This week brought the news that the Biden administration has nominated Anna Gomez for the open Democratic FCC seat that Gigi Sohn was to fill until she asked that her nomination be withdrawn in March, after a prolonged debate over her confirmation.  Gomez is experienced in government circles, having worked at NTIA (a Department of Commerce agency dealing with federal spectrum use and other communications matters) and recently at the State Department preparing for international meetings about communications issues.  She also has a history in private law firm practice.  Together with her nomination, the President renominated Commissioners Starks and Carr.  Starks’s term has already expired but he continues to serve under the allowable one year carry-over.  Carr’s term will expire at the end of this year. If all three nominees are confirmed at some point this year, the FCC would, for the first time in the Biden administration, be at full strength.  What issues would a full FCC be able to tackle?

In January, we looked ahead at some of the regulatory issues that are unresolved for broadcasters, and many remain on the table.  So let’s look at those issues again.  Perhaps the most significant issue is the resolution of the 2018 Quadrennial Review to assess the current local broadcast ownership rules and determine if they are still in the public interest.  As we wrote in December, the FCC has already started the 2022 review, as required by Congress, even though it has not resolved the issues raised in the 2018 review.  This has brought a rebuke from the NAB, which has sought a “mandamus” from the US Court of Appeals – mandamus being an order from the court telling the FCC to fulfill its statutory obligation to complete the Quadrennial Review that should have been done by the end of 2022.  Even if such an order is granted, the court will not tell the FCC how or what to decide, but only to decide the issues.  So a new FCC would have to review the open issues.  What are those issues?

For the radio industry, they include the potential relaxation of the local radio ownership rules.  As we have written, some broadcasters and the NAB have pushed the FCC to recognize that the radio industry has significantly changed since the ownership limits were adopted in the Telecommunications Act of 1996, and local radio operators need a bigger platform from which to compete with the new digital companies that compete for audience and advertising in local markets.  Other companies have been reluctant to endorse changes to the ownership rules – but even many of them recognize that relief from the ownership limits on AM stations would be appropriate.  Those positions were echoed in the comments filed in the newly started 2022 Quadrennial Review filed back in March. 

The Quadrennial Review also looks at the dual network rule that currently forbids the common ownership of two of the Top 4 TV networks.  Also under consideration is the potential for the combination of two of the Top 4 television stations in any local market.  Common ownership of such stations is only permitted now through what is essentially a waiver process.  The FCC has asked if there are specific criteria that could be adopted to evaluate those requests (e.g., a combination of the 3^rd and 4^th stations would be allowed if their market share did not exceed a specific percentage of the market – or the share of the higher rated stations in the market) so that applicants would have more certainty about whether a proposed combination would be allowed.  These issues are all fully briefed and argued to the FCC and are just awaiting an FCC decision. 

While not directly part of the Quadrennial Review process, the question of the national cap on television ownership could be a subject that a new FCC could review.  Television companies are limited from having an attributable interest in television stations reaching more than 39% of national television households.  There are several television companies that have exceeded that threshold by relying on the “UHF Discount” that counts UHF stations as reaching only half the households in their markets, a legacy from the days of analog television broadcasting, when VHF stations (those operating on Channels 13 and below) were the preferred means of transmission.  Once the conversion to digital occurred, the tables were reversed, as UHF channels are generally acknowledged to have superior transmission capabilities, an advantage that continues in the new ATSC 3.0 “Next Gen TV” transmission standard. 

Recognizing that reversal, the last Democratic Commission abolished the UHF discount (see our article here) only for that action to be reversed by the Pai administration (see our article here).  The Commission under Republican Chairman Pai questioned whether the FCC had the authority to repeal the UHF discount, as that discount had been in place when Congress enacted the 39% cap.  That administration also started a proceeding to review the national ownership cap for television companies, asking if the FCC could amend that cap on its own (or whether it needs authority from Congress) and, if the FCC has such authority, what the limits on national ownership should be.  That proceeding has never been resolved, and this new Commission has not yet been faced with a large acquisition that would for the first time put any company over the limit that would exist but for the UHF discount.  The recent TEGNA case, controversial for other reasons, did not raise this issue.  With a full Commission, this issue may well be considered. 

Also on the horizon for TV regulation are several open proceedings to look at the transition to ATSC 3.0.  One that particularly seems ripe for decision is the Further Notice of Proposed Rulemaking seeking comment on the interplay between multicast channels and the ASTC 3.0 conversion – particularly in the context of the legal responsibility for “lighthouse” ATSC 1.0 programming streams left behind on the digital multicast stream of a host station by a station that has converted to the new transmission standard.  The Pai Commission proposed to make clear that the legal responsibility for the lighthouse signal would be the responsibility of the programmer, not the host station (see our article here from an earlier stage in the proceeding discussing the issue).  While that seems like a commonsense standard, issues about cable carriage and multiple multicast streams have clouded the proceeding, and it has yet to be resolved.  Also pending is a proceeding to determine when to terminate the requirement for the duplication of programming of the primary broadcast stream on both the Next Gen and lighthouse legacy digital streams. 

Also pending is the final resolution as to whether the “Franken FMs” or “FM6 stations” – LPTV stations operating on TV channel 6 with an analog audio service that can be received on FM radios at 87.7, will be allowed to continue to operate (see our article here).

