Global Music Rights, the relatively new performing rights organization that signed a number of composers of popular songs away from ASCAP and BMI in order to seek higher music royalties for the public performance of their works on radio stations and other media platforms (see our articles here and here), lost one round in its litigation with the Radio Music License Committee in RMLC’s attempt to bring GMR under some sort of rate review under the antitrust laws. RMLC has alleged that GMR, by combining multiple artists in a single essentially take-it-or-leave-it package, is able to charge rates well above what any artists could receive on its own, thus violating the antitrust laws (see our articles here and here). This is a theory like the one which lead to an arbitration with SESAC dramatically lowering royalty rates the radio industry pays to that organization (see our articles here and here). In a decision released Friday, the Judge presiding over RMLC’s case rejected GMR’s arguments that the suit should be dismissed without a trial. The Judge, in a short three-page opinion, said that viewed in their most favorable light to RMLC (which is the standard used in deciding on such motions), the facts alleged by RMLC were enough to support the claims it made in the lawsuit, so the case will go to trial.
But this is not necessarily a great victory, as the Judge notes that it remains to be seen whether, when the full facts are introduced at the trial and challenged by GMR, these facts will in fact be enough to sustain the claims of RMLC. A similar finding was made in GMR’s countersuit – arguing that RMLC formed an illegal buyer’s cartel in violation of the antitrust laws by trying to negotiate royalty rates for most commercial radio operators (see our article here on that countersuit). The Court rejected RMLC’s argument that the GMR suit should be dismissed, finding that there were enough facts raised to potentially support GMR’s claims, though also warning that it remained to be seen if, once the facts were presented and challenged at trial, whether they indeed would sustain GMR’s claims.
So the litigation continues. As we have written before, the suit, unless settled, could take years to resolve. Perhaps these decisions give both sides more reasons to think about a settlement as they know that they are looking at significant legal fees if the case goes to trial, with likely years of appeals after that. Moreover, the Judge’s opinions show that both parties have significant stakes in any adverse decision – a finding that GMR’s structure violated antitrust law could be used as precedent by other music services to challenge the rates that it is imposing on them, while a finding against RMLC could undermine its negotiations on behalf of the radio industry on other music rights issues (though its position has never been found to be an issue in other cases where it has represented the commercial radio industry). Once again, we will need to watch as this case slowly develops as trial preparation moves forward.
Courtesy Broadcast Law Blog
The FCC yesterday released another of its regular EEO audit notices (available here), asking that approximately 240 radio stations and about 80 TV stations, and the station employment units (commonly owned stations serving the same area) with which they are associated, provide to the FCC (by posting the information in their online public inspection file) their last two year’s 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. Audited stations must provide 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 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. Stations that are listed in the audit notice have until March 23, 2020 to upload this information into their online public file.
The FCC has promised to randomly audit 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 license renewal cycle which began last year adds to the importance of this audit, as a broadcaster does not want a recent compliance issue to headline the record the FCC will be reviewing with its license renewal (see our article here about the license renewal cycle). So, whether you are on the list or not, this is a good time for broadcasters to review what is required by the FCC’s EEO rules.
Last summer, 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 were designed to bring new people into broadcast employment positions – looking for broadcasters to recruit from outside the traditional broadcast networks 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 used to require 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 from throughout a station’s employment area.
Stations need to keep the required documentation to demonstrate their hiring efforts, as the failure to have those documents can still lead to fines (see our article here). 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 to meet an FCC audit to make 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.
