For the first time since the term of FCC Commissioner Tate expired and Chairman Martin resigned, the FCC will be back to full strength with the Senate’s approval of new FCC Commissioners Mignon Clyburn and Meredith Attwell Baker.  What issues of importance to broadcasters will the Commission, now headed by Chairman Julius Genachowski, take up in coming months?   The new Chairman, who gave a number of interviews last week with the trade and popular press, emphasized the importance of the broadband rollout.  Beyond that, his priorities for the broadcast media were not detailed.  He did, however, emphasize, that any broadcast regulation (specifically referencing the mandatory review of the broadcast ownership rules that must begin next year), would have to take into account the realities of the marketplace – including the current economic conditions.

Beyond that, there were few clues as to the new FCC’s priorities in the broadcast world.  But, even though there are no indications of the FCC’s priorities, there are many open broadcast issues that the Commission will, sooner or later, need to resolve.  Some involve fundamental questions of priorities – trying to decide which user of the spectrum should be preferred over others.  Other issues deal with questions of what kind of public service obligations broadcasters will face.  And yet another set of issues deal with just the nitty gritty technical issues with which the FCC is often faced.  Let’s look at some of these open issues that may affect the broadcast industry. 


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When the Low Power FM service was first authorized, it was as a "secondary service," though a recent court decision shows how that secondary status is becoming less and less a reality.  A secondary service is traditionally one that can be allotted where there are no other uses for a particular frequency, and which is subject to being bumped off the spectrum should there be another demand for that spectrum by a "primary" user.  LPFM stations were originally supposed to provide service to areas between full-power FM radio stations, and to be bumped off the air if there was a new FM station authorized or a change in the frequency or power of an existing station.  A decision of the Court of Appeals released earlier this month , upholding an FCC order giving more protections to LPFM stations, puts this secondary service into question.

The Court decision upheld the Commission’s decision, about which we wrote here, determining that waivers of second adjacent channel interference limitations between LPFM and full power stations should be permitted to help preserve LPFM service.  In addition, the Court upheld the FCC’s process in adopting a new "interim" policy which provides that, where an LPFM is providing 8 hours a day of local programming and would be knocked off the air by an upgrade or city of license change of a full-power station, the LPFM station could apply for a waiver of its secondary status, and there would be a rebuttable presumption in favor of such a waiver.  If the waiver is granted, the LPFM station would be preserved, and the application of the full-power station dismissed.  Thus, effectively, LPFM would no longer be secondary, but instead will have assumed a primary, protected status.


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The MusicFirst coalition last week asked that the FCC investigate broadcast stations that allegedly cut back on playing the music of artists who back a broadcast performance royalty, and also those stations who have run spots on the air opposing the performance royalty without giving the supporters of the royalty an opportunity to respond.  While the NAB and many other observers have suggested that the filing is simply wrong on its facts, pointing for instance to the current chart-topping position of the Black Eyed Peas whose lead singer has been a vocal supporter of the royalty, it seems to me that there is an even more fundamental issue at stake here – the First Amendment rights of broadcasters.  What the petition is really saying is that the government should impose a requirement on broadcasters that they not speak out on an issue of fundamental importance to their industry.  The petition seems to argue that the rights of performers (and record labels) to seek money from broadcasters is of such importance that the First Amendment rights of broadcasters to speak out against that royalty should be abridged.

While the MusicFirst petition claims that it neither seeks to abridge the First Amendment rights of broadcasters nor to bring back the Fairness Doctrine, it is hard credit that claim.  After all, the petition goes directly to the heart of the broadcasters ability to speak out on the topic, and seems to want to mandate that broadcasters present the opposing side of the issue, the very purpose of the Fairness Doctrine.  As we’ve written, the Fairness Doctrine was abolished as an unconstitutional abridgment on the broadcaster’s First Amendment rights 20 years ago.  As an outgrowth of this decision, FCC and Court decisions concluded that broadcasters have the right to editorialize on controversial issues, free of any obligation to present opposing viewpoints.  What is it that makes this case different?