EEO issues for both radio and TV also could be considered by a full-strength FCC.  The FCC has requested comments on bringing back the annual EEO Form 395, reporting on the race and ethnicity of broadcast employees (see our article here).  A rulemaking initiated by the last Commission looking at broader reform of the EEO rules is also still outstanding and could be given further consideration (see our article here). 

Political broadcasting is always an issue.  The requirement for quicker disclosure of advertising orders placed by political candidates and issue advertisers has been brought to the foreground by the hundreds of consent decrees signed by broadcasters across the country in past two years (see our articles here and here).  Disclosure requirements about the funding of political advertising backers has also been considered in previous administrations – and could make a return in this one (see our articles here and here). Watch for other clarifications of the political broadcasting rules that could come this year in the relative lull between election years.

For radio, there are various technical proposals that are still on the table for possible consideration.  Proposals for a Class C4 FM service (here) and the limited origination of programming on FM boosters through “zonecasting” (here) are pending and could be given further consideration.  The C4 proposal is only at the Notice of Inquiry stage, so any final rules, before being adopted, would have to be put out for public comment in a Notice of Proposed Rulemaking. In contrast, the zonecasting proposal has already been the subject of a Notice of Proposed Rulemaking.  The FCC’s zonecasting proposals have been vigorously contested, opposed by many prominent broadcast companies while aggressively supported by the company that developed the system.  This proceeding could be considered by the Commission this year.  Proposals for increased power for HD subchannels for FM radio are also on the table for possible action later this year.

Enhanced public file obligations have also been proposed to obligate broadcasters to use a standard certification form for buyers of program time on a station to assess whether those buyers are acting as agents of a foreign government, with the FCC proposing that these certifications be added to the public file whether or not the programmer says that they have any connection to the foreign government (see our article here).  The FCC is also considering requiring broadcasters to certify regularly as to the steps they are taking to secure their EAS systems from hacking and other online breaches (see our articles here and here). 

These are just some of the issues that could be considered by a full-strength FCC.  As we’ve seen in the past, new issues that we have not even considered could pop up at any time.  Watch in the next few months as Congress holds hearings on the new nominations to see what other issues are raised in these confirmation proceedings.  Some have speculated that the confirmation process could be completed early this summer but, as we’ve seen with that process already during this administration, there can always be surprises, and the process can change over time.  So keep watching! 

Courtesy Broadcast Law Blog

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

• On May 17, the AM For Every Vehicle Act was introduced in both the US Senate and the House of Representatives, proposing to mandate that carmakers include AM radio, as a standard feature, in all cars sold in the United States.  The mandate would take effect after rules are issued by National Highway Traffic Safety Administration, which would be required within one year of the bill’s passage. For more details on this proposed legislation, see this article on our Broadcast Law Blog.
• The FCC released a Report and Order and Notice of Proposed Rulemaking regarding the 2023 FCC annual regulatory fees to be paid in September by broadcasters and other FCC-regulated entities.  Regulatory fees reimburse the government for the cost of operating the FCC and are allocated based on how many FCC staff employees work on matters relating to a particular industry.  The FCC tentatively concluded that certain employees whose costs had in the past been included in broadcasting’s allocation do not in fact have any role in regulating broadcasting – so their costs have been reallocated to other regulated industries.  That reallocation has resulted in a proposed decrease in the 2023 fees to be paid by broadcasters.  For example, the FCC proposes to reduce the per population fee used to set the amount TV stations owe by approximately 11.5% from last year. The FCC also included a more graduated schedule for radio fees, further reducing fees on some of the smallest radio stations.  For more on the fee proposal, see our recent article on our Blog.  Comments on the proposed fees will be due June 14, 2023, with reply comments due June 29, 2023.  Expect a final decision on the fees around Labor Day so that the fees can be paid before the October 1 start of the government’s new fiscal year. 
• The FCC’s Media Bureau released a Public Notice announcing that it was repealing the COVID-related guidance released in March 2020 that allowed broadcasters and local cable operators to offer free advertising time to advertisers and other local businesses without those spots being considered in calculating the Lowest Unit Charge accorded to candidates in “political windows,” 45 days before a primary and 60 days before a general election.  During the early days of the COVID emergency, broadcasters used free advertising schedules, not directly tied to any advertising contract, to fill gaps in their advertising schedules and to promote businesses who were still operating.  With the pandemic emergency now declared over by the federal government, the FCC believes that this specific accommodation can come to an end.  For more information on this decision, see our article here.
• The FCC reinstated the license of an FM translator in Vermont, overturning a decision of the Audio Division of the FCC’s Media Bureau which had canceled the license under Section 312(g) of the Communications Act.  That section requires automatic termination of a broadcast license if a station is silent for more than 12 consecutive months.  The decision was significant in that it accepted the licensee’s sworn statements attesting to the station’s operation within the one-year period as adequate evidence that the station had been operating within one year of going silent, even without documentary evidence of electric bills, logs, recordings, and similar items that the Audio Division’s decision had indicated was necessary.  The Commission also concluded that the translator’s operation at an apparent variance from its authorized facilities, but at its authorized transmitter site, would not subject it to automatic license cancellation under Section 312(g), distinguishing past cases where licenses were cancelled when stations resumed operations from an unauthorized transmitter site.  The Commission did direct the Bureau to consider appropriate enforcement action (e.g., a possible fine) for the licensee’s failure to seek authorization to operate at variance from its licensed facilities
• The FCC continues its enforcement actions against pirate radio operations, with the FCC’s San Francisco Office issuing a Notice of Illegal Pirate Radio Broadcasting about an unlicensed FM broadcast station in the vicinity of Wasilla, Alaska.  The FCC notified the owner of the property from which the pirate was operating that the FCC could issue a fine of up to $2,149,155 if the pirate radio broadcasting continued.  The FCC gave the property owner 10 days to respond that they are no longer permitting pirate radio broadcasting on their property, and to identify the individual(s) who were engaging in the unauthorized broadcasting. 
• The FCC’s Media Bureau and Office of Managing Director issued an Order to Pay or Show Cause why an FM station license should not be cancelled for failure to pay its 2013, 2014, and 2015 regulatory fees.  Consistent with the FCC’s prior practice, the Order gives the licensee 60 days to either submit evidence that all debts have been paid or show cause why the payment should be waived or deferred, or its license will be revoked.
• This week, the Supreme Court issued opinions on two subjects of interest to media companies. 
  • In two cases (here and here), it avoided addressing the scope of Section 230 of the Communications Decency Act, which protects online platforms from legal liability for content created by others and posted to their sites.  These two cases, seeking to hold Twitter and YouTube liable for postings by terrorist organizations, were thought to have the potential to limit the insulating effect of Section 230.  As we’ve noted on our blog (see, for instance, our articles here and here), some have called for a narrower interpretation of the liability shield afforded by Section 230.  In these decisions, the Court instead found that the claims could be rejected on other grounds, avoiding the Section 230 issue.
  • In a major copyright decision, the Court found that Andy Warhol’s prints of the late musician Prince infringed on the copyright of the photographer whose picture was the basis of the prints. The Court found that the Warhol prints were not meant as commentary or criticism of the original photograph and were not “transformative” as they were used for a commercial purpose to illustrate a magazine article about Prince in the same way that the original photograph was used.  Thus, the prints were found not to constitute “fair use.”  Look for more on this decision on our Broadcast Law Blog later this week.

