The FCC’s January 2010 Order authorizing FM radio stations to increase power on their hybrid digital radio operations was published in the Federal Register on Thursday establishing the effective date of the new rules as May 10th. As we wrote earlier, the Commission’s Order allows stations to increase from the current maximum permissible level of one percent
In two decisions released in the last two weeks, the FCC fined two radio stations $4000 each for perceived violations of its contest rules. The first decision was based on a perceived ambiguity in the contest rules that did not make clear in broadcasts and in written rules that there would be only one winner in a contest. In the second, the FCC faulted the licensee for not giving the prize away within 30 days of the contest end. Both cases demonstrate the seriousness with which the FCC seems to take contest rules, especially the need for disclosure of all material terms to listeners, both in over-the-air announcements (see our post here on the need to broadcast the material terms of a contest) and in the written rules governing the contest. Seemingly, ambiguities will be construed against the licensee and any material parts of the contest, including when the prize will be delivered must be clear the contestants.
In the first case, The Commission found that the licensee had not made clear in its on-air announcements and in its written rules that there would be only one prize awarded in the contest. When one closely reads the case, what seems to come through most clearly is that the Commission is expecting licensees to document carefully that they have clearly provided the material rules of the contest on the air, sufficiently so that a reasonable listener would be aware of those rules. In this case, the licensee was unable to document how often its announcements providing the rules were broadcast, or to conclusively say if they had ever been broadcast at all. The contest was to give away a garage full of prizes, so it would seem that the nature of the contest itself made clear that there was going to be only one winner. But the Commission concluded that there were not enough unambiguous statements that there would be but a single winner – thus prompting the fine.
Incomplete public inspection files were the largest source of fines during the last license renewal cycle. We wrote last week about two noncommercial broadcasters whose renewal applications filed many years ago have just now led to consent decrees and voluntary contributions to the US treasury in lieu of fines. To help commercial broadcasters avoid these…
In one more indication that the Broadcast Performance Royalty (or "performance tax" as opponents of the legislation call it) is not dead yet is an article in yesterday’s New York Times reviewing the issues at stake in the proceeding. What was perhaps most interesting about that article was the fact that it appeared only one page away from an article about Internet Radio service Pandora, and a discussion of how that hugely popular service was almost driven out of business by music royalties set by the Copyright Royalty Board in their 2007 royalty decision. The article about the broadcast performance royalty mentions that one of the difficulties in assessing the impact of the proposed royalty is that no one knows how much it will be, as it would be set by the Copyright Royalty Judges on the CRB. Yet the Times makes no mention of the controversy over the previous decisions of the Board in the context of the Internet radio royalties, and how such royalties almost impacted services such as Pandora.
How much would the proposed royalties on broadcasters be? We have written before on that subject,here. Under previous decisions using the "willing buyer, willing seller" royalty standard which is set out in the legislation that has passed House and Senate Judiciary committees dealing with this issue, the lowest royalty for the use of music in any case before the CRB has been 15% of gross revenues. Even using a standard seemingly more favorable to the copyright user (the 801(b) standard that assesses more than the economic value of the music but also looks at the impact that the royalty would have on the stability of the industry on which it is imposed), the royalties have been in the vicinity of 7% of gross revenues for both satellite radio and digital cable radio, the two services that are subject to royalties set using the 801(b) standard. This is more than broadcasters currently pay to ASCAP, BMI and SESAC – rates which are also currently the subject of proceedings to determine if these rates should be changed (see our posts here and here).
On February, 18, 2010, David Oxenford conducted a seminar for the Utah Broadcasters Association on legal issues that affect radio and television broadcasters. First, David summarized the various broadcasting legal and policy issues pending before the FCC and Congress. David’s PowerPoint presentation is available here. Broadcasters interested in Washington issues that may affect them this year may…
Two FCC cases were released last week fining broadcasters for violations of the FCC rule against broadcasting a telephone call (or recording a call for broadcast purposes) without first obtaining the permission of the person at the other end of the call. In one case, a licensee was fined $16,000 for phoning a woman, pretending to be a hospital calling with news that her husband had been in a motorcycle accident and had died. The FCC refused to reduce or eliminate the fine because the call was made by an independent contractor, as the Commission found that the contractor had been hired to provide recorded "bits" for the station, and was thus not acting outside of any limits set by the licensee. The decision also made clear that the violation occurs as soon as the person at the other end says "hello", if a recorder is running, even if the person being recorded subsequently consents to the broadcast of the call.
The size of the fine may seem surprising, but the Commission’s staff found $16,000 to be appropriate due to the fact that the same licensee had just recently been fined for a similar offense. In another case released the same day, the fine was "only" $4000. Here, the call was made to airport officials in the context of asking these officials questions about a local controversy. The licensee raised a host of defenses – all of which were rejected. First, the FCC would not eliminate the fine based on the fact that the station employee making the call had immediately identified himself as being from the station. The licensee argued that, as the caller had identified himself as being from the station, the recipients of the calls should have known that they were on the air, and had thus implicitly consented to being broadcast as they kept talking. The FCC rejected this argument for two reasons. As the call was immediately put on the air, the decision found that once the "hello" was broadcast without prior permission, the station had violated the rules. Moreover, the exception in Section 73.1206 (the rule that bans the broadcast of phone calls without permission) that allows calls to be broadcast where the person on the call can reasonably be expected to know that the call will be broadcast applies only to situations where the caller "originates the call" to the station – calling the station to be put on a program (like a talk show) that they know or should anticipate will be broadcast.
Continue Reading $16,000 Fine For Recording Telephone Conversation for Broadcast Without Prior Permission – No Excuse Because Call Made By Independent Contractor, By Subsequent Approval, or By the First Amendment
This afternoon the Commission released an Order authorizing FM radio stations to increase power on their hybrid digital radio operations. This power increase is a welcome boost to HD radio operations and was eagerly awaited by many FM stations broadcasting in digital. In a nutshell, the rule change allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP. In raising the power permitted for digital radio operations, the Commission acknowledged that the current digital power levels are insufficient to replicate stations’ analog coverage and that indoor and portable coverage are particularly diminished. Building on proposals advocated by National Public Radio (NPR) and iBiquity, the Commission has provided for an immediate voluntary 6 dB increase in Digital ERP (except for super-powered FM stations, as discussed below). In addition, stations will be allowed to seek authority for increases over 6 dB up to a maximum of 10 dB using an informal application process.
Once the Order becomes effective, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures. Stations availing themselves of the voluntary power increase must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission’s Consolidated Database System (CDBS). The exception to this is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station’s antenna height above average terrain. The Audio Division’s web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP. Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station’s FM Digital ERP.
For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB. Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station’s max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here.