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
The Federal Communications Commission voted 3-2 on to issue an order imposing regulatory controls on the Internet. The ruling concerns a network management technique used by Comcast for its high-speed Internet service that had the effect of giving slightly lower priority to some peer-to-peer (P2P) upload sessions so that the latency-sensitive applications of the vast majority of its Internet customers would remain uninterrupted. The Commission ruled that the practice—which Comcast previously announced would be phased out this year—violated the Commission’s “network neutrality” policy guidelines and amounted to discriminatory “blocking” and “monitoring” of Internet content, as well as “interference” with consumers’ “right to access” lawful Internet content. While not fining Comcast, the Commission instead orders Comcast to report on the technique, submit a compliance plan for terminating it by year-end, and describe to the FCC and the public the specifics of what new management techniques will be implemented. Noncompliance, warns the Commission, will be subject to future injunctive relief and additional enforcement actions. Additional details of the FCC’s announcement, and specific concerns about this ruling, can be found in our firm’s advisory bulletin about this decision. The Press Release on the FCC action can be found here.
While the full text of this decision is not yet available, the New York Times ran a story summarizing its effects. The statements of the Commissioners on this decision are also available. The dissents approach the issues from somewhat different perspectives. Both express the hope that these kinds of objections could have been resolved by industry organizations – Commissioner McDowell’s statement going into great detail about the lack of notice and precedent for the decision, and the potential impact that the decision will have on network management practices and voluntary decisions of Internet management organizations. Commissioner Tate raises questions of what the decision will do to attempts to design technological systems that can sniff out adult content for purposes of protecting children from such content. It’s interesting that the FCC’s own proposed rules for portions of the 700 mhz band include such requirements for the monitoring of adult content.Continue Reading FCC Finds Comcast Internet Management Technique Violates Net Neutrality Policy
Today’s morning newscasts were filled with the stories of the passing of George Carlin – a comedian and satirist who effectively wrote the indecency regulations that most broadcasters abide by – without the FCC ever having had to adopt the regulations that he attributed to them. In the broadcast world, Mr. Carlin was probably best known for his routine about the Seven Words that You Can Never Say on TV. When that routine was aired by a New York radio station, and heard by a parent who claimed that he had a child in his car when the routine came over his radio in the middle of the day, the resulting FCC action against the station resulted in appeals that ended in the Supreme Court which, in its Pacifica case, upheld the right of the FCC to adopt indecency rules for the broadcast media to channel speech that is indecent, though not legally obscene, into hours when children are not likely to be listening. But what this case and the FCC ruling did not hold are perhaps more misunderstood than what the case did hold.
First, the case was about "indecency" not "obscenity." Many of this morning’s newscasts referred to the Pacifica decision as being an Obscenity decision. Obscenity is speech that can be banned no matter what the time and place, as it is speech that is deemed to have no socially redeeming value. Indecency, on the other hand, is a far more limited concept. Indecent speech is speech that is constitutionally protected – it has some social significance such as the social commentary clearly conveyed by the Carlin routine. It cannot be constitutionally banned. But the Supreme Court upheld the FCC’s decision in the Pacifica case that, because of the intrusive nature of the broadcast media, it can be limited to hours where children are not likely to be in the audience. Hence, the FCC has a "safe harbor" that allows indecent programming between the hours of 10 PM and 6 AM, when "obscene" programming is never allowed on the air.Continue Reading George Carlin – Writing the Indeceny Rules the FCC Never Did
A recent Washington Post article highlights a bill that was recently introduced in Congress suggesting that the FCC bring back their rules for audio descriptions of video programming – rules which were thrown out by the Courts several years ago as being beyond the scope of the Commission’s authority without explicit Congressional authorization. But not only does this bill propose to give that missing Congressional approval to the FCC to re-introduce video description requirements for broadcast television, but it would authorize the FCC to introduce these rules, and closed-captioning requirements, on all video screens, including MP3 players, wireless devices and other video devices getting their programming through the Internet or other digital technologies. With this bill, and various other proposals that have surfaced in recent months, it seems more and more likely that, as the Internet becomes even more important in the provision of broadcast-like programming in the future, the FCC may be called on by Congress to impose broadcast-like restrictions on that programming.
The full text of the recent bill, introduced by Congressman Markey, Chair of the House Subcommittee on Telecommunications and the Internet, can be found here. A summary of the bill is also available on Congressman Markey’s website. The bill deals first with the accessibility of telephones and other communications devices, before setting out the provisions dealing with the captioning and video description requirements for broadcast and Internet video devices. The bill first asks the FCC to study and report to Congress on the issues with captioning and video description on video devices, and then asks the FCC to adopt rules governing these matters, making video programming placed on the Internet that was either broadcast on a television stations or which is "comparable" to broadcast programming to be subject to these rules. The idea is to make all TV-like programming subject to the rules, no matter what device it is viewed on. Presumably, if adopted, the law would allow the FCC to make exemptions for certain types of programming (just as it currently allows exemptions from the current closed captioning requirements for small entities that have insufficient resources to caption a program). The bill also requires that the FCC make sure that program guides and emergency information are available to those with hearing or visual difficulties, and that the navigation devices on video receivers can be worked by those with disabilities. So the FCC would have much to do to comply with this law, if adopted, and all within an 18 month period.Continue Reading Closed Captions and Video Description – The First Step to FCC Regulation of On-Line Media?
