cents per copy, though the Copyright Royalty Board is is in the midst of a proceeding that is to determine whether that royalty should be changed.  When applied to the making of a physical copy, that concept is not hard to understand (though, as set forth below, it is not easy to administer).  But, in a digital world, questions arise as to when the obligation to pay a royalty arises.Continue Reading Copyright Office Holds a Roundtable Discussion of the Mechanical Royalty – Another Confusing Royalty for the Use of Music on the Internet

In our recent summary of the Commission’s order on Digital Radio, we wrote about the Further Notice of Proposed Rulemaking that raised specific proposals to adopt new rules regulating the public interest obligations of radio broadcasters.  These proposals included the possible requirements for a standardized disclosure form for a stations public service programs, limits on a station’s ability to originate programming from locations other than the station’s main studio, and possible limitations on the current ability of stations to operate without manned studios.  A recent Commission decision reminds television broadcasters that there is another proceeding – one six years old – that proposes many of the same restrictions on television broadcasters.  Does the recent mention of this proceeding that so closely parallels the recent radio proposals indicate that some action may soon be forthcoming on the TV proceeding?

The TV proceeding was mentioned in an FCC decision released last week rejecting Petitions to Deny that had been filed against a number of license renewal applications for television stations in Wisconsin and Illinois alleging that the stations had not adequately served the public interest through the broadcast of issue responsive programming, especially programming covering election issues.  In rejecting those Petitions, the FCC stated that its ability to second guess the editorial discretion of a licensee was limited by the First Amendment and by the Communications Act’s prohibition against broadcast censorship.  In this case, the FCC said that the showing made by the Petitioner was not sufficient to demonstrate that the stations had not served the public interest of their communities.  However, the decision noted that the Commission was considering quantitative standards for evaluating the public service of broadcast licensees, citing to the long-pending rulemaking proceeding, and implying that the evaluation of these licensees might have been at least somewhat different had these proposed standards been in place.Continue Reading Enhanced Public Interest Requirements for TV Too?

The FCC, after taking two years off, is looking to finish their field hearings on Localism by scheduling a hearing in Portland, Maine on June 29.  This hearing is not one of the six hearings to discuss possible new multiple ownership rules, but instead a continuation of the hearings started by Chairman Powell after public controversy over the 2003 multiple ownership rules.  In an ironic twist of fate, this public notice was released on the Friday before the National Association of Broadcasters Educational Foundation hosts their Service to America Awards Dinner to honor broadcasters and the public service commitment that they have to their communities.  Thus, while the FCC is looking in the hinterlands for evidence of the responsiveness of the broadcast industry to the needs of their listeners, some of the best evidence of that service was on display some 12 blocks from the FCC’s headquarters.

The Localism hearings were part of a larger proceeding begun in response to the controversy after the 2003 multiple ownership rules.  When the Democratic Commissioners, Congressional legislators from both parties, and a variety of citizen’s groups from across the political spectrum complained about how the public’s input was not sought before the rules were adopted, the FCC tried to respond to some of those complaints by putting out a Notice of Inquiry on Localism.  The proceeding was to assess how well broadcasters were serving their communities, and the Notice asked for public comment on a grab bag of issues including the following:

  • whether a broadcaster’s public interest obligations should be quantified (bringing back obligations abolished in the 1980s that required specific amounts of the programming of broadcast stations to be devoted to news and public affairs programming), 
  • should broadcasters be required to play specific amounts of local music,
  • is payola a major issue,
  • whether more programming should be devoted to political campaigns, 
  • whether the voices of minorities were being heard on the airwaves.
  • if the FCC should authorize more LPFM stations and take other steps to make airtime available to new entrants

Continue Reading Another Localism Hearing and Service to America

Yesterday’s New York Times featured an article on its Opinion/Editorial page written by FCC Commissioner Michael Copps, suggesting that enforcement of the public interest obligations of broadcaster become more stringent. Commissioner Copps suggested that broadcasters needed to have their responsiveness to the needs of their community scrutinized more closely, and more often. Among other actions, the Commissioner suggested that license renewal period for broadcasters be shortened from the current eight year term, to once every three years – as well as a host of more stringent and specific programming obligations. Coming on the heels of the FCC’s proposal in the Further Notice of Proposed Rulemaking on Digital Radio (see our summary, here) to explore the local service of broadcasters through a checklist public file report quantifying their public interest service, as well as mandating more local program origination and a greater local presence for stations, local service seems to have emerged as a major issue of concern that may be played out in FCC proceedings in this year leading up to the 2008 Presidential election.

The Copps proposal to shorten license renewal terms back to the three years, and to stiffen the renewal process, asks that the FCC return to a system that required broadcasters to spend significant sums of money on administrative matters that could have better gone to broadcast operations. And the sums that used to be spent on license renewal applications had minimal real impact on the public interest.   While from time to time, broadcasters did run into scrutiny at renewal time, the vast majority of broadcasters’ applications were reviewed in a perfunctory manner and renewed – just as they are today. And with the Commission’s depleted resources that are already stretched thin, it seems unlikely that its staff would be able to provide much greater scrutiny to renewal applications that are filed more than twice as often as they are currently – more than doubling the workload of the already overburdened Commission staff.Continue Reading You Can Force A Broadcaster to Program, But You Can’t Make People Watch: Proposals for More License Renewal Obligations

The FCC today issued the long-awaited text of its decision on Digital Audio radio – the so-called IBOC system.  As we have written, while adopted at its March meeting, the text of the decision has been missing in action.  With the release of the decision, which is available here, the effective date of the new rules can be set in the near future – 30 days after its publication in the Federal Register.  With the Order, the Commission also released its Second Further Notice of Proposed Rulemaking, addressing a host of new issues – some not confined to digital radio, but instead affecting the obligations of all radio operations.

The text provides the details for many of the actions that were announced at the March meeting, including authorizing the operation of AM stations in a digital mode at night, and the elimination of the requirements that stations ask permission for experimental operations before commencing multicast operations.  The Order also permits the use of dual antennas – one to be used solely for digital use – upon notification to the FCC.  In addition, the order addresses several other matters not discussed at the meeting, as set forth below.  Continue Reading FCC Issues Rules on Digital Radio – With Some Surprises that Could Eventually Impact Analog Operations

We recently wrote about the FCC’s proceeding to assess the status of stations that are primarily home shopping in nature – to determine if such stations are serving the public interest and are entitled to must carry status on cable systems.  The FCC has just issued an Order extending the comment deadline in that proceeding. …

Two long awaited broadcast items seem to be missing in action at the FCC. Both the final rules on digital radio ("HD radio") and the Commission’s Notice of Proposed rulemaking on using FM translators to fill in gaps of the signals of AM stations, while expected quite a while ago, have still not been released by the FCC. The digital radio item, adopting rules on digital radio, eliminating the need to file for experimental authority for multi-channel FM operations and allowing AM stations to operate digitally at night, was adopted by the FCC at its meeting in March, yet the final text of the decision still hasn’t been released.  As the text has not been released, the effective date of the new rules has not been set.  Those AM stations ready to kick on their nighttime digital operations continue to wait.

As we explained in our previous posting on this matter, here, the digital radio order also contains a Further Notice of Proposed Rulemaking, addressing issues such as the public interest obligations of broadcasters on their multicast digital channels. That was one of the items that was supposedly delayed the action that finally occurred at the March meeting, and perhaps it is delaying the release of the text of the order in this proceedingContinue Reading Radio Items Missing In Action at the FCC