The FCC itself, when it abolished 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 last year, bringing in some interesting proposals (see our article here). The proposals made in that proceeding are likely going to require further public comment before they can be adopted so, for now, the rules as they are remain in effect. As EEO enforcement was last year transferred to the FCC’s Enforcement Bureau (see our article here), we can expect that enforcement will 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
One presidential caucus down, 49 (primaries and caucuses, plus a few more in the territories) to go in the next four months – with primaries for Congressional, state and local offices stretching out through August. This presidential primary race has already seen unprecedented amounts of advertising on local stations, including through network advertising buys. Based on campaign announcements made in recent days, the advertising is likely to only increase as we move to the Super Tuesday states. As the Democratic party nomination race heats up, broadcasters are likely to continue to see a flood of political buys, as candidates, PACs and other groups try to get the last word before the voters go to the polls. Here are four issues that broadcasters should be considering in this active, condensed broadcast season:
Only nine more months and political season will be over, when your station can go back to simply dealing with its normal commercial advertisers. Until then, you need to deal with all of these issues. More on political advertising can be found in our Guide to Political Broadcasting, here, and in the slides that I recently used in a webinar on political broadcasting issues that I did last week for broadcasters in 4 states (available here). Remember, none of this guidance is definitive, as facts are really important in assessing any legal issue – especially in the political broadcasting context. But these guides can help to identify the issues that you should be considering. For now, be prepared for the onslaught of political advertising issues, and have your communications lawyer’s phone number on speed dial!
Courtesy Broadcast Law Blog
BMI and the Radio Music License Committee announced a settlement of their rate court litigation over the royalties that commercial radio will pay for the public performance of musical compositions licensed by BMI. While we have not yet seen the agreement, the press release already raises one issue likely to sew confusion in the broadcast industry – the extent to which the agreement allows the use of music in podcasts. While the press release says that the BMI license includes the use of music in podcasts, radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders. They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.
So why doesn’t the license from BMI fully cover the use of music in a podcast? As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?
The public performance right is simply that – the right to perform a copyrighted work to the public (those beyond your circle of family and friends). Making a copy of a copyrighted work is a different right, as is the distribution of that recording. Both are triggered when the podcast is downloaded onto a phone or other digital device – the manner in which podcasts were initially made available to the public. As we have written before (see, for instance, here and here), by convention (and now by the provisions of the Music Modernization Act), making available music for on-demand streaming (where a listener can choose a particular song, or a set of songs that will play in the same order all the time) has come to be considered to involve the rights of reproduction and distribution even if a download does not occur (the “mechanical royalties” covered by the MMA – see our articles here and here on the MMA). Thus, as podcasts – even when streamed – are made available on demand, the rights to the reproduction and distribution of the words and music of a song must be obtained. These rights are obtained not from any of the organizations mentioned above, but usually for a production like a podcast, directly from the copyright holder – usually the publishing company with which the songwriter is affiliated (or the publishing companies in some cases where multiple songwriters have co-written a song and reserved rights to approve uses of the song in productions like podcasts – see our article here).
The right to make a derivative work is another right of the copyright holder (see my article here on derivative works). A copyright owner must give his or her permission before their work is modified in some way. While that can involve the changing of lyrics to a song, it can also involve associating that song in some permanent way with other content. In the video world, that is referred to as a synch right – where the audio is “synched” to the video creating a single audiovisual work. Synch rights are not specifically defined by the Copyright Act. They have traditionally referred to audiovisual productions, but the same concept is at play in the creation of a podcast, where the music is synched in a permanent fashion to other audio content to create the podcast. In a recent complaint by Universal Music against a podcaster, Universal complains that the podcaster violated not just the public performance rights of the copyright holders, but also their rights to authorize the reproduction, distribution, and the derivative works made from their copyrighted material (see our article here on that suit).
In addition, even if these rights are cleared, these rights only cover the underlying musical work or musical composition – the words and music in the song. There are an entirely different set of rights necessary to use the recording of a song from a band or singer in a podcast. The rights to the “sound recording” or “master recording” also need to be obtained for any on-demand use of music. SoundExchange covers digital public performances of the sound recording, but only when provided in a noninteractive setting where the user cannot determine what song will be heard next (see our articles here, here and here for more on the difference between interactive and noninteractive digital uses). The rights to use the master recording in a podcast, as the podcast is available on demand, need to come from the copyright holder of that master – usually the record label (but sometimes the artist) for most popular music.
