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With the extension of the DTV transition deadline now passed by Congress, it’s the FCC’s turn to implement the extension and set the way in which television stations will deal with the new June 12 date for the termination of analog television.  To start to implement that extension, the FCC today issued a public notice setting out the procedures to be followed by stations in dealing with the new deadline.  The Public Notice allows stations that want to do so to go ahead and terminate their digital service on February 17 despite the extension, but they must file with the FCC a notice of that election by midnight on Monday, February 9.  The Notice also sets out the requirement for these stations to run a significant number of announcements between now and February 17, including an increasing number of crawls in the final week before the termination date, all to tell viewers that these stations really will be turning off their analog signals on February 17 as they have been saying that they will for the last few years.

If stations do not turn off their signals on February 17, they must keep operating in analog until at least March 14, and can only terminate after giving the FCC at least 30 days prior notice.  Education efforts about the new deadline date will also need to continue through the new deadline, and will need to be amended to reflect that deadline.  A Davis Wright Tremaine Advisory on these requirements will be published soon – but the Public Notice provides much of the necessary information that stations need to know right now.Continue Reading FCC Issues Instructions for Stations to Deal With the Extension of the DTV Conversion Deadline

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

While it seems like we just finished the election season, it seems like there is always an election somewhere.  We are still getting calls about municipal and other state and local elections that are underway.  And broadcasters need to remember that these elections, like the Federal elections that we’ve just been through, are subject to the FCC’s equal time (or "equal opportunities") rule.  The requirement that lowest unit rates be applied in the 45 days before a primary and 60 days before a general election also apply to these elections.  "Reasonable access," however, does not apply to state and local candidates – meaning that stations can refuse to take advertising for state and local elections (unlike for Federal elections where candidates must be given the right to buy spots in all classes and dayparts on a station), as long as all candidates for the same office are treated in the same way. So stations can take ads for State Senate candidates, and refuse to take ads for city council, or restrict those ads to overnight hours, as long as all candidates who are running against each other are treated in the same way.

One issue that arises surprisingly often is the issue of the station employee who runs for local office.  An employee who appears on the air, and who decides to become a candidate for public office, will give rise to a station obligation to give equal opportunities to other candidates for that same office – free time equal to the amount of time that the employee’s recognizable voice or likeness appeared on the air.  While a station can take the employee off the air to avoid obligations for equal opportunities, there are other options for a station.  See our post here on some of those options.Continue Reading Reminder: Equal Time and Lowest Unit Rate Rules Apply to State and Municipal Elections

Since the election of President Obama and the Democratic majority in both houses of Congress, the fears of the return of the Fairness Doctrine have been highlighted on talk radio, online, by emails and in conversations throughout the broadcast industry.  Even though President Obama had stated that he was not in favor of its return, and even liberal commentators have gone so far as to make fun of conservatives for suggesting that there might be an attempt to bring it back (see our post on Keith Olbermann lambasting George Will for making such a suggestion).  Yet this week the doctrine was back into the national discussion, coming up in a press conference with White House Press Secretary Robert Gibbs (who joked it off without dismissing the rumors) and in a speech by FCC Commissioner Robert McDowell.  What’s all the fuss about anyway?

To really understand the debate, it’s important to understand what the Fairness Doctrine is and what it is not.  We’ve seen many politicians referring to the Fairness Doctrine and the Equal Time Rule in the same sentence, as if they are part and parcel of the same thing. In fact, they are different issues.  Essentially, the Fairness Doctrine simply required that stations provide balanced coverage of controversial issues of public importance.  The Fairness Doctrine never required "equal time" in the sense of strict equality for each side of an issue on a minute for minute basis.  In talk programs and news coverage, a station just had to make sure that both points of view were presented in such a way that the listener would get exposure to them.  How that was done was in a station’s discretion, and the FCC intervened in only the most egregious cases.Continue Reading Fairness Doctrine Back in the News (Part 1) – What’s It all About?

In these challenging economic times, it seems like almost every day we see a notice that a broadcast station has gone silent while the owner evaluates what to do with the facility.  This seems particularly common among AM stations – many of which have significant operating costs and, in recent times, often minimal revenues.  The DTV transition deadline (whenever that may be) may also result in a number of TV stations that don’t finish their DTV buildout in time being forced to go dark.  While these times may call for these economic measures to cut costs to preserve the operations of other stations that are bringing in revenue, broadcasters must remember that there are specific steps that must be taken at the FCC to avoid fines or other problems down the road.

