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As the next broadcast license renewal cycle is about to begin in June (see our post here about that process), the last renewal cycle still has not ended despite the fact that the last renewal application due in that cycle was to have been submitted almost 5 years ago. At the NAB State Leadership Conference held in Washington, DC yesterday, FCC Commissioner Robert McDowell provided statistics about the hundreds of renewals still pending – principally due to indecency complaints against the stations. The FCC will not grant a license renewal application when there is an indecency complaint pending, as the grant of the renewal could preclude the FCC from taking action against the licensee on the complaints filed before the renewal grant. But with indecency enforcement in a holding pattern pending the final resolution of the pending court cases challenging the FCC’s renewal policy (with no immediate end in sight to the uncertainty that surrounds that policy), these renewals are still in limbo. The Commissioner did, however, provide some good news on the indecency front, noting that the Enforcement Bureau had started weeding through all of the pending complaints, dismissing those that were clearly without merit.

The dismissal of indecency complaints that were without merit is a seemingly small, but nevertheless significant, step in weeding out the backlog of renewal applications. The Enforcement Bureau has traditionally not looked deeply into the merits of each of the pending indecency complaints while the Court challenges to the policy were pending, presumably to avoid a waste of resources were the standards to change based on the Court review. But that avoided weeding out some clearly meritless complaints – ones that complained of content that was broadcast during the 10 PM to 6 AM indecency safe harbor, or complaints that were focused on issues that were not prohibited under the FCC’s policy and precedent – such as complaints that really centered on violence, or ones that dealt with innuendo rather than the use of prohibited words or the depiction of prohibited body parts. Up until now, except when there was a sale of a station pending, there was no pressing reason for the FCC to dispose of the complaints. Stations continued to operate, and the pending complaints had little day to day impact.  But, with the renewal cycle soon to begin again, the resolution of these issues takes on some urgency.Continue Reading As License Renewal Cycle Approaches – Dealing With Last Cycle’s Applications Held Up By Indecency Complaints

The nuts and bolts of legal issues for broadcasters were highlighted in two sessions in which I participated at last week’s joint convention of the Oregon and Washington State Broadcasters Associations, held in Stephenson, Washington, on the Columbia River that divides the two states.  Initially, I conducted a seminar for broadcasters providing a refresher on their…

The battle over the broadcast performance royalty has begun anew, with the introduction of legislation to impose a performance royalty for the use of sound recordings on broadcast stations.  This royalty would be in addition to the royalties paid to ASCAP, BMI and SESAC (which go to compensate composers of music), as this royalty would be paid to the performers of the music (and the copyright holders in the recorded performance – usually the record companies).  The statement released by the sponsors of the bill cites numerous reasons for its adoption – including the facts that most other countries have such a royalty, that satellite and Internet radio have to pay the royalty, and that it will support musicians who otherwise do not get compensated for the use of their copyrighted material.  The NAB has countered with a letter from its CEO David Rehr, arguing that musicians do in fact get  compensation through the promotional value that they get from the exposure of their music on broadcast stations.  The 50 state broadcast associations also sent a resolution to Congress, taking issue with the premises of the sponsors – citing the differences in the broadcast systems of the US and that of other countries where there is a performance royalty, and arguing that broadcasting is different from the digital services who have a greater potential for substitution for the purchase of music.  What does this bill provide?

The bill introduced this year are very similar to the legislation proposed last year (which we summarized here); legislation that passed the House Judiciary Committee but never made it to the full House, nor to the Senate.  Some of the provisions of this year’s version include:

  • Expansion of the public performance right applicable to sound recordings from digital transmissions to any transmission
  • Royalties for FCC-licensed noncommercial stations would be a flat $1000 per year
  • Royalties for commercial stations making less than $1.25 million in annual gross revenues would pay a flat $5000 per year.  There is no definition of what constitutes "gross revenues," and how a per station revenue figure could be computed in situations where stations are parts of broadcast clusters
  • Excludes royalties in connection with the use of music at religious services or assemblies and where the use of music is "incidental."  Incidental uses have been defined by Copyright Royalty Board regulations as being the use of "brief" portions of songs in transitions in and out of programs, or the brief use of music in news programs, or the use in the background of a commercial where the commercial is less than 60 seconds – all where an entire sound recording is not used and where the use is less than 30 seconds long
  • Allows for a per program license for stations that are primarily talk
  • Establishes that the rates established for sound recordings shall not have an adverse effect on the public performance right in compositions (i.e. they can’t be used as justification for lowering the ASCAP, BMI and SESAC rates)
  • Requires that 1% of any fees paid by a digital music service (such as a webcaster, or satellite radio operator) for the direct licensing of music by a copyright owner (usually the record company) be deposited with the American Federation of Musicians to be distributed to non-featured performers (background musicians), while the distribution of any fees to the featured performer be governed by the contract between the performer and record company
  • Requires that any 50% of any fees paid by a radio station for direct licensing of music be paid to the agent for collection of fees (i.e. SoundExchange) for distribution in the same manner that the statutory license fees are distributed (45% to the featured performer, 2.5% to background musicians, and 2.5% to background vocalists)