This is all a long way of saying that podcasters need to get permission for the use of music in their productions. Many podcasters have commissioned original works where they license from local artists the recordings of music written and performed by those artists. Some online services have recently begun to develop, where they clear all the rights to music and license that music to podcasters for set fees. But, thus far, most of that music is not major label releases, but instead independent music. There are some indications that might change in the near term. But right now, for major label releases, you generally need to get permission directly from the copyright holders to use their music in a podcast. The bottom line – don’t use music in podcasts without getting permission.
Courtesy Broadcast Law Blog
Did you know that the FCC has a rule that requires that a broadcaster notify its audience that a program has been pre-recorded when the program “creates the impression” that it is live? Probably many broadcasters had forgotten about that rule (if they ever knew it existed). This week the FCC’s Enforcement Bureau entered into a Consent Decree with Salem Media Group, in which Salem agreed to pay a $50,000 penalty and set up a monitoring and compliance plan for 3 years, after admitting that it violated this FCC rule. The Enforcement Bureau specifically states that the action “will send a signal to the industry that the Commission remains vigilant in its duty to ensure that licensees adhere to the live broadcasting rule.” Consider yourself warned!
Section 73.1208 of the FCC’s rules requires broadcast stations to disclose to their audience that program material is prerecorded when “time is of special significance, or . . . [when] an affirmative attempt is made to create the impression that [the program material] is occurring simultaneously with the broadcast.” The program that led to the Enforcement Bureau action was called HealthLine Live, airing on Saturdays on over 20 Salem stations. The FCC, in its initial investigatory letter to Salem station KRLA(AM), the originating station (a letter available, as of the date of this article in the station’s public file), noted that because the word “Live” was in the title of the program, and because the program featured listener calls, the program gave the impression that it was being broadcast live. Reviewing the transcripts of the program provided by the licensee, it certainly seemed to convey the impression that the program was a live discussion of health issues.
The FCC began its investigation as a listener complained to the FCC that the program could not be live as the host had died before the program was broadcast. The program apparently continued to run for several months between the date that the listener stated that they originally heard the program after the host’s death and the date that the listener filed the complaint with the FCC.
In response to the FCC’s investigatory letter, the licensee admitted that the program was in fact prerecorded, and that the host was indeed dead. Because of the number of stations that broadcast the program, and the fact that only a handful of those stations mentioned to their listeners that the program was prerecorded, the FCC determined that a significant penalty was appropriate.
The rule requires that broadcasters notify their audience when a seemingly live program has in fact been prerecorded. That notification must come at the beginning of the program and be clear and understandable to the audience. On TV, the rule states that the notice can be given either visually or aurally. Commercials, promos and PSAs are exempt from the requirement.
With the warning provided by this case, broadcasters need to make sure to review all of their programming to be sure that they are not airing programs, or segments of programs (including any network programs), that appear to be live but are in fact not live, without providing notice to their listeners or viewers. Don’t re-run a talk show when the host is on vacation without mentioning that the program was recorded at an earlier date. Don’t include pre-taped phone calls in a program without providing notice that the calls have been prerecorded. If you include some live and some prerecorded calls in a program, disclose at the beginning of the program that portions of the program have been prerecorded. With the explicit warning that the FCC has provided in this Consent Decree, broadcasters need to be vigilant to avoid problems that can result in a costly lesson.
Courtesy Broadcast Law Blog
Most years, at some point in January, we look into our crystal ball and try to see some of the legal and regulatory issues likely to face broadcasters. We already provided a calendar of the routine regulatory filings that are due this year (see our Broadcaster’s Regulatory Calendar). But not on that calendar are the policy issues that will affect the regulatory landscape in the coming year, and into the future. This year, the biggest issue will no doubt be the November election. Obviously, broadcasters must deal with the many day-to-day issues that arise in an election year including the rates to be charged political candidates, the access to airtime afforded to those candidates, and the challenges associated with the content of issue advertising that non-candidate groups seek to transmit to the public. The election in November will also result in a President being inaugurated in just less than a year – which could signal a continuation of the current policies at the FCC or potentially send the Commission in a far different direction. With the time that the election campaigns will demand from Congress, and its current attention to the impeachment, Congress is unlikely to have time to tackle much broadcast legislation this year.