Courtesy Broadcast Law Blog

This week, the FCC released a Notice of Proposed Rulemaking containing its proposal for the annual regulatory fees to be paid by broadcasters in September of this year.  The annual fees are paid by all entities that the FCC regulates to reimburse the government for the cost of FCC operations.  The FCC decides how much each industry pays based on the percentage of the FCC’s workforce which is dedicated to regulating that industry.  In recent years, there has been significant debate over the amount of fees paid by broadcasters, with broadcast interests arguing that the FCC’s allocation of its workforce overestimated the number of employees working on broadcast matters.  In the proposal released this week, the FCC appeared to agree, allocating to other industries the work done by certain employees who were at least partially counted against broadcasters in the past.  This resulted in a proposal for the total fees to be paid by broadcast interests to decrease from the $62.07 million paid in 2022 to $55.68 million for 2023. 

The Commission will take comments on the proposed allocations and come up with final numbers late in the summer.  In recent years, the final order setting the fees has been released right around the Labor Day weekend.  Fees are typically paid in mid to late September (because they must be paid before the new fiscal year begins on October 1).

The FCC’s Notice also proposes to add a new tier to radio fees, meant to lessen fees on the smallest of broadcasters.  Fees for all classes of radio stations are proposed to decrease from the amount paid last year (information about last year’s fees can be found in our article here).  The proposal for radio station fees in the Notice is set out in the table below:

Fees for television stations will continue to be based on the population covered by the station.  A table listing all of the US TV stations and their proposed fees is contained in the Notice.  TV broadcasters should review their proposed fees to make sure that there are not any errors in the FCC’s calculations.  The Notice also sets out fees for construction permits for new stations, LPTV and TV translator stations, and FM translators, as well as for non-broadcast services. Fees are paid based on the status of the station at the beginning of the current fiscal year – October 1, 2022.  Thus, for example, an operating station that only recently completed construction and was an unbuilt construction permit on October 1 will still pay the fee for a construction permit even though it is now operating.

Comments on the proposed fees and other related issues are due June 14, 2023, with replies due by June 29.  As noted above, watch for a final decision on the fees to be paid in August or very early in September.

Courtesy Broadcast Law Blog

The fear that AM radio will disappear from the car has been high on broadcasters’ lists of concerns in recent months as several car makers, including Ford, have suggested that receivers would be dropped from new models.  The issue was addressed last weekend in a front-page story in the Washington Post.  It has been highlighted by recent Congressional letters to car makers urging them to continue to include AM in cars for many reasons, including the ubiquity of the signals even in rural areas and the importance of AM for conveying emergency messages throughout the country.  Now, there is a legislative proposal to require that AM be included in cars.  Senators Edward J. Markey (D-Mass.) and Ted Cruz (R-Tex.), along with Senators Tammy Baldwin (D-Wis.), Deb Fischer (R-Neb.), Ben Ray Luján (D-N.M.), and J.D. Vance (R-Ohio), members of the Senate Commerce, Science, and Transportation Committee, and Representatives Josh Gottheimer (NJ-05), Tom Kean, Jr. (NJ-07), Rob Menendez (NJ-08), Bruce Westerman (AR-04), and Marie Gluesenkamp Perez (WA-03) introduced the AM for Every Vehicle Act, which would require that the National Highway Traffic Safety Administration conduct a rulemaking proceeding, to be completed within one year, to mandate that AM be included in all cars sold in the US as a standard feature, without any additional cost to new car buyers.  In addition, until the effective date of the new rule, before any car could be sold without an AM radio, the seller would need to have “clear and conspicuous labeling” to inform any buyer that the car does not have an AM radio. 