One of the first issues to be addressed is the requirement that the FCC be informed of the fact that a station has gone silent.  Once a station has ceased operations for 10 days, a notice must be filed with the the FCC providing notification that the station is not operational.  If the station remains silent for 30 days, specific permission, in the form of a request for Special Temporary Authority to remain silent, must be sought from the FCC.  The rules refer to reasons beyond the control of the licensee as providing justification for the station being off the air.   Traditionally, the FCC has wanted a licensee to demonstrate that there has been a technical issue that has kept the station off the air.  The Commission was reluctant to accept financial concerns as providing justification for the station being silent – especially if there was no clear plan to sell the station or to promptly return it to the air.  Perhaps the current economic climate may cause the FCC to be more understanding – at least for some period of time.Continue Reading Steps to Take When A Broadcast Station Goes Silent

Last week, the FCC issued several fines to noncommercial broadcasters who had underwriting announcements that sounded too commercial.  In these decisions, the Commission found that the stations had broadcast promotional announcements for commercial businesses – and those announcements did not conform to the FCC’s rules requiring that announcements acknowledging contributions to noncommercial stations cannot contain qualitative claims about the sponsor, nor can they contain "calls to action" suggesting that listeners patronize the sponsor.  These cases also raised an interesting issue in that the promotional announcements that exceeded FCC limits were not in programming produced by the station, but instead in programs produced by outside parties who received the compensation that led to the announcement.  The FCC found that there was liability for the spots that were too promotional even though the station itself had received no compensation for the airing of that spot.

The rules for underwriting announcements on noncommercial stations (including Low Power FM stations) limit these announcements to ones that identify sponsors, but do not overtly promote their businesses.   Underwriting announcements can identify the sponsor, say what the business of the sponsor is, and give a location (seemingly including a website address).  But the announcements cannot do anything that would specifically encourage patronage of the sponsor’s business.  They cannot contain a "call to action" (e.g. they cannot say "visit Joe’s hardware on Main Street" or "Call Mary’s Insurance Company today").  They cannot contain any qualitative statements about the sponsors products or services (e.g. they cannot say "delicious food", "the best service", or "a friendly and knowledgeable staff" ).  The underwriting announcements cannot contain price information about products sold by a sponsor.  In one of the cases decided this week, the Commission also stated that the announcements cannot be too long, as that in and of itself makes the spot seem overly promotional and was more than was necessary to identify the sponsor and the business that the sponsor was in.  The spot that was criticized was approximately 60 seconds in length. Continue Reading FCC Fines for Noncommercial Stations Having Underwriting Announcements That Were Too Commercial – Even Where the Station Received No Money

This week, an agreement by Republican Senator Kay Bailey Hutchison, the ranking minority member on the Senate Commerce Committee, to an extension of the DTV transition deadline from February 17 until June 12, was announced.  The delay has been requested so that issues about the distribution of the $40 government coupons to consumers to ease their purchase of converters to allow analog TVs to pick up digital signals so that they will continue to work after the transition date can be resolved; and so that there can be more targeted information about the transition delivered to groups that many feel may not have received the message about the transition. But Congressional Republicans have thus far blocked attempts by the Obama administration to delay the transition, so this agreement by Senator Hutchinson is viewed as a sign that the extension may very well be approved in the near term.  As the transition deadline is only weeks away, if Congress is going to act, it needs to do so immediately, or the effect of any delay will be negligible as the transition will have, for all practical purposes, already occurred.

Most broadcast stations have made plans for the transition – ordering the equipment, scheduling tower crews, coordinating the changes in frequencies with other stations in the same region that may be necessary to accommodate the digital operations.  In some cases, stations have already ceasing their analog broadcasting so that the new equipment necessary to accomplish the transition can be installed, or because these stations will be operating digitally on their analog frequency and have had to allow a tower crew or other engineering support to conduct the work necessary to allow the digital operations on the final channel to occur before the February deadline dates.  Given the limited number of such crews, not all of these final changes could happen on a single date, so stations have been changing to all digital operations now as the final date approaches.  Without Congressional action very soon, the transition will have, for the most part, already occurred.Continue Reading Senator Hutchison Announces Compromise on DTV Transition Delay Until June 12 – Why Congress Needs to Act Soon

The FCC this week released the details of its "White Spaces" decision, authorizing the use of both fixed and mobile unlicensed devices within the television spectrum.  In theory, these devices are supposed to be able to sense the existence of television signals so that they can operate on other frequencies and avoid creating interference.  However, as an extra safety measure, the FCC has also required that these devices connect at least once a day with a database of all other protected users of the television spectrum and, by used of geo-location technology, determine what other users are in the area where the "TVBD" (television band device) is being used and operate on frequencies which protect those other users.  Our firm has prepared a memo outlining the full decision.  The Davis Wright Tremaine memo can be found here.  When one reviews the full text of the FCC decision, it becomes pretty clear that we should not look for such devices anytime soon.

While the Commission’s order actually discussed in some detail the question of whether these devices should be permitted to operate before the end of the digital television conversion in February 2009, given the issues that still need to be resolved, this discussion really appears to be an academic one.  First, devices that meet all of the FCC requirements have to be designed and built, and type-accepted by the FCC labs.  In a recent article by Shelly Palmer in his well regarded blog on television issues, he suggests that many engineers are convinced that these devices simply will not work.  When one reviews the FCC requirements, one can see why that might be the case.Continue Reading Details of White Spaces Decision Released – Don’t Look for Them Soon as There is Lots to Do Before Any Devices Will Be Introduced