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This past week, I attended the BIAfn Winning Media Strategies Conference in Washington, DC.  During the course of the conference, there was much talk about how broadcasters and publishers need to provide unique service to their communities in order to survive in the competitive media marketplace.  The point was made over and over again that, in each market there are unique attributes and personalities that a station should be covering in its programming, and should be exploiting even more broadly through their digital assets, to tie it to its community.  Only by doing so will the station be able to survive in the new media environment – and by doing so, the station may be able to thrive.  In fact, I was stuck by a statement by USC’s Adam Clayton Powell III that domination of the local online and digital media marketplace was "the broadcasters to lose."  In other words, the broadcaster has such unque promotional abilities with its current audience that it can establish its brand in the online and in the mobile world far easier than other media players.  But there were also the repeated warning that there is more and more competition for this local digital market from new entrants and other media entities and that, if the broadcasters did not take advantage of their current advantage, the local service would come from someone else.  What most stuck me was that there was no question that the superservice to local needs would be coming from someone – broadcaster or not – as a result of marketplace developments, not because of any government mandate.  The broadcaster has to adapt to and compete in this new media marketplace or become culturally and economically irrelevant.  The broadcaster needs to serve the local market to meet these challenges, not because some Washington agency has ordered him to do so.  And the broadcaster needs to serve his community in a way that the public will find compelling, not in a way that the government thinks is best.

At BIAfn, the presentation that made the greatest impact was probably that of Greenspun Media from Las Vegas, which has reinvented a secondary newspaper and a Low Power TV station as an on-line powerhouse, uncovering the aspects of the community that would draw the largest audience and covering that information in great detail.  The Las Vegas Sun site not only covers hard news, but also the gaming industry, University of Las Vegas sports and even state government issues in a way that its audience seems to find interesting.  Even a history of Las Vegas, in great detail, is included.  And video plays a big part of the site, with the company in development of a hip news and events program, 702.tv, that will soon be a daily program on the television station and online (featuring local "celebrities" doing the weather, including strippers and Neil Diamond sound-alikes).  While some attendees at the conference thought that Las Vegas presented unique opportunities that might not be available in all communities, many were immediately speculating on the opportunities in their own communities to find unique personalities and events that could be developed on-air and on-line in ways to maximize their connection with their audience. 


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In a speech to the Free Press Summit, Acting FCC Chairman Michael Copps suggested that broadcast license renewals should no longer be a "postcard", but instead should be a real test of the broadcaster’s service to the public interest – and should happen every three years, rather than on the eight year renewal cycle that is currently provided for by the law.  While the Chairman acknowledged that many suggest that the old media are in troubled times and may well be supplanted by new forms of communications, "If old media is going to be with us a while still…we still need to get serious about defining broadcasters’ public interest obligations and reinvigorating our license renewal process."  In other words, while broadcasters may be dying, we should regulate them while we can.

First, it should be pointed out that the broadcast license renewal is no longer a postcard, and really hasn’t been for almost 20 years.  The current renewal forms require certifications on many matters demonstrating a broadcaster’s service to the public and its compliance with the rules, and additional documentation on EEO performance and other matters.  TV broadcasters also have substantial renewal submissions on their compliance with their obligations under the Children’s television rules.  Issues of noncompliance with the rules resulted in many fines in the last renewal cycle, demonstrating that this is not a process where the FCC is without teeth.  Yet most of these fines were for paperwork violations (e.g. not keeping detailed records of EEO outreach or quarterly issues programs lists demonstrating the public interest programming broadcast by a station), not for any substantive claims that station licensees were fundamentally unqualified and should forfeit their licenses.  In fact, the Acting Chairman’s speech recognizes that most broadcasters do a fine job serving their communities, yet he believes that more regulation is necessary to police those that don’t.  But is this the time to be imposing additional regulatory burdens on all of the industry, for the actions of a few.  Will the overall public interest be served by such actions?  .


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Rural communities – do their radio stations need government protection? The FCC seems to think so, proposing a series of new rules and policies that restrict the ability of the owners of rural radio stations to move their stations into Urban areas. These rules would make it harder for entrepreneurs to do “move in” applications – taking stations from less populated areas and moving them to communities where they can serve larger populations in nearby cities. The Commission states that it is making these proposals to attempt to live up to its obligations under Section 307(b) of the Communications Act to ensure a “fair, efficient and equitable” distribution of radio services to the various states and communities in the country. While this may be a noble goal, one wonders if it is a solution in search of a problem. Are there really rural communities that have an unmet demand for missing radio services – and which can economically support such services? And do these proposals conflict with other goals of the new Commission, by effectively decreasing the opportunities for minorities and other new entrants from acquiring stations in major markets – by taking away move-in stations that are often the only stations that these broadcast station owners can afford in urban markets?  These are questions that the FCC will need to resolve as part of this proceeding. 