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.
The Senate Commerce Committee held a hearing this week on the Future of the Internet, dealing principally with the issue of net neutrality – whether Internet Service Providers treat all content carried through their facilities equally. This issue principally involves questions of whether ISPs can charge big bandwidth users for their content to be transmitted through the ISPs facilities, or to be transmitted at preferred speeds. The testimony of Chairman Martin at the hearing raised several issues – issues both about what he said and what some reports perceived him to say. Some reports had him saying that the FCC did not need to regulate indecency on the Internet – though I never heard that question asked. But he did say that he did not have trouble with ISPs blocking illegal content such as child pornography and illegal file-sharing, which raises the question of whether some might look to ISPs to become copyright police – blocking access to material that does not have copyright clearances. And, with the hearing being held on the same day as a media company purchased a company that can identify copyrighted material by reviewing that content when transmitted on the Internet – is that possibility coming closer to being a reality?
In recent weeks, there have been several trade press reports about government regulation of indecency on the Internet. I’ve seen at least two trade press reports on Chairman Martin’s testimony before the Commerce Committee, claiming that he said that no government regulation of indecency on the Internet was necessary. I did not hear any reference to indecency regulation in his testimony (a written version of his statement is available here, and you can watch the entire testimony, here). Instead, that testimony was about whether Congress needed to pass laws to allow the Commission to enforce its net neutrality principles. Nonetheless, the press seems to believe that Internet indecency is an issue which might be targeted by regulation. A recent study finding that the majority of Americans think that FCC regulation of indecency should be extended to the Internet has also been cited in several reports. However, despite the seeming interest in regulation of the Internet, there are serious constitutional concerns about any such regulation. In fact, as we wrote here, numerous attempts to regulate indecency on the Internet have been overturned by the Courts on constitutional grounds, as the government could make no showing that the regulations were the least restrictive means for restricting access to adult content.Continue Reading Indecency and Copyright Enforcement by ISPs? – Questions From the Net Neutrality Hearings
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?
Last week, the FCC approved the long-pending application for the transfer of control of Clear Channel Broadcasting from its public shareholder to several private equity funds. Even though the application had been pending at the FCC for over a year, the Commission’s decision was notable for the paucity of issues that were discussed. The decision approves the transfer, conditioned on certain divestitures by the Company and by the equity funds that will control the new company, including divestitures previously ordered by the Commission in connection with the investment of one of these funds in Univision Broadcasting but not yet completed, and rejects three petitions that, from the Commission’s description, did not involve fundamental issues about the nature of the overall transaction, but were instead devoted to certain limited issues, in two cases involving actions in a single market. The divestiture conditions were approved seemingly as a matter of course, and do not provide any new insights into the law concerning the FCC’s attribution rules (unlike the recent decision approving the transfer of control of Ion Television, about which we wrote here, which contained an extensive detailed discussion of what it takes to make an ownership interest “nonattributable” for purposes of the FCC multiple ownership rules). Given the lack of controversy in the Commission’s order, what is perhaps most noteworthy about the decision are the concurring statements of the two Democratic Commissioners, which may provide some indication of the concerns of the Commission should we have a Democratic-controlled Commission following this year’s Presidential election.
Of course, as we’ve described in our posts about the FCC’s Localism Notice of Proposed Rulemaking (here), and the new rules regarding Enhanced Disclosure requirements for television broadcasters (here), the Commission has already begun to act in a far more regulatory manner than any other Commission in the past 20 years. Yet the issues raised by the Democrats in this decision are in areas not yet considered by the Commission. Commissioner Copps expresses his concern about the role of private equity in broadcast ownership, and whether such ownership is in the public interest. In numerous proceedings and in response to the presentation made at the FCC’s January meeting by the Media Bureau, Copps has suggested that private equity should be investigated, both to determine whether the Commission is fully aware of all ownership ties of the companies involved, and also (as emphasized in this case) for the potential economic impact on the operations of the broadcast stations caused by the new debt involved in the acquisition. Here, Commissioner Copps questions whether the announcement of a potential downgrade of the bonds of the Company if these deals occur should have been of more concern to the Commission. Private equity should be aware that, in a future FCC, an investigation of the economics of their operations should be expected.Continue Reading Does the FCC’s Approval of the Clear Channel Transfer of Control Provide a Window Into the Future?