The broadcast performance royalty is one of those issues likely on hold this year. While it was recently re-introduced in Congress (see our article here), it is a struggle for any copyright legislation to get through Congress and, in a year like the upcoming one, moving a bill like the controversial performance royalty likely will likely not be high on the priorities of Congressional leaders. This issue will not go away – it will be back in future Congresses – so broadcasters still need to consider a long-term strategy to deal with the issue (see, for instance, our article here on one such strategy that also helps resolve some of the music royalty issues we mention later in this article).
At the FCC, one would think that political broadcasting issues, like the reconsideration request we wrote about here seeking changes in the FCC’s recent controversial decisions on the disclosure of all issues and candidates in every non-candidate ad, would be high on the list of issues to be considered. But political issues are also complex – October’s decision on issue ad disclosures took almost 3 years to be released, after a prior Media Bureau decision on the same issues was rescinded in early 2017. Thus, it would not be at all surprising if these issues don’t get resolved this year.
Many people expected that we would see ownership reform in 2020– especially for radio. Last year, the FCC started its Quadrennial Review to look at these issues. But the September decision of the Third Circuit (see our articles here, here and here), overturning changes made in 2017, may have clouded the potential for any changes in the ownership rules this year. These issues can be controversial in an election year. But we have in the past seen FCC ownership decisions in the lame-duck period after an election but before a Presidential inauguration, so stay alert to what happens in this area.
In the interim, license renewal applications will trudge on, with TV starting to file their renewals in June of this year (starting with stations in Maryland, DC, Virginia, and West Virginia). So far, the FCC has been judicious in issuing fines for public file violations disclosed in a license renewal application, only fining those stations who totally ignored their obligations (see our stories here and here). We are waiting for the FCC’s patience to end – and would not be surprised to see the FCC become stricter in policing these issues in the future.
What other issues have we seen the FCC take comments on but not yet resolve? EEO was one area that generated lots of comments earlier in 2019 (see, for instance, our article here). But, with the FCC’s rulemaking notice being so general in its questions, and many of the proposals made in the proceeding so specific, if anything happens out of the proceeding, the most likely action would seem to be a further notice of a proposed rulemaking to give parties notice of any specific proposals the FCC wants to pursue.
For television, ATSC 3.0 looks to become a reality this year as stations begin to roll out the new technology and ATSC 3.0-compatible television receivers become available at consumer electronics stores. On the regulatory front, the FCC still has some issues to resolve, including dealing with stations that cannot find a partner station to provide a “lighthouse signal” in the current digital technology when they are ready to convert to the new standard. The TV band will also shrink, as the repacking following the incentive auction concludes in July – with all TV stations moved into the channels below 37.
The oldest of the broadcasting services, AM, will also possibly be looking at its own digital conversion – though the FCC will have to move very fast to get it done this year. The proposal to allow AM stations to convert to full digital operations has been formally advanced through a notice of proposed rulemaking, with comments due March 9 and replies on April 6 (see our articles here and here). The issues seem relatively simple, and for a voluntary conversion, relatively noncontroversial. A decision before the end of the year is possible, though such quick action would require everything to fall into place just right.
Some of the biggest issues for broadcasters may come not from the FCC, but from other agencies or courts. As we wrote here and here, the Department of Justice is considering changes to the antitrust consent decrees that govern ASCAP and BMI. Should the DOJ review reach a conclusion and suggest a radical restructuring or abolition of the current system, Congress would almost assuredly have to step in to take action. We’ll be watching closely to see if any action comes from the DOJ this year.
BMI is currently in rate court litigation with the Radio Music License Committee over the rates that radio stations should pay for the use of BMI music. That proceeding could result in higher fees for radio broadcasters. SESAC’s three-year license with the radio industry (see our article here) has also expired, meaning that if no new rates can voluntarily be arrived at, their rates will be decided by an arbitration panel. SESAC has added some new songwriters (including Adele), so you can be sure that they will want more money from the radio industry. And, of course, the litigation with GMR goes on, though it may not be concluded this year.
What will be concluded before the end of the year is the new rates that webcasters (including broadcasters who stream their audio signal on the Internet) will pay SoundExchange for the right to publicly perform sound recordings on a digital platform for the period from 2021 through 2025. The Copyright Royalty Board is currently considering proposals from music services and SoundExchange for new rates – SoundExchange looking for a significant increase while the services are looking for a decrease. A trial is scheduled for March, with a decision required by law before the end of the year.
With the election coming in November, the prospects for other “big” issues being tackled this year seem to be less than in most years. We have noted (see, for instance, or articles here and here), that the FCC has been very active in enforcing the rules that it does have – which may be a safe political course for it to pursue but one fraught with potential dangers for broadcasters and other regulated entities. But each year issues come up that surprise us, so watch the FCC releases, the trade press, this blog and others like it, and be ready for whatever regulatory issues may come your way in 2020.
Courtesy Broadcast Law Blog
With the holiday season getting smaller in the rear-view mirror and many parts of the country dealing with ice, snow, and single-digit temperatures, broadcasters could be forgiven for dreaming about the sunshine and warmth that come with spring. Before spring arrives, however, broadcasters need to tend to important regulatory matters in February. And, if you find yourself eager to plan past February, use our 2020 Broadcasters’ Calendar as a reference tool for tracking regulatory dates through the end of 2020.
But focusing on the month ahead, by February 3, all AM, FM, LPFM, and FM translator stations in Arkansas, Louisiana, and Mississippi must file their license renewal applications. For the full-power stations in the state, there’s an additional EEO task to complete irrespective of how many employees a station employment unit (SEU) has. Before filing for license renewal, stations in these three states must submit FCC Schedule 396. This schedule is the Broadcast Equal Employment Opportunity Program Report, which is a reporting to the FCC of the SEU’s equal employment opportunity activities for the last license period (SEUs with fewer than five full-time employees are not required to maintain an EEO recruitment program and are only required to check a box that they have fewer than 5 full-time employees and skip ahead to the certification). The sequencing here is important: When filing for license renewal, the application (Schedule 303-S) asks for the file number of your already-filed Schedule 396. So, without having already filed the schedule, you won’t be able to complete your renewal application.
Beginning February 1, stations filing renewals must begin airing a series of six post-filing announcements (one announcement each on February 1, February 16, March 1, March 16, April 1, and April 16). Stations in Alabama and Georgia that filed earlier in the renewal cycle air their fifth post-filing announcement on February 1 and their sixth and final announcement on February 16. These stations must then place in their online public file certifications of air times and dates for all the pre- and post-filing announcements they ran.
Full-power AM, FM, LPFM, and FM translator stations in Indiana, Kentucky, and Tennessee are due to file license renewal applications by April 1, but, before that, those stations must air a series of announcements alerting listeners to their upcoming license renewal filing. The first of four of these pre-filing announcements must air on February 1, with announcements two, three, and four airing on February 16, March 1, and March 16 respectively.
Stations are required to air pre-filing announcements in the two months prior to the month in which their license renewal application is due. For more on pre-filing announcements, including the timing of the announcements and sample text to use, visit the FCC’s radio license renewal page here.
February 1 also brings the obligation for full-power radio and television stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma with five or more full-time employees in their SEU to place in their online public file and on their station website an EEO report reporting on their hiring from February 1, 2019 to January 31, 2020. An SEU is one or more stations under common control, serving the same area, and sharing one or more full-time staff person. As a reminder, your Annual EEO Public Inspection File Report should include, among other things, a list of all full-time vacancies filled by the SEU during the year, identified by job title and the recruitment source(s) used to fill the vacancy, the recruitment source that referred the person(s) hired for each full-time vacancy during the year, data showing how many people were interviewed for full-time openings, and a showing of your efforts throughout the year to engage in non-vacancy specific EEO recruitment activities to inform your community about broadcast employment and to train people for broadcast positions. Remember, the FCC conducts random EEO audits and has not been shy over the last few years about fining stations for EEO violations.
In addition to these routine deadlines, there is plenty more going on for broadcaster to consider. Turn on any news program, and there is bound to be some discussion of the early presidential primaries and caucuses happening in Iowa, New Hampshire, South Carolina, and Nevada. Don’t forget that those four contests are merely a pre-cursor to the dozens of primaries and caucuses that follow across the country. Several primaries and caucuses happen in March and April, so lowest unit rate (LUR) windows for several states open throughout February. These begin on February 1 with LUR windows opening in Arizona, Florida, Illinois, N. Mariana Islands (R), and Ohio. LUR windows open later in the month in the following states (in some cases only dealing with contests for the Republican or Democratic nomination): February 5 (Kentucky (R)); February 8 (American Samoa (R) and Georgia); February 11 (North Dakota (R)); February 13 (Puerto Rico (D)); February 19 (Alaska (D), Hawaii (D), Louisiana, and Wyoming (D)); and February 22 (Wisconsin). For more on issues computing lowest unit rates, see our articles here, here and here (this last article dealing with the issues of package plans and how to determine the rates applicable to spots in such plans), and our Political Broadcasting Guide, here.
Also in February is the close of the filing window for the latest FM auction. See our articles here and here on the upcoming auction and the new FM channels that are available. If you want to participate in the April auction, you need to file an FCC Short-Form application by February 11 at 6 PM Eastern Time. Note that there is a freeze on FM minor change applications during the filing window for that auction – from January 29 through February 11.
Reply comments are due in February in FCC proceedings to assess whether to allow the continuation of FM operation on channel 6 LPTV stations (so-called Franken FMs), which we wrote about here. Reply comments are due by February 6. Reply comments are also due that day on the FCC’s proposal to change the prohibition on the duplication of more than 25% of the programming on two AMs or two FMs that serve substantially the same area. See our article here on this proposal.
February will also bring an FCC decision as to whether or not to appeal to the Supreme Court the Third Circuit’s decision throwing out the FCC’s 2017 changes to the ownership rules, including the abolition of the newspaper/broadcast cross-ownership prohibition and the rule that required that there remain 8 independent TV owners and operators in a market before two TV stations can be commonly owned. We wrote about the Third Circuit decision and its aftermath here, here and here.
Parties should also be preparing for the March 9 filing deadline for comments in the FCC’s rulemaking on whether or not to allow AM stations to voluntarily convert to all-digital operations. See our articles here and here on that proposal.
As always, consult with legal counsel and the FCC rules to be sure your station is meeting all of its obligations, and stay tuned to broadcastlawblog.com for updates.
Courtesy Broadcast Law Blog
On January 18, the lowest unit charge window for Presidential primaries or caucuses begins in Super Tuesday states including Alabama, American Samoa (D), Arkansas, California, Colorado, Maine, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas, Utah, Vermont, and Virginia. The LUC window opened on January 15 for South Carolina’s Democratic primary and will open on January 23 for stations in Puerto Rico. Soon behind, on January 25, lowest unit charge windows for presidential contests open in Hawaii, Idaho, Michigan, Mississippi, Missouri, North Dakota (D), and Washington State. The window opens on January 27 in the US Virgin Islands and West Virginia. January 29th is the opening of the window for contests in Guam (R), N. Mariana Islands (D) and Wyoming (R).
In these windows, when broadcasters sell time to candidates for ads in connection with the races to be decided on these dates, they must sell them at the lowest rate that they charge commercial advertisers for the same class of advertising time running during the same time period. For more on issues in computing lowest unit rates, see our articles here, here and here (this last article dealing with the issues of package plans and how to determine the rates applicable to spots in such plans), and our Political Broadcasting Guide, here.
The beginning of the LUC (or LUR for “lowest unit rate”) window in these states is just the beginning of the political windows that will be opening across the country for Presidential primaries and caucuses, as well as for Congressional races and state and local offices. These political windows open 45 days before the primary election (or caucus, in states where there is a caucus system that is open to the public for the selection of candidates) and 60 days before general elections.
In most states, the Presidential contests will have separate primary windows from other political contests that will be decided in the general election in November. In many states, there will be primaries in the Spring or Summer in which nominees will be selected for seats in the US House of Representatives, for contested Senate seats, and for state and local offices. In some states there may be entirely different timing for municipal primaries and elections. For each of these primaries held at different times, there will be a window during which lowest unit charges will apply, but only to those candidates running in the race to be decided in that particular election. Be sure to stay on top of all of these election dates in your station’s service area.
As we have noted before (see our articles here and here), advertising time does not need to be sold to state and local candidates by broadcast stations – the “reasonable access” rules don’t apply. But once a station decides to sell time to these candidates, all of the other political rules apply – including lowest unit rates. The right to these rates cannot be waived by state and local candidates.
Even before the windows open in your state, your station needs to engage in significant planning to make sure that you are charging candidates the correct rates and observing all of the other political advertising rules. We’ve written about some of those issues here.
Reasonable access and equal opportunities apply even outside the window. That means that federal candidates have a right to buy time on your stations, even outside the window. Equal opportunities mean that if you sell ads to one candidate, you must sell them to another. And if you have a candidate on the air outside of an exempt program (see our articles here and here on exempt programs), you must give the other candidate equal time if they request it within 7 days. That goes for on-air appearances of station employees who decide to run for office (see our articles here, here and here) and for commercial advertisers who appear in their own spots and become political candidates (see our article here).
Once legally qualified candidates buy time, inside or outside the political window, the “no censorship” rules apply (see our articles here and here), meaning that you cannot censor a candidate’s message. Because a station cannot censor a candidate’s ad, in almost all cases, they must run the spot unaltered with the message that the candidate has decided to convey, even if the station questions its truthfulness. But that means that the station has no liability for the candidate ad.
Third party ads, from PACs, political parties and other advocacy groups will no doubt accompany the increase in candidate spending. These ads, while not entitled to lowest unit charges, nevertheless present their own unique challenges. As these ads can be edited or rejected based on their content, stations can theoretically have liability for their content if that content is defamatory or raises other legal issues (see our article here on dealing with challenges to the truth of these third-party political ads). Plus, the FCC’s recent decision about the public file obligations that go with third-party political ads (and other federal issue ads) provide yet another layer of complexity for broadcasters (see our articles here and here).
These are just some of the issues that stations will need to deal with as the election season kicks into high gear. Study up, get prepared, and do your best to cope with the upcoming onslaught of political advertising that may be coming your way.
Courtesy Broadcast Law Blog
Earlier this week, the FCC’s Enforcement Bureau released an Order approving a consent decree with Scripps Broadcasting where Scripps agreed to pay a penalty of $1,130,000 for perceived violations of the FCC’s rules requiring tower light monitoring for towers used by a number of TV stations that it had recently purchased. The company also agreed to adopt numerous procedures to insure continuing compliance, including notification to the FCC of future issues. The FCC began the investigation when a plane crashed into one station’s tower. While the FCC specifically states that it did not find any evidence that any of the “irregularities” in the tower monitoring process contributed to the plane crash, the crash opened the door to the FCC’s investigation of the company’s tower light monitoring process at all of its stations, leading to this fine. Are you ready for such an investigation?
In the consent decree, the Commission cites various tower-related FCC rules that must be observed by tower owners. The rules include Section 17.47(a), which requires antenna structure owners to monitor the status of a structure’s lighting system by either (1) making “an observation of the antenna structure’s lights at least once each 24 hours either visually or by observing an automatic properly maintained indicator designed to register any failure of such lights” or (2) by “provid[ing] and properly maintain[ing] an automatic alarm system designed to detect any failure of such lights and to provide indication of such failure to the owner.” That rule also requires that the tower owner inspect any automatic monitoring system at least once every 3 months to make sure that it is working correctly, unless the owner is using a system certified as reliable and not requiring such inspection by the Wireless Bureau of the FCC (see our articles here and here where FCC fines were issued when monitoring systems did not alert the tower owner of tower lighting issues).
The rules also require that the tower owner keep records of the required monitoring, including any instances where any required lighting is not operating (noting when the outage occurred and when it was repaired, and when FAA notice was provided). The FCC rules also require prompt notification to the FAA when certain lights have stopped operating – obviously so that the FAA can notify aircraft operating in the vicinity of the tower.
Part 17 of the rules also sets out painting requirements for towers, and requirements that many towers be registered with the FCC. In fact, in the Scripps case, part of the fine was based on Scripps’ failure to notify the FCC of the ownership change of some of the towers as required by the FCC tower registration rules (see our posts here and here about other fines for this violation).
One article like this cannot possibly set out all the tower lighting, painting, and monitoring rules. But the severity of the sanctions in this case demonstrates the obvious importance of these rules – and the need for each broadcaster to carefully review these rules and make sure that they are strictly complying with all of the requirements. Because of the safety risks, the FCC takes tower maintenance requirements very seriously (see our post here where we wrote about a notification from the FCC to tower owners that paying penalties was “not just a cost of doing business” but much more serious). Even companies that are merely leasing tower space have responsibilities to notify the FCC and FAA if their lessor is not performing its responsibilities to maintain the tower (see our post here). The risk of non-compliance is not only penalties like the one assessed in this case, but also potential civil liability in cases where there are incidents like the situation that started the investigation. Take your responsibilities seriously.
Courtesy Broadcast Law Blog
This weekend, the New York Times ran an article seemingly critical of Facebook for not rejecting ads from political candidates that contained false statements of fact. We have already written that this policy of Facebook matches the policy that Congress has imposed on broadcast stations and local cable franchisees who sell time to political candidates – they cannot refuse an ad from a candidate’s authorized campaign committee based on its content – even if it is false or even defamatory (see our posts here and here for more on the FCC’s “no censorship” rule that applies to broadcasting and local cable systems). As this Times article again raises this issue, we thought that we should again provide a brief recap of the rules that apply to broadcast and local cable political ad sales, and contrast these rules to those that currently apply to online advertising.
As stated above, broadcast stations and local cable systems cannot censor candidate ads – meaning that they cannot reject these ads based on their content. Commercial broadcast stations cannot even adopt a policy that says that they will not accept ads from federal candidates, as there is a right of “reasonable access” (see our article here, and as applied here to fringe candidates) that compels broadcast stations to sell reasonable amounts of time to federal candidates who request it. Contrast this to, for instance, Twitter, which decided to ban all candidate advertising on its platform (see our article here). There is no right of reasonable access to broadcast stations for state and local candidates, though once a station decides to sell advertising time in a particular race, all other rules, including the “no censorship” rule, apply to these ads (see our article here). Local cable systems are not required to sell ads to any political candidates but, like broadcasters with respect to state and local candidates, once a local cable system sells advertising time to candidates in a particular race, all other FCC political rules apply. National cable networks (in contrast to the local systems themselves) have never been brought under the FCC’s political advertising rules for access, censorship or any other requirements – although from time to time there have been questions as to whether those rules should apply. So cable networks, at the present time, are more like online advertising, where the FCC rules do not apply.
Disclosure is another place where the government-imposed rules are different depending on the platform. Broadcast and local cable systems have extensive disclosure obligations, in online public files, that detail advertising purchases by candidates and other issue advertisers. We recently wrote (here and here) about the new enhanced disclosure rules for federal issue advertising (including ads supporting or attacking federal political candidates purchased by groups other than the candidate’s own campaign committee). Cable networks and online platforms do not have federal disclosure obligations. Some have voluntarily adopted their own disclosure policies. In addition, some states have imposed obligations on these platforms (see, for instance, our article here), but as we wrote last month, at least one appellate court has determined, in connection with Maryland’s online political advertising disclosure obligations, that such rules are unconstitutional when imposed on platforms rather than on advertisers.
Certainly it can be argued that there are technical differences in the platforms that justify different regulation and different actions by the platforms themselves. Online platforms clearly have the potential to target advertising messages to a much more granular audience. The purpose of this article is not to argue one way or the other – just to point out that these differences exist. As we are already well into the political season with advertising running for the 2020 election, we are unlikely to see significant changes in these rules for this election – but watch for more discussions on these differences in the future in terms of how various platforms treat political advertising, and whether this differing treatment should continue.
Courtesy Broadcast Law Blog