A Section 307(b) analysis is done by the FCC when it faces conflicting proposals, specifying different communities of license, for new AM stations or requests for new FM allotments. It is also required when an applicant proposes to move a station from one community to another, as the applicant must demonstrate that the move to the new community would better serve the objectives of Section 307(b) than would the current location of the station. In the past, the 307(b)  analysis looks at several factors, or “Priorities.” These include:

 

  1. Service to white areas – when a proposed station will serve “white area,” an area where residents currently receive no predicted radio service (no “reception service” in FCC parlance). 
  2. Service to gray areas – when a proposed station will serve areas that currently receive only a single reception service
  3. Provision of a first local “transmission” service – where the proposed station will be the first station licensed to a particular community, and thus the first station that has the primary responsibility to serve the needs of that community
  4. Other public interest factors – usually meaning which proposal will provide the service to the most people (with service to “underserved areas,” i.e. those that receive 5 or fewer “reception services,” getting somewhat more weight).


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The Copyright Royalty Board today published a notice in the Federal Register announcing the start of its next proceeding to set the royalties to be paid by Internet radio operators for the performance rights to use "sound recordings" (a particular recording of a song as performed by a particular performer) pursuant to the statutory royalty.  As we’ve written extensively on this blog, the statutory royalty allows an Internet radio station to use any publicly released recording of a song without the permission of the copyright owner (usually the record company) or the artist who is recorded, as long as the station’s owner pays the royalty – currently collected by SoundExchange.  In 2007, the Copyright Royalty Board set the royalties for 2006-2010, a decision which prompted much controversy and is still under appeal.  In the Notice released today, the CRB set February 4 as the deadline for filing a Petition to Participate in the proceeding to set the royalties for the next 5 year period.

The 2006-2010 royalties are currently the subject of negotiations as the parties to the last proceeding attempt to come to a voluntary settlement to set royalties that are different than those established by the CRB decision.  The Webcasting Settlement Act (which we summarized here) gives webcasters until February 15 to reach an agreement as to rates that would become an alternative to the rates that the CRB established.  The Act also permits parties to reach deals that are available not only for the 2006-2010 period, but also allows the deals to cover the period from 2011-2016.  Thus, theoretically, webcasters could all reach agreements with SoundExchange to establish rates that cover the next royalty period, obviating the need for the proceeding of which the CRB just gave notice.  But, as is so often the case, those settlements may not be reached (if they are) until the last minute – so parties may need to file their Petitions to Participate before they know whether a settlement has been achieved.


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With the final transition of television from analog to digital soon upon us, the FCC has scheduled for consideration at its November meeting two items that will address the use of the television spectrum after the transition – one designed to improve television reception, and the other viewed by television broadcasters as a threat to that reception.  The potential positive development is Distributed Transmission Service ("DTS").  The other proposal – which is far more controversial – is the proposal to authorize "white spaces devices" that operate wireless devices within the portion of the spectrum that will still be used by television stations after the transition.

DTS is the proposal that would allow television stations to use more than one transmitter to reach its service area.  Like the use of FM on-channel boosters, a DTS system would permit stations to use multiple transmitters located throughout their service area, each broadcasting on the same channel, but operating at a lower power than the traditional television station which usually operates from a single high-powered transmitter.  The idea is that, in digital, signals distributed from lower power transmitters spread throughout the service area might be less susceptible to signal impediments from terrain and building obstacles than would a single high-power transmitter.  The FCC proposed adoption of this system several years ago with little opposition, but it has languished.  Some have suggested that the experience in Wilmington, where some people who lived far from the center of the market were having over-the-air reception problems, gave new impetus to DTS as one way to provide better service to these more remote areas.


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We’ve written much about the FCC Localism proceeding and the potential for some resolution of that proceeding in the near term. At the NAB Radio Show, held the week before last, FCC Chairman Kevin Martin suggested that broadcasters should voluntarily agree on a localism plan before there is any change in the administration at the FCC, suggesting that a future FCC may be less willing to compromise than the current one. Of course, a voluntary plan does not mean a code of conduct that broadcasters could unilaterally adopt and voluntarily agree to abide by, but instead it appears to be a request for standards that are voluntarily agreed to by broadcasters and then turned into some version of mandatory rules by the FCC. In a recent article in TV Newsday, some details of what the Chairman would like to see, and what he has apparently suggested to several state broadcast associations, are set out.

According to the article, a significant piece of the Commissioner’s suggested plan would include a requirement (or an option) for broadcasters to meet a mandatory localism obligation by funding investigative journalism conducted by journalism schools at various universities throughout the country. Apparently, stations that funded such journalism, or which aired the stories produced, would get some sort of localism credit. But what would this mean, and how would it impact broadcasters?


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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.


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