Continue Reading Broadcast Performance Royalty Battle Begins Anew – Bills Introduced in the House and Senate

On Thursday, the Obama administration appointed FCC Commissioner Michael Copps to be the Acting FCC Chairman until the administration selects its permanent Chairman, and that person is confirmed by the Senate.  As we’ve written, the rumors are that the permanent Chair will be Julius Genachowski, a former classmate of the President.  But, as far as we know (and according to the White House website’s list of appointments made so far), that appointment has not yet been formally made and sent to the Senate Commerce Committee for the initiation of hearings on the qualifications of the nominee.  Commissioner Copps is the most senior of the remaining three Commissioners (Democrat Jonathan Adelstein and Republican Robert McDowell being the other two remaining Commissioners), and has been an outspoken advocate of more stringent regulation of the public interest performance of broadcasters (see, for instance, our posts here and here).  What will his appointment as interim FCC chairman mean for broadcasters?

Initially, it would seem reasonable to assume that the Acting Chair will be principally occupied with the DTV transition, as least for the next few weeks, and perhaps longer if the pending legislation to delay the transition deadline until June 12 is adopted.  It would also seem reasonable to assume that the Commission, at least for the short term, will not be tackling major regulatory initiatives (like the localism proceeding), until the permanent FCC Chair has taken office.  One of the initial Executive Orders that was issued by the Obama administration was to freeze the actions of administrative executive agencies until the political appointments made by the administration have been confirmed and taken their places, so that the new administration is not saddled by regulations that don’t fit with its overall political agenda.  While many in DC believe that this order does not apply to an "independent agency" like the FCC (which technically does not report to the administration, but instead to Congress), it would be reasonable to assume that the spirit of the order would be followed by the FCC.Continue Reading Commissioner Michael Copps Named As Acting FCC Chairman – What Does It Mean for Broadcasters?

As we enter the waning days of this election season, where some candidates get more desperate and the attack ads get sharper, broadcasters are often faced with requests that they pull an ad created by a candidate.  Claims are made that the ad contains untrue claims about an opponent or that the ad contains copyrighted material used without permission.  What is a station to do?  When the ad is an ad purchased by a candidate or their authorized committee, and contains a "use" by the purchasing candidate (a use being a spot where the purchasing candidate’s voice or likeliness appears on the spot) the broadcaster is forbidden from censoring that ad.  Essentially, that means that the candidate can say just about anything in their ad (as long as it does not violate a Federal felony statute), and the FCC’s rules prohibit the broadcaster from refusing to air the ad based on its content.  But, because the station cannot censor the ad, it has no liability for the contents of that ad.  This is in contrast to ads by third parties (e.g. advocacy groups, unions, political parties and others not specifically authorized by the candidate), where the broadcaster theoretically has liability for the content of a political ad (see our post on that subject, here).

Two recent cases illustrate the issue.  In one, according to press reports, in a race for the sole seat in the House of Representatives representing the state of North Dakota, one candidate has claimed that the ads of the other misrepresent the positions of that candidate.  The candidate being attacked has asked that the spots be pulled from the air, while the candidate running the spots has refused to pull them.  Even if requested by the candidate being attacked, and even if the ad is in fact false, broadcasters cannot pull one candidate’s ad if that candidate wants to continue to run it.Continue Reading Broadcasters Prohibited From Censoring a Candidate’s Ad

As the Commission held its last localism hearing in Washington on Halloween night, FCC Chairman Kevin Martin’s views on how the FCC should insure that stations are responsive to their communities became somewhat clearer.  In his opening statement, the Chairman outlined a set of actions that could be taken by the FCC to insure more service to the public.  While emphasizing the importance of efforts to encourage new entrants into broadcast ownership, the Chairman’s proposals to add new regulatory requirements, including requiring that a station be manned during all hours of operation, may well have the result of making it more difficult for any new entrant (or for existing smaller operators) to profitably operate their stations.  In addition, he has offered proposals that would seemingly require cable and satellite carriage of in-state television stations not in a system’s DMA – a proposal sure to cause concern to stations in DMAs that straddle state lines.

The Chairman’s statement includes the following proposals:

  • Requirements for uniform filings by broadcasters quantifying their public service – presumably their news and information programming and the public service announcements that they provide
  • Requiring that stations have manned main studios during all hours of operations (not just during business hours)
  • Allowing flexibility for LPFM stations to be sold, but adopting new rules to insure that such stations are used for local programming, not something provided from a network or other programming source
  • Providing television viewers the ability to get an in-state television stations on cable and satellite even if the county in which they reside is "home" to a DMA with stations in another state
  • Capping the number of applications accepted from the 2003 FM translator filing window – which might result in the dismissal of hundreds of applications that have effectively been frozen for 4 years

Continue Reading Shape of Things To Come: New Public Interest Obligations, Changes in TV DMAs and More Flexibility For LPFM