Here are some of the regulatory and legal actions and developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
Courtesy Broadcast Law Blog
A $12,000 fine issued to an FM translator operator for operating with a transmitter power output that exceeded its licensed limits was upheld by the FCC’s Enforcement Bureau in a decision released this week. The Commission rejected the licensee’s argument that the Commission should have first given it notice and an opportunity to fix the improper operation before issuing a fine. The FCC noted that licensees, not the FCC, have the obligation to determine if they are operating legally or not. The FCC also rejected an argument that the licensee was only trying to maintain its effective radiated power when its antenna was damaged by a storm when it increased its transmitter power output. But, unlike for full-power stations, the transmitter power output of FM translators is regulated, and to make a change, you need FCC approval. The FCC also rejected attempts to reduce the amount of the fine based on the licensee never having been fined before, an argument rejected based on the licensee’s record that included several other violations that had not resulted in fines.
When we wrote about this case when the FCC’s staff initially issued the fine, we warned translator operators to keep this case in mind when reviewing their operations. With so many new translators coming on the air in the last few years, it is important for operators to remember to limit TPO to what is specified in a license. The power output cannot exceed 105% of what is authorized on the license (See Section 74.1235(e) of the FCC Rules). Full-power non-directional FM stations, on the other hand, can generally change their TPO and transmission line without prior FCC approval as long as the change does not result in changes to authorized ERP (and even some ERP changes are permitted without a construction permit application – see Section 73.1690 for details), with the licensee only having to file an application for license on Form 302 after the changes have been made. But translators need approval to change TPO before it is done. Translators can sometimes be out of sight and out of mind. But licensees are just as responsible for their proper operation as they are for the proper operation of any other station. Given the size of the fine issued in this case, translator operators should be sure that they know the rules and review their operations to make sure that these operations fully comply with all of the FCC’s rules.
Courtesy Broadcast Law Blog
The FCC yesterday acted to resolve the proceeding begun a year ago (see our article here) to eliminate the rule that prevented an FM or TV broadcaster from denying space to a competing broadcaster on a broadcast tower that it controls. As expected, that rule was eliminated by an order to become effective when it is published in the Federal Register (as it adopts no new paperwork requirements, review under the Paperwork Reduction Act which so often delays the effective date of FCC actions is not required). This rule was initially adopted 75 years ago and, in the past, it had been seen as a way to ensure that a broadcaster could not, by withholding access to a unique tower site that the existing broadcaster controlled, foreclose a new competing station from coming on the air.
The FCC justified its abolition of the rule by finding that there are many more towers now available to broadcasters than were available when this rule was first adopted, and most of these new towers are owned by companies that do not own broadcast stations and have no incentive to stop a new broadcast station from leasing space on their facilities. Also, the FCC noted that it is not the lack of access to tower space that limits the ability of potential broadcasters to launch new competitive stations in a market, but instead the lack of available spectrum in any community on which to operate a new FM or TV station.
The rule was always very narrow in scope, and thus had never been successfully used. The rule only prohibited the renewal of the license of a radio or TV station that did not provide access to a unique tower site to a potential competitor. The FCC could never force a broadcaster to provide access to a competitor – it could only wait to the next renewal and decide not to renew a station license if the competitor was denied access. Moreover, the competitor had to prove that the site to which it was denied access was unique – that there was no other suitable site from which the competitor could operate. As there were always arguments that some new tower could be built to accommodate the competitor, or some building might exist where its antenna could be mounted, that uniqueness requirement limited the applicability of the rule.
Many years ago, I represented a new broadcaster who had tried to use that rule to gain access to a tower site that appeared to be the only one from which it could launch its new TV station. While in initial orders the FCC declined to order the licensee to make the site available (as its renewal was pending), the complaint based on this rule did eventually result in the new TV station getting access to the tower. But that was a different time, when there were few towers and many more new entrants to the broadcast industry. Now, when towers have become much more plentiful with the explosion of wireless companies that demand tower space, and so few new broadcast stations, the rule appears to have outlived its usefulness. So, as the FCC noted, no broadcaster supported its retention. Now it is one less rule broadcasters have to remember.
Courtesy Broadcast Law Blog
Almost every broadcaster and other media company uses digital and social media to reach their audiences with content and information that can be presented in ways different than those provided by their traditional platforms. Whether it is simply maintaining a website or streaming audio or video or maintaining a social media presence to reach and interact with their audiences, these alternative platforms pose their own legal issues. These issues can range from the protection of a current brand to concerns over having the rights to exploit content that you obtain from others. You can have concerns over music rights. There has been much litigation over improper uses of photos found on the Internet (see our articles here, here and here). And there are concerns over the rights of social media platforms to use your content in ways that you don’t expect (see my blog articles here and here). Toss in some sponsorship identification issues from the FTC and emerging privacy concerns, and there are plenty of legal issues that you need to consider in exploiting digital platforms. To help highlight the issues, I conducted a webinar for numerous state broadcast associations a few weeks ago, the video of which is available below (note that the sound quality was a little rough at first but improves a few minutes into the discussion). Plenty of legal issues for any media company to consider:
Courtesy Broadcast Law Blog
Here are some of the regulatory and legal developments of the last week of significance to broadcasters – and a look ahead to the FCC’s consideration of two media modernization items in the coming week. Links are also provided for you to find more information on how these actions may affect your operations.
Next week, here is an event that we will be watching:
Courtesy Broadcast Law Blog
While we are approaching the end of summer in this most unusual year, the regulatory dates keep coming, though perhaps a bit slower than at other times of the year. One of the big dates that broadcasters should be looking for is the announcement of the Annual Regulatory Fees that will likely be paid sometime in September. This year, there has been much controversy over those fees, with the FCC proposing that broadcasters’ fees should go up even though the FCC’s budget is flat, while the NAB has argued that they should remain flat or decrease. And many broadcast groups have argued for liberal waivers of the fee requirement in this year of the pandemic when so many stations were hit so hard by the economic downturn. Watch for this decision – likely toward the end of the month.
The license renewal cycle continues in August for both radio and TV. Full-power TV, Class A TV, TV translator and LPTV stations in North Carolina and South Carolina and full-power AM, FM, FM translator, and LPFM radio stations in Illinois and Wisconsin should be putting the finishing touches on their license renewal applications—due to be filed on or before August 3 (the deadline being the 3rd as the 1st of the month is a Saturday). While stations are no longer required to air pre-filing announcements, the requirement to air post-filing announcements remains. Those announcements must begin airing on August 1 and continue through October. See our article about how to prepare for license renewal here.
If they are part of a station employment unit (commonly owned stations serving the same area) with 5 or more full-time employees, commercial and noncommercial full-power TV, Class A TV, LPTV, full-power AM and FM whose license renewal filing date is August 1 in any year are required to upload to their FCC-hosted online public file their Annual EEO Public File Report. This report is to be uploaded on or before August 1 (no carry-over to August 3 as this report is not actually “filed” with the FCC). This report details the station employment unit’s hiring outreach in the preceding year, as well as its supplemental, non-vacancy specific efforts to educate the community about broadcast employment opportunities and to train their staff to assume greater employment responsibilities. Stations with August 3 renewal deadline dates this year (that is, TV stations in North Carolina and South Carolina and full-power radio stations in Illinois, and Wisconsin) must also file a Broadcast Equal Employment Opportunity Program Report (FCC Form 396) even if they have fewer than 5 full-time employees. The license renewal application requires the Form 396 file number, so that form must be filed before finalizing the renewal application. If you’re looking for a refresher on EEO compliance, see the slides from a presentation we did on the topic here.
The FCC will hold its next Open Meeting on August 6. The FCC included two media modernization items on the August agenda that are relevant to broadcast operations. If adopted, the first item would eliminate the radio duplication rule for AM service. Currently, the rule prohibits two commonly-owned (or operated through a Time Brokerage Agreement) radio stations operating in the same service (AM or FM) where 50% of either station’s city-grade contour overlaps the other commonly-controlled station’s contour from duplicating more than 25% of their weekly programming. Eliminating the rule would permit two overlapping AM stations to duplicate up to 100% of their weekly programming. The FCC saw AM duplication as a possible way to preserve economically challenged AM stations, while also allowing AMs that may be allowed to convert to full-time digital operations (if the FCC allows such conversions) to continue to serve audiences that have not yet bought digital receivers. The draft FCC decision would not eliminate the rule for FM service, on the theory that FM does not face the same economic problems as AM, while noting that FM stations that need additional flexibility can apply for a waiver. We wrote in more detail here about what elimination of the rule means for AM broadcasters.
The second media modernization item to be considered would eliminate a seldom-used rule that forced TV and FM licensees to share a unique tower sites with other licensees, if no other comparable site was available in the area. This rule was adopted to prevent a licensee from restricting competition by not allowing other licensees to use a unique tower site. As a party seeking to invoke the rule needed to show that a site was unique, and as the rule could only be invoked to deny the license renewal of the licensee of a station controlling a unique site and blocking its competitive use, the FCC has never found that a licensee violated its provisions. The FCC also points to the increase in the number of antenna sites as a reason for getting rid of the rule. See our brief writeup of this item here.
Comments are due by August 17 and reply comments by August 31 in the Broadcast Internet (ATSC 3.0 datacasting) proceeding. This rulemaking seeks comment on industry’s ideas for Commission’s rule changes needed to speed deployment and adoption of the datacasting capabilities of this NextGen Television transmission standard. See our articles about the declaratory ruling and the rulemaking here and here.
Without another extension past August 31, the sponsorship identification waiver issued by the Media Bureau in April and extended in June will expire. The waiver allowed stations to air PSAs related to the pandemic, using time donated by commercial entities to organizations involved in the pandemic relief effort, without identifying the commercial entities paying for the time. Such sponsorship identification would otherwise be required by the rules as the commercial sponsors paid for the time. As there was fear that some of the commercial sponsors would not want their products associated with the pandemic, the FCC waived the sponsorship identification rules in this limited circumstance. We wrote about the waiver here and here.
Consult your own attorneys and advisors to determine what other important dates may apply to your stations. And stay tuned to our blog for updates and commentary on regulatory developments throughout the month.
Courtesy Broadcast Law Blog
Here are some of the FCC regulatory, legal, and congressional actions of the last week—and music licensing action in the coming week—of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
Next week, we will be keeping our eye on the following action at the Department of Justice:
Courtesy Broadcast Law Blog
The FCC this week announced consent decrees with six large radio groups over problems with the political files maintained by these groups. The consent decrees included very specific compliance plans for each company to ensure that it met all FCC political file obligations in the future. And it suggested that the penalties were mitigated by the current economic conditions caused by the pandemic – but emphasized the importance to the FCC of the political file obligations and suggested that industry associations take steps to educate all broadcasters about their public file obligations when they run political advertising. Based on these decisions, we thought that we would republish an updated version of an article that we ran two years ago about those political file obligations so that broadcasters can review their own files to ensure that they have in their files the documents that the FCC wants to see.
Our article from two years ago looked at the political file obligations not too long after the FCC required that all of these documents be made available online, as part of the FCC-hosted online public inspection file. The fact that this file can now be viewed by anyone anywhere across the globe has made the required documents much more visible than when they could be reviewed only by physically visiting the main studio of a broadcast station. Not only can these documents be reviewed by the FCC in Washington, DC, but they can be reviewed by candidates, their agencies, and political ad buyers across the country. In fact, we understand that some political ad buyers have online “bots” that scan these files routinely to keep track of political ad buying across the country. Plus, with the license renewal cycle ongoing, the FCC reviews the political file as part of their review of a commercial station’s license renewal application (where licensees need to certify as to whether they have kept their public files complete in a timely fashion).
As an initial matter, it is worth mentioning that the political file has two main purposes. First, it is designed to provide information to the public about who is trying to convince them to vote in a certain way or to act on other political issues that may be facing their country or community. Second, the file is to inform one candidate of what uses of broadcast stations his or her opponents are making. The documents placed in the file must be kept in the file for only two years from the date that they were created – perhaps on the assumption that at that point, we will be on to the next election cycle and old documents really won’t matter to the public or to competing candidates in the last election. But what needs to go into the file?
For any request for advertising made by any legally qualified candidate for any public office (Federal, state or local), the following information needs to be maintained in the file:
The FCC rules also require that information about free time provided to candidates outside of exempt programs be listed in the public file. So if a candidate appears in a PSA, that needs to be noted in the political file. See our article here for more information about such uses by candidates that can trigger this obligation.
All information should go into the file as soon as an order is received – certainly within one business day of the receipt of the relevant document – and perhaps quicker in the final days of an election. The only exception to the one-day rule is for the details of the exact times that the spots ran, which can be inserted into the file when your traffic system generates those reports – provided that they must be provided sooner on request.
That same information as provided for a candidate ad needs to be put into the file for any advertising relating to a “political matter of national importance.” That would include any ad by a non-candidate group (e.g., a PAC, labor union, corporation or other interested individual) dealing with any issue likely to be dealt with here in Washington. Such issues would include:
So, for these issue ads dealing with federal matters, the public file needs to state whether or not the request to purchase time was accepted or rejected, the rate charged, the schedule on which the ads will run, the class of advertising purchased, and the identity of the sponsor. As set forth below, for any issue ad (federal, state or local), the information about the identity of the sponsor needs to disclose contact information for that sponsor and a list of the members of its governing board.
In the political file for these federal issue ads, in addition to all of the information for candidate ads, the file also needs to include a description of the issue that the ad addresses. In the last year, the FCC has clarified its requirements and made clear that this identification of the issues addressed by a non-candidate ad needs to include the name of every federal candidate that the ad mentions and the office for which they are running, and a description of any federal issue mentioned in the ad. We have provided a much more detail on these ruling in our articles here, here, here and here. Suffice it to say, this puts a burden on every station to carefully review any noncandidate ad to see exactly what issues it discusses. These decisions also take an expansive view of what are federal issues, requiring the disclosure of the mention of any legislative issue pending before Congress, any issue pending before any federal administrative agency and any of the big policy issues that are debated on a national level (e.g. health care, immigration, abortion, racial injustice, etc.).
All issue ads, whether dealing with federal, state or local issues (state and local issues could include state ballot initiatives, local zoning or school bond issues, or attacks on state or local candidates), also require information about the sponsor of the ads. The information includes the following:
In the FCC’s recent clarification of the rules for issue advertising, the Commission required that stations, if they are given only a single name of an officer or director of an entity buying issue ads, ask the ad buyer for the names of additional officers or directors – on the assumption that it is unlikely that any organization has but a single officer or director. Stations must make such inquiries and keep records (though not necessarily records that need to go into the public file) of the inquiries that they make when they have received only one name for an issue-ad buyer.
We note that many stations use forms to gather the information necessary to respond to these questions – often forms generated by a group owner or one of the “PB” forms created by the NAB. The NAB in fact recently released updated PB-19 forms for candidate and non-candidate/issue advertising. These are good models to use to gather the information for the file, but the station still needs to make sure that the information provided by the political buyer fully responds to the questions on the form. We have heard of many cases where non-candidate groups do not want to say on the form that they are buying ads on a Federal issue, even when they are clearly attacking a candidate for Federal office, perhaps because they do not want all the information about the advertising buy (including the price and schedule) to be revealed in the public file. Stations need to inquire if the information provided is not complete, as the burden is on the station, not the ad buyer, for this information to be complete and accurate, and timely placed in the online public file.
Also, do not put information into the file about the method of payment for the ads. We have seen cases where checks from advertisers, or worse yet, information about their electronic payment methods, have been included in the public file, potentially revealing sensitive information that could compromise bank accounts. Do not place this information into the file.
Finally, be alert to state record-keeping requirements. States including Washington State have enacted state laws that may impose different or additional paperwork obligations on political advertising (see our article here). Numerous other states have other recordkeeping obligations. While most of those requirements (although not that imposed by Washington State, which is broader than the federal mandate) can be met by the FCC’s public file, some of these state’s rules appear to impose these obligations on any advertising – not just broadcast advertising – so any digital political ad sales that you do may impose these public file obligations on your station. So be aware of state law obligations, and if your station is in one of those states, be sure to not only observe the FCC’s rules, but also those of the state in which you are located.
Good luck in keeping all these rules straight in the last weeks before the election. For more information about political advertising obligations, see our Guide to Political Broadcasting, here. And, of course, ask your own lawyer as these issues arise, as they raise many tricky issues that may depend on the specific facts of your case to get the right answer.
Courtesy Broadcast Law Blog
Our friends at Edison Research recently released a study on music discovery highlighting the ways in which people discover new music. Among their findings was that broadcast radio, YouTube and streaming services were among the largest sources for that discovery. That report caused one radio trade publication to suggest that podcasts, which ranked relatively low among the places where new music is discovered, might have opportunities to grow there. What that suggestion overlooks is one of the biggest reasons that music podcasts have not taken off – rights issues. There still is no easy way to clear the rights to major label music – so most podcasts are limited to spoken word featuring limited, directly licensed music.
That comment made us think that we should re-run an article from earlier this year, that explained music rights in podcasts. That article was prompted by the settlement between the Radio Music License Committee and BMI over music royalties for broadcasting. While a press release about the settlement said that the BMI license includes the use of music in podcasts, we pointed out that 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 all of 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 the performance rights cleared through an license from ASCAP, BMI or one of the other performing rights organizations 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 directly from the copyright owners – both for the musical composition and the sound recording. 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 directly from the copyright holders.
Courtesy Broadcast Law Blog
FCC rules currently prohibit radio stations in the same service (AM or FM) that have over 50% overlap of their principal community contours (the 70 dBu for FM stations and the 5 mV/m contour for AM stations) from duplicating more than 25 per cent of the total hours in their average programming week. In preparation for the FCC’s open meeting on August 6, the FCC last week released its draft order proposing to eliminate that rule as to AM stations (as we wrote on Friday). As the draft order looks to eliminate the rule only for AM stations while retaining that rule for FM stations, it is worth taking a deeper look at this tentative decision particularly as one of its implications is that the FCC may well be allowing AM stations to transition to all-digital operations.
The draft decision provides two reasons for eliminating the rule for AM stations. First, it suggests that the challenging economic and competitive status of AM radio justifies the decision to allow duplication by AM stations that operate in the same area. Keeping a station operational and providing some service is preferred over letting that station go silent. The economic condition of the AM band was determined to alone be justification for the decision to permit duplication. But the FCC provided a second reason – one that suggests that the FCC is seriously considering the proposal (about which we wrote here and here) to allow for all-digital AM stations. In the draft order, the FCC says that allowing AM program duplication would provide an opportunity for an AM station to go all-digital while still broadcasting its programming on another AM station in the current analog format – allowing listeners to hear the station even if they do not yet have a digital AM receiver.
As to FM, the draft decision says that the economics of FM are such that there is not the same need to allow program duplication. Permitting duplication, in the FCC’s eyes, would limit competition and format diversity on the FM band. The decision does note that, in case of an economically distressed station, the FCC would consider a waiver to allow duplication if the choice is between duplicated service and no service at all.
The draft order will be considered at the FCC’s August 6 meeting. Watch for the FCC’s final action on this case on or before that date.
Courtesy Broadcast Law Blog