The bill would also require the Government Accountability Office to study whether there was any other available technology to replicate the reach and effectiveness of AM in delivering emergency alerts to the public.  Any alternative system would have to reach 90% of the population of the US.  The study would also need to review the cost of any alternative system.  The GAO would brief the appropriate Congressional committees about the study within one year and deliver the report to Congress within 180 days of the briefing, presumably to allow Congress to reassess any mandate imposed by this Act.  The FCC’s role in the process is limited.  The FCC is to coordinate with NHTSA in their rulemaking to mandate AMs in cars, and with the GAO in its study.  But it is the transportation safety issues that are driving this push to mandate AM in cars, not issues in the FCC’s jurisdiction.

Many have asked why the FCC does not mandate AM radios in all radio receivers, just as they mandated all TV receivers contain both VHF and UHF tuners.  The FCC’s authority to mandate both television bands in all TVs was specifically granted to the FCC by Congress through the All-Channel Receiver Act of 1962, when UHF stations were struggling economically because many TVs simply could not pick up their signals.  Congress has never given the FCC similar authority over radio tuners.  Thus, without explicit Congressional approval, the FCC has no jurisdiction over radio receiver manufacturers.  This bill proposes that, instead of giving the FCC a mandate to require AM in all radio receivers, to instead impose the requirement where the need is now most critical – ensuring that cars maintain AM radios.  Thus, it puts the burden on NHTSA, an agency more familiar with regulating carmakers than the FCC. 

The bill would require not only that AM radios be standard equipment in cars shipped in interstate commerce or imported after the effective date of the rules adopted by NHTSA, but also that access to AM be “conspicuous to the driver.”  The bill would allow this access either through standard AM receivers or through receivers that play content from “digital audio AM broadcast stations.”  Curiously, the definition of digital audio AM broadcast station includes stations that use the in-band, on-channel transmission system, but excludes all-digital AM stations.  This exclusion is perhaps meant to avoid any implication that a carmaker could satisfy the requirement by installing a radio only capable of picking of all-digital AM stations, which would force all AMs to go all-digital to be received.  Congress apparently does not want to force AMs to go all-digital, as that would make their signals inaccessible to those with legacy AM receivers – likely the majority today as digital AM receivers still are not the norm for most listeners.

This bill has just been introduced in Congress.  It must pass both Houses of Congress and be signed by the President before it becomes law.  Presumably, there will be committee consideration of this bill in Congress, and we will see if the carmakers raise objections to this proposal as it moves forward.  But this is clearly the first step to ensuring the long-term survival of AM radio as a service that can be accessed by the public. 

Courtesy Broadcast Law Blog

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC’s Enforcement Bureau released a Public Notice announcing that EEO Mid-Term Reviews for radio and television stations will start with review of the Annual EEO Public File Reports filed by radio stations in the District of Columbia, Maryland, West Virginia, and Virginia.  Reports for those stations are due to be uploaded to each station’s online public inspection file by June 1, 2023, the fourth anniversary of the June 1, 2019 filing deadline for those stations’ last license renewal application.  On a rolling basis through April 1, 2027, stations licensed in all other states will be subject to the Mid-Term Review on the fourth anniversary of the filing deadline for their most recent license renewal application.  In the Mid-Term Review, the FCC will review the two most recent Annual EEO Public File Reports.  Mid-Term Review is only required for radio employment units with 11 or more full-time employees.  Thus, radio stations must now indicate when they upload their annual EEO Public File Report whether their employment unit (a commonly controlled cluster of stations in the same geographic area that have at least one common employee) has 11 or more full-time employees, using a checkbox now included in the EEO folder in the online public file.  All TV stations with 5 or more full-time employees will undergo a Mid-Term review.  As only station with 5 or more full-time employees need to complete the Annual EEO Public File Report, the question about the number of employees is not necessary for TV.  The upload of the public file report by a TV station means that the mid-term review of its EEO performance is required.  See our Broadcast Law Blog article here for more on the EEO Mid-Term Review, and the new reporting requirement for radio stations.
• The FCC recently issued a Report and Order updating its Part 74 rules for LPTV and TV translator stations, to reflect their termination of analog operations as of July 13, 2021.  These rule changes, which do not materially affect the basic regulatory obligations of LPTV or TV translators now operating with digital facilities, were published in the Federal Register this week, meaning that most will be effective on June 12, 2023.  The June 12 effective date does not apply to rules that change paperwork obligations, as these changes must undergo a Paperwork Reduction Act Review and will become effective after the FCC publishes notice of the Office of Management and Budget’s approval of those changes in a subsequent Federal Register notice.  In a previous weekly update, we noted some of the changes adopted in this Order.
• The Media Bureau issued a Notice of Apparent Liability proposing a $16,000 fine for a licensee’s alleged unauthorized operation of an LPTV station in Pittsburgh.  The fine stemmed from the 2019 displacement of the station from Channel 31 to Channel 10.  Between October 2019 and March 2023, the station operated on Channel 31 with reduced power to prevent co-channel interference to a full-power TV station without Special Temporary Authority (STA) to do so.  The fine was for three and a half years of unauthorized operations as the licensee failed to request an STA to operate at reduced power on Channel 31 during the pendency of its displacement application.  Because of prior rule violations by the licensee, the FCC declined to lower the proposed fine to the base amount – which would have been $13,000 ($3,000 for the failure to file the required STA request and $10,000 for the station’s unauthorized operations). 
• The Media Bureau issued a fine in the amount of $750 to the operator of a TV translator station in Washington state for its failure to timely file an application for a “license to cover” after the station was constructed pursuant to its construction permit, and for its subsequent unauthorized operations after the station’s construction permit had expired.  As we have noted on our Blog, including in recent weekly summaries, once a station is constructed pursuant to a construction permit, the permittee must file a “license to cover” informing the FCC of the details of the completed construction (see our articles here, here, and here).  The Bureau previously proposed a forfeiture in the amount of $5,600 for this permittee’s violations but reduced the fine to $750 after the permittee demonstrated an inability to pay the higher amount. 
• The Enforcement Bureau issued a $15,000 fine to an LPFM operator in Colorado for broadcasting promotional announcements for for-profit entities in exchange for consideration.  The Bureau concluded that over a period of 3 months in 2018 alone, the permittee aired more than 1,800 commercial announcements on its LPFM station.  LPFM stations are licensed as noncommercial broadcasters who, pursuant to Section 399b of the Communications Act and certain Commission rules, cannot run paid promotional announcements for for-profit entities.  The Bureau declined to reduce the fine as the licensee did not submit sufficient evidence of an inability to pay the proposed amount.  The fine would be about 7% of the station’s annual gross revenue which, under Commission precedent, is not excessive.
• Two Congressmen wrote a letter to the Administrator of the Federal Emergency Management Agency asking FEMA to detail the harm to the EAS system that would result if AM radios are not include in automobiles.  This is part of the increasing Congressional concern over the plans of certain manufacturers to remove AM radios from new cars.  The Washington Post published a multi-page article, starting on the front page of its Sunday paper, on the issue of AM in cars, focusing on the importance of the local service provided for over a century by WTAW(AM) in Bryan-College Station, Texas.
• The FCC’s Items on Circulation list (which lists draft orders circulating among the Commissioners for approval) this week removed a recently added item titled “Review of the Commission’s Assessment and Collection of Regulatory Fees; Amendment and Collection of Regulatory Fees for Fiscal Year 2023, Report and Order and Notice of Proposed Rulemaking.”  This likely means that we will see a public release early in the coming week of the Commission’s proposal for the annual regulatory fees to be paid by broadcasters in August or September.  The annual fees are paid by all entities that the FCC regulates to reimburse the government for the cost of FCC operations.  Whether the amount of the fees allocated to broadcasters is fair has been the subject of significant debate over the last year.

Courtesy Broadcast Law Blog

Yesterday, in our article about the recent FCC random audit of the EEO performance of over 200 radio and TV stations, we noted that the FCC also reviews the EEO performance of broadcasters in connection with complaints, license renewal applications, and at the midpoint of the license period of most TV stations and larger radio operations.  The FCC’s Enforcement Bureau, in a Public Notice released yesterday, reminded us that this Mid-Term Review process is about to begin.  The FCC will be reviewing the performance of larger radio clusters in Maryland, DC, Virginia, and West Virginia, who are required to upload their Annual EEO Public Inspection File reports to their online public file by June 1.  While it is sometimes hard to believe how quickly time has passed, stations in these states are now at the mid-point of their licenses, as their last license renewal applications were filed on or before June 1, 2019. 

The FCC’s Mid-Term EEO review in the past was conducted through the filing of a Form 397 Report.  That report required that a licensee attach the last two years of EEO Public Inspection file reports and provide a contact person for EEO compliance at the station “employment unit” (a cluster of commonly controlled stations serving the same geographic area sharing at least one employee).  In 2019, the FCC did away with that report, finding that the employment reports were already available in station online public inspection files (and that the person responsible for EEO was already identified in the materials submitted with the station’s last renewal application)(see our article here).  So instead of filing a form, the FCC will simply review what is already in the public file.  But the Mid-Term review is only required for larger radio groups, which required the FCC to implement a settings update in their online public files.

Specifically, because the Mid-Term Report is only necessary for radio station employment units with 11 or more full-time employees, the FCC had to identify which stations are part of such units.  To do so, the FCC has added a “Yes/No” checkbox to the settings section in each station’s online public file’s EEO folder, in a tab called “Mid-Term Review,” where radio stations that are obligated to file annual public file reports (i.e., any station that is part of an employment unit with 5 or more full-time employees) need to let the FCC know if the is part of an employment unit that has 11 of more full-time employees, in which case the station selects “YES,” or if the station is part of any employment unit with between 5 and 10 full-time employees, in which case the station selects “NO.”  The FCC has indicated that it will not conduct mid-term reviews of radio stations that select “NO.”

In contrast, the law requiring Mid-Term Reviews mandates that all TV stations with 5 or more full-time employees must be reviewed, so the Yes/No checkbox is not required for TV.  All TV stations that are required to complete an annual public file report (those with 5 or more full-time employees) are subject to the Mid-Term Review.  TV stations, whose renewal cycle is one year later than that for radio, will be subject to Mid-Term Reviews beginning in June 2024. 

So be prepared for more EEO review coming your way if you are at a TV station or part of a larger radio cluster.  Review our summaries of the FCC requirements, and consult your own advisors for more information about compliance with all FCC obligations. 

Courtesy Broadcast Law Blog

At the end of April, we noted in our weekly summary of regulatory actions for broadcasters that the FCC had issued its first EEO audit notice for 2023 (available here), this time targeting over 200 radio and TV stations.  Those stations, and the station employment units (commonly owned stations serving the same area) with which they are associated, must provide to the FCC (by uploading the information to their online public inspection file) their last two years of EEO Annual Public File reports, as well as backing data to show that the station in fact did everything that was required under the FCC rules.  The response to the April audit is due to be uploaded to the public file of affected stations by June 8, 2023. 

While we noted the release of the audit notice, we thought that we should post our customary article describing the audit requirements and the basics of the FCC EEO rules as a reminder to all stations as to their general FCC EEO obligations.  The FCC has promised to randomly audit approximately 5% of all broadcast stations each year. As the response (and the audit letter itself) must be uploaded to the public file, it can be reviewed not only by the FCC, but also by anyone else with an internet connection anywhere, at any time.  The recent fine imposed on Cumulus Media for a late upload of a single EEO Annual Public File Report (see our article here) and the FCC’s pending consideration of the return of the EEO Form 395 reporting on the race and gender of all station employees (see our article here), shows how seriously the FCC takes EEO obligations. So, whether you are on the list or not, this is a good time for broadcasters to review what is generally required by the FCC’s EEO rules.

According to the audit notice, audited stations must provide sample copies of notices sent to employment outreach sources about each full-time vacancy at the stations, as well as documentation of the supplemental efforts that all station employment units with 5 or more full-time employees are required to perform (whether or not they had job openings in any year). These non-vacancy specific outreach efforts are designed, for example, to educate the community about broadcast employment positions and to train employees for more senior roles in broadcasting. Stations must also provide, in response to the audit, information about how they self-assessed the performance of their EEO program. Information about any pending or resolved proceedings involving discrimination claims must also be reported.  As with the last FCC audit, the FCC staff will review the audit responses and ask for additional information if they find the public file documentation to be incomplete, but they will not inform audited stations that their EEO performance was found satisfactory.

A few years ago, at the Wisconsin Association of Broadcasters annual convention, I did a presentation on the FCC requirements for EEO compliance. The slides from that presentation are available here. The FCC rules ae designed to bring new people into broadcast employment positions – looking for broadcasters to recruit from outside the traditional informal networks that exist within the broadcast industry when hiring new employees. Not only should broadcasters be reaching out to their consultants and employees for referrals, and using their own airwaves to promote openings, but they need to be using outreach sources that are designed to reach all groups within a community to notify members of these groups about the availability of open employment positions at a station. While the FCC once required that outreach be made to a plethora of community groups, it has now recognized that online recruitment sources alone can reach the entire community (see our summary of that decision here) – but these sources need to be evaluated regularly to assure that they are in fact bringing in applicants for job openings representative of different groups within the station’s employment area.  If online recruiting does not bring in a diversity of applicants and interviewees for job openings, stations should expand their recruitment sources.  Many stations find outreach to at least some community groups, in addition to online sources, brings the best mix of potential applicants to stations filling job openings.

Stations need to keep the required documentation to demonstrate their hiring efforts, as failing to do so can still lead to fines (see our article here and the Cumulus decision noted above). The documents should show not only the station’s hiring efforts in connection with job openings, but also the supplemental efforts that they have taken, even where they have not had job vacancies, to educate their community about broadcast employment and to train their employees to assume more responsibilities.  Stations should review their policies to make sure that they have the documentation necessary to satisfy an FCC audit, by making sure that the station’s EEO program is regularly bringing in recruits from diverse sources and that the station has done the required non-vacancy specific educational efforts on broadcast employment.  More general information about the FCC’s EEO requirements are found in this article, answering 5 questions about EEO posed by the Indiana Broadcasters Association. 

The FCC itself, when it abolished the requirement for the filing of the FCC Form 397 EEO Mid-Term Report, promised to review the effectiveness of its EEO rules. A Notice of Proposed Rulemaking looking at how to make the program was released in 2019, bringing in varied proposals (see our article here). The proposals made in that proceeding may require further public comment before they can be adopted and, for now, the rules that have been in place for almost two decades remain in effect. As EEO enforcement was transferred to the FCC’s Enforcement Bureau (see our article here), and as we saw many questions about EEO in the FCC’s scrutiny of license renewal applications in the recent renewal cycle, we can expect that enforcement will continue to be vigorous.

Consult with your attorneys to get a thorough understanding of the EEO rules and talk with the employees involved in employment matters at your station to make sure that they understand what they should be doing and are keeping the paperwork necessary to demonstrate your compliance with the rules. The FCC continues to enforce its rules and impose fines on stations that cannot demonstrate compliance, so make sure that you comply with the FCC’s obligations on EEO matters.

Courtesy Broadcast Law Blog

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC continues to consider its Second Notice of Proposed Rulemaking seeking comment on proposals to enhance the FCC’s requirements that each broadcaster verify that any program time sold to third parties (or any pre-produced programming received for free) does not come from a “foreign government entity,” i.e., a foreign government or one of its agents (see our articles here and here).  Among other things, the FCC’s Second Notice proposes the adoption of a detailed form that any buyer of program time on a station would need to sign so that the licensee can certify whether the buyer is or is not a “foreign governmental entity.”  NAB, in tandem with several broadcasters, recently submitted an ex parte filing highlighting the burden imposed by the detailed form which could intimidate buyers of broadcast time, especially local buyers like churches and community groups who may want to buy blocks of time.  The NAB stated that “[t]he burden of the rules falls almost entirely on broadcasters that have never aired – and will never air – foreign propaganda.” NAB thus urges the FCC to lighten this burden by clarifying that the foreign sponsorship identification diligence requirements do not apply to advertisements for commercial products and/or services of any length or format or to leases involving religious programming or locally produced and distributed programming. Also, citing the FCC’s less regulatory approach for ensuring nondiscrimination in advertising sales agreements, NAB et al. ask the FCC to “seriously consider ways to streamline substantially its regulatory approach to foreign sponsorship identification.”
• In connection with the continuing battle by Standard General to acquire TEGNA’s television stations (find previous updates on this proceeding on our Broadcast Law Blog noted here), including the FCC’s designation of the associated assignment/transfer applications for hearing before an Administrative Law Judge (ALJ), we previously reported that Senator Ted Cruz and Rep. Cathy McMorris Rodgers sent a joint letter to FCC Chairwoman Rosenworcel asking the FCC to provide detailed information about, among other things, the circumstances surrounding and the FCC’s rationale for designating the matter for hearing.  In her recent response, Chairwoman Rosenworcel stated that the FCC’s ability to share the requested information was limited because the matter was subject to pending litigation, and because the proposed transaction remains active at the FCC.  The Chairwoman also stated that “many of the questions contained in your letter are addressed in either the Hearing Designation Order issued in this case or the Commission’s Opposition to Petition for Writ of Mandamus filed recently with the Court of Appeals for the D.C. Circuit,” both of which are publicly available documents. 
• The FCC’s Media Bureau and Office of Managing Director jointly issued an Order to Pay or Show Cause initiating a proceeding to revoke an AM station’s license due to the licensee’s failure to pay delinquent FCC regulatory fees and associated interest, administrative costs, and penalties.  Specifically, the licensee had unpaid regulatory fee debts for fiscal years 2014, 2016, 2017, 2018, 2020, 2021 and 2022.  Consistent with the FCC’s prior practice, the Order gives the licensee 60 days to either submit documented evidence that all debts have been paid in full or show cause why the payment is inapplicable or should be waived or deferred.  The Order further notifies the licensee that failure to provide such evidence of payment or to show cause within the time specified may result in revocation of its license.
• The FCC issued a Public Notice requesting comment on an FM licensee’s request for an FCC ruling that would allow it to transfer control of its FM station in Cape Vincent, New York, near the Canadian border and the Ontario city of Kingston, where the new foreign ownership would be in excess of the 25% foreign ownership benchmarks set forth in Section 310(b)(4) of the Communications Act.  The requested ruling would (1) permit up to 100% aggregate foreign investment (voting and equity) in the licensee, and (2) specifically approve certain foreign investors to hold more than 5% equity and/or voting interest in the licensee.  The ruling was necessitated by a proposed transfer of 100% control of the licensee to a Delaware corporation whose sole shareholder is a Canadian corporation, which is in turn is owned by two Canadian citizens and their respective family trusts.  In total, the transaction requires the FCC to specifically approve six Canadian entities, individuals or trusts that would hold indirect ownership interests in the licensee.  Comments are due June 5, and reply comments are due June 20. On our Blog, we’ve noted other cases where the FCC has approved 100% foreign ownership of US broadcast stations (see, for instance, our articles here and here).

Courtesy Broadcast Law Blog

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC’s Enforcement Bureau issued the first of its Equal Employment Opportunity (EEO) audit letters for 2023 to randomly selected radio and television stations. Each year, approximately five percent of all radio and television stations are selected for EEO audits. A list of the radio and television stations included in this audit as well as the text of the April 24, 2023 audit letter is available here and at the Enforcement Bureau’s EEO headline page on the FCC website at: https://www.fcc.gov/enforcement/eb-eeo/equal-employment-opportunity-headlines.  The deadline for the selected stations to upload responses to their FCC-hosted online public inspection file is June 8, 2023.
• The NAB filed a petition with the US Court of Appeals for a “writ of mandamus” to force the FCC to resolve its 2018 Quadrennial Review.  As we wrote on our Broadcast Law Blog, the FCC started its 2022 Quadrennial Review in December despite not having concluded its 2018 review.  The 2018 Review addresses issues including whether to relax the local radio ownership rules, whether to provide specific guidance as to when one entity can acquire two TV stations in the same market (rather than the ad hoc waiver standard currently in effect), and whether to abolish the rule that prohibits an ownership combination of any two of the Top 4 TV networks. Even if successful, the Court’s mandamus order likely would not require that the FCC reach a particular decision in the 2018 review.  Instead, an order would just require that the Commission reach a conclusion in the proceeding. 
• The Enforcement Bureau issued sixteen warnings to New York City and New Jersey landowners for allegedly allowing pirate radio broadcasts from their properties.  These Notices of Illegal Pirate Radio Broadcasting (available here) target properties identified by Bureau field agents as sources of pirate radio transmissions during the Bureau’s 2022-2023 New York Pirate Sweeps. Under the PIRATE Act adopted in 2020, the FCC must conduct an annual sweep looking for offenders in the top 5 most active markets for pirate radio.  The Notices formally notify landowners of the illegal broadcasting activity purportedly occurring on their property; inform them of their potential liability of over $2 million for permitting such activity to occur on their properties; demand proof that the illegal broadcasting has ceased; and request identification of the individual(s) engaged in the illegal broadcasting.
• The FCC will consider at its May 18 monthly open meeting its 2022 Notice of Inquiry that explores opportunities to open the 12.7-13.25 GHz (12.7 GHz) band for next-generation wireless services. This week, the FCC released a draft of the Notice of Proposed Rulemaking and Order stemming from the Inquiry to be considered at that May 18 meeting.  Licensed services currently in the 12.7 GHz band whose operations could be affected include satellite communications and mobile TV pickup operations (for more background, see our articles here and here).  The FCC’s draft would formally propose and seek comment on rules that would authorize mobile broadband and other expanded uses in some or all of the 550 MHz of spectrum in the 12.7 GHz band.  If the NPRM is adopted as drafted, it would, among other things, propose to grandfather, relocate, and/or repack incumbent non-federal licensees in the 12.7 GHz band.  In addition, the Order would direct fixed and mobile Broadcast Auxiliary Service (BAS) licensees in the 12.7 GHz band to certify the accuracy of all information reflected on each license, including whether the facilities are operating as authorized.
• The Media Bureau rejected one of two mutually exclusive applications for a construction permit for a new NCE FM station at Ketchum, Idaho, and granted the surviving application.  The applications were filed during the November 2021 NCE FM filing window.  Last year, the Bureau identified numerous defects in one application and offered the applicant 30 days to submit a corrective filing.  In response, the applicant revised its application to specify new coordinates for the proposed station’s transmitter.  The Bureau found the amendment was unacceptable because it was a major amendment (since its revised 60 dBu contour did not overlap the 60 dBu contour in its original application) and created additional overlap with the other application with which it was already in conflict.  Because the applicant did not remedy all the deficiencies in its application with the sole opportunity to file a corrective amendment that the FCC allows mutually exclusive applicants, the FCC dismissed that application. The opposing application thus became a “singleton,” and the Bureau granted it.
  • In a similar case, the Media Bureau affirmed the grant of an application for a new NCE FM construction permit at Central Gardens, Texas and dismissed three mutually exclusive applications.  In so doing, the Bureau found that even after recalculating the coverage area proposed by each applicant, none of the applicants were eligible for points under “the best technical proposal” criterion because no applicant proposed to serve at least 10% more area and population than the next best proposal, as required to gain such a preference.  The decision on other comparative criteria was thus upheld.
• We have been reporting on the continuing battle by Standard General to acquire TEGNA’s television stations (find previous updates on this proceeding on our Broadcast Law Blog noted here), including the FCC’s designation of the associated assignment/transfer applications for hearing before an Administrative Law Judge (ALJ).  That hearing (which has proceeded while Standard simultaneously pursued relief, thus far unsuccessfully, in court and before the full FCC) took a turn on April 27 when the ALJ issued an order suspending the hearing, finding that the hearing required discovery that, along with resolving the parties’ access to confidential information, would extend the proceeding well beyond Standard’s May 22, 2023 deadline for action.  Thus, rather than requiring the parties to spend time and resources on a potentially moot proceeding, the ALJ suspended the hearing.  If Standard finds a way to keep the transactions alive past May 22, then, presumably, the ALJ will resume the hearing.  The ALJ ordered Standard/TEGNA to file a status report on or before June 1, 2023, to update the record.  In the interim, various Congressional leaders and interest groups have weighed in (see the NAB blog here), urging the FCC to act on the application before the May 22 deadline rather than requiring the hearing. 
• Shifting to must-carry issues, the Media Bureau denied a market modification petition filed by a commercial television station licensed to Fort Bragg, CA.  Market modification is the statutory process by which, as in this case, a commercial television station may seek to add communities to its DMA and thereby expand the zone where it may assert must-carry rights.  Fort Bragg is in the San Francisco-Oakland-San Jose, CA DMA, and the station sought in its petition to add Santa Rosa, CA to that DMA so it could compel the cable operator there to carry it.  After reviewing the petition according to the statutory market modification criteria and reviewing the evidence required under the FCC’s market modification rules, the Bureau denied the petition, weighing factors including that (i) the station’s historic carriage by other MVPDs in Santa Rosa only entitled it to a slight preference; (ii) Fort Bragg is 110 road miles from Santa Rosa; (iii) the station’s 41 dBu noise limited service contour did not reach Santa Rosa, and the station’s translator coverage cannot compensate for this in a market modification case; (iv) the station had failed to demonstrate meaningful economic connections between Fort Bragg and Santa Rosa; and (v) the station’s local programming was not sufficient enough to qualify as “coverage or other local service” to Santa Rosa.
• The Media Bureau entered into a consent decree with an AM station to resolve the station’s repeated failure to timely place records in its online public inspection file.  The consent decree requires the station to adopt a public file compliance plan but does not impose a fine.

On our Broadcast Law Blog, this week we published our monthly look ahead to the regulatory dates of importance to broadcasters in May and early June. 

Courtesy Broadcast Law Blog