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From Broadcast Law Blog Archive

Here are some of the regulatory 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.  Also, we include a quick look at some important dates in the future.

  • The Enforcement Bureau advised broadcasters (and other participants) of their Emergency Alert System obligations, including the requirement to make EAS messages accessible. The advisory provides a good reminder of a broadcaster’s EAS obligations. (Advisory)
  • The FCC issued a status report on the incentive auction repack and announced that it has sufficient funds available for the reimbursement of costs incurred by LPTV and TV translator stations because of the repacking to increase their payments from 85% of verified estimates to 92.5%. According to the status report, all of the stations repacked as part of the incentive auction have vacated their pre-auction channels and, as of this week, over 95% of the stations are operating with their final technical facilities.  (Public Notice)
  • The FCC released its count of broadcast stations as of year-end 2020, finding more than 33,500 stations, including more than 15,000 full-power radio stations and nearly 1,200 full-power TV stations. (Broadcast Station Totals)
  • The FCC submitted its annual report to Congress on the implementation of the PIRATE Act and the enforcement actions it has taken over the last year. The report notes that COVID-19 and the lack of congressionally-appropriated funds in FY 2020 for the Act have limited implementation and enforcement activities.  (Report)
  • Four low power FM stations in Iowa and Missouri failed to file license renewal applications by their October 1, 2020 filing deadline and are in danger of seeing their licenses expire. This serves as a reminder to television stations in Arkansas, Louisiana, and Mississippi and radio stations in Kansas, Nebraska, and Oklahoma to file their renewal applications, due by February 1, 2021.  (Public Notice)
  • In the copyright world, the Copyright Office released a Notice of Inquiry to review changes to the copyright license granted to satellite TV providers under 2019’s Satellite Television Community Protection and Promotion Act to provide local-into-local retransmission of television stations. The review seeks comments by March 8 as to how the new law impacts affected parties including consumers and stations.  Read more about the inquiry, here.
  • A handful of large radio groups and webcasters will be audited by SoundExchange over their compliance with their copyright licenses for the public performance of sound recordings required when they transmit their programming on the Internet.  Read more about this and other music licensing audits, here.

To help you stay on top of the many scheduled regulatory dates for the rest of the year, we published our Broadcaster’s Regulatory Calendar for 2021, which sets out many of the broadcast regulatory dates and deadlines in 2021.  (Broadcast Law Blog)

Looking ahead, on Monday, a notice is scheduled to appear in the Federal Register announcing the comment period for the FCC’s FM booster rulemaking (we covered the “zonecasting” proposal in more detail, here).  The proceeding asks if boosters should be allowed to originate hyperlocal program that is different from the programming carried on the station they rebroadcast.  Comments will be due by February 10, 2021 and reply comments will be due 30 days later on March 12, 2021.  On Wednesday, the FCC will hold the first of its required monthly Open Meetings of 2021.  After releasing a tentative agenda with only bureau and staff presentations about the FCC’s accomplishments during his term, Chairman Pai, who will preside over his last Open Meeting, added three items for Commissioners to vote on – none of which directly impact broadcasters.  The meeting will be streamed live, here, at 10:30 pm Eastern on January 13.

Courtesy Broadcast Law Blog

The Copyright Royalty Board today published a Federal Register notice announcing that SoundExchange was auditing a number of broadcasters and other webcasters to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. A separate notice to audit the company Music Choice, which also provides a digital music service usually delivered with cable or satellite television services, was also issued to audit their compliance both on webcasting and on their subscription music service which is subject to separate royalty rules set out in a different part of the same section of the Copyright Act and set through a different Copyright Royalty Board proceeding. A third audit notice has gone out to a company called Rockbot, a Business Establishment Service whose royalties are exclusively paid under Section 112 of the statute (see our article here about the CRB-set royalties for these services that provide music played in various food and retail establishments and other businesses).

SoundExchange may conduct an audit of any licensee operating under the statutory licenses for which it collects royalties.  Such audits cover the prior three calendar years in order to verify that the correct royalty payments have been made. The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead they audit a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies audited by SoundExchange here, herehere and here).  Audits are conducted by outside accounting firms who, after they review the books and records of the company being audited, issue a report to SoundExchange about their findings.  The company being audited has the right to review the report before it is issued and suggest corrections or identify errors.  The reports are then provided to SoundExchange and, if they show an underpayment, it can collect any unpaid royalties, with interest.  While, by statute, the notice of the royalty must be published in the Federal Register, the results of the audit and any subsequent resolution usually are not made public.

SoundExchange is not the only royalty collection group who can audit music companies – though its audits are different because announcements are published in the Federal Register. All of the other performing rights organizations (e.g. ASCAP, BMI and SESAC) can conduct audits from time to time. Audits are not limited to music, as television stations and other video companies can be audited to assess their compliance with program royalty obligations. We wrote more extensively about the royalty audit process here.

If your company is audited, get with your attorneys and accountants right away to make sure that you discuss the audit process and how to minimize the disruption to your business.  If you were not on this list, the list serves as a good reminder to assess the records you are keeping to be sure that you are maintaining them in a way that will demonstrate that you paid what you owe.  Any company, big or small, could be the subject of a future audit to assess its compliance with its royalty obligations.

Courtesy Broadcast Law Blog

A Notice of Inquiry from the Copyright Office was published today in the Federal Register, announcing the initiation of an inquiry into the effects of the 2019 changes in the statutory license under Section 119 of the Copyright Act for satellite television providers to retransmit local television stations.  Pursuant to that license, a satellite carrier can retransmit local television stations into their own markets without having to negotiate with each copyright holder in the programming carried by local stations.  Instead, the satellite carrier pays a license fee set by the statute and the proceeds of that license are redistributed through proceedings held by the Copyright Royalty Board to the copyright holders.  As part of that license, satellite carriers can import signals of distant network television stations into a market in certain circumstances – circumstances that were greatly limited by the Satellite Television Community Protection and Promotion Act (the “STCPPA”) in 2019.  As part of that statute, Congress instructed the Copyright Office to conduct this study to review the impact of the 2019 changes.

The 2019 changes eliminated the ability of satellite carriers to import distant network signals to households in a market where:

  • The households could not receive a local over-the-air signal via an antenna;
  • The household received a waiver from a local network affiliate to receive a distant signal;
  • “Grandfathered” households that received distant signals on or before October 31, 1999; and
  • Households eligible for a statutory exemption related to receiving “C-Band” satellite signals.

These exceptions were problematic to broadcasters as they introduced a distant network affiliate into a television market, encouraging viewers to watch that distant station at the expense of the local affiliate.  Congress was concerned that these situations encouraged viewers to watch distant news rather than the local news and information provided by in-market stations.  Many of these provisions were also hard to implement and enforce.  For instance, the question of whether a household could receive an over-the-air signal could often be a contentious question.  Waivers also were problematic, as a local station could feel pressure to give a waiver to a local resident to avoid bad will within the community.  Thus, in 2019, all of these exceptions were abolished.

Distant signals can still be imported under the STCPPA into satellite markets in these limited situations:

  • RVs and commercial trucks; and
  • Subscribers located in “short markets.”

These exceptions were of less concern to broadcasters, as RVs and trucks are typically transitory visitors to a market.  Short markets are ones without an affiliate of a certain network – so the importation of a distant signal would not compete with a local affiliate.  Moreover, the ability of a satellite carrier to rely on these exceptions was further limited, as only a satellite carrier who provided local-into-local service (beaming though their satellite systems local television stations into their own markets) in all 210 television markets can rely on these exceptions.

The study initiated by the Copyright Office is to look at the results of the law.  The Copyright Office seeks comments from interested parties and the public (and it is in fact sending a survey to certain satellite subscribers to see how they have been impacted).  Questions include whether households that did not receive programming from a local affiliate now receive such programming, whether the price and service from the satellite carriers have changed, whether households who were relying on the old exceptions to get network programming can still receive such programming, and whether the change in the statute has otherwise affected the experience of viewers and broadcasters.

Comments are due on the Notice of Inquiry in this proceeding on or before March 8, 2021.

Courtesy Broadcast Law Blog

Here we are, in a new and hopefully more “normal” year – wondering what will be ahead.  Each year, at about this time, we put together a look at the regulatory dates ahead for broadcasters – or at least the primary ones that we already know.  This year is no different – and we offer for your review our Broadcaster’s Regulatory Calendar for 2021.  While this calendar should not be viewed as an exhaustive list of every regulatory date that your station will face, it highlights many of the most important dates for broadcasters in the coming year – including dates for license renewalsEEO Public Inspection File ReportsQuarterly Issues Programs listschildren’s television obligations, annual fee obligations and much more.  This year, for LPTV and TV translator operators, there are also dates associated with this summer’s deadline for all such stations to be operating digitally (see our article here).

While this likely will not be a big political advertising year like 2020, there will be some state and local races – so we note the start of the Lowest Unit Charge window for this year’s November election – relevant in states like New Jersey and Virginia where there are races for governor and state legislature, and to the many locations across the country that will have mayor’s races and other state and local political contests.  Look for local information about the dates for any primary elections for these elections – as those primaries have their own LUC windows for the 45 days preceding the primary.  See our article here on how the other political broadcasting rules apply to state and local elections.

Certainly, as the year progresses, there will be plenty more dates to note.  Follow our blog where we weekly post a summary of the prior week’s regulatory actions relevant to broadcasters and a look ahead prior to the start of each month at the regulatory dates in the coming month, read other newsletters and trade publications and consult your own attorney to stay on top of the regulatory obligations that apply to your stations.  We hope that this 2021 Broadcasters Regulatory Calendar will give you a good start on spotting some of the important dates that may be ahead and affect your operations.

Courtesy Broadcast Law Blog

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

  • The FCC released an order revising its fees for broadcast applications and other filings. The fees were adjusted to reflect the Commission’s accounting of the amount of legal, engineering, and supervisory resources spent on reviewing the filing.  For the first time, the fees will include payments for FM translator minor changes.  The new fee schedule will go into effect after the FCC has updated its internal systems and notice is published in the Federal Register. (Report and Order)
  • The FCC announced that, beginning January 15, it will marginally increase its fines for rule violations to adjust for inflation. (Order)
  • For broadcasters who use drones (“unmanned aircraft systems” or “UAS”), the Federal Aviation Administration released two lengthy decisions amending its regulations governing their operations. The new rules mandate a “digital license plate” to identify most drones to enhance security in the industry and pave the way for expanded operations that are currently allowed only through special waivers or exemptions. At the same time, the FAA modified its rules for small UAS, i.e., those weighing less than 55 pounds, to permit qualified operators to fly them over people and moving vehicles and at night without waivers, provided certain conditions are met. An FAA press release with links to the decisions is available here.
  • The Federal Trade Commission announced consent decrees with six companies over their marketing of CBD products, finding the advertising of specific health benefits of CBD to be deceptive (FTC Press Release). For more information on these decrees and other cannabis advertising issues for broadcasters, see our blog article here.
  • The FCC’s Media Bureau granted a waiver allowing the common ownership of two TV stations in the Lubbock, Texas market even though there would not be eight independent operators in the market after the combination, as required under current FCC ownership rules. The Commission justified the waiver on its “failing station” standard, finding that the acquired station had “been struggling for an extended period of time both in terms of its audience share and in its financial performance.” See the FCC’s letter for the criteria a station must meet to be considered failing and the Video Division’s analysis of this particular transaction.
  • In two decisions, the FCC approved foreign ownership of broadcast companies in excess of 25%. Specific FCC approval is required when foreign ownership in a company holding broadcast licenses is proposed to exceed 25%, with the FCC and other government agencies reviewing the national security and public interest implications of the foreign ownership (decisions on Estrella Broadcasting, Inc. and Univision Holdings, Inc.)
  • In a reminder to pay attention to filing deadlines, eleven low power TV stations in Florida and Puerto Rico failed to submit renewal applications by their October 1, 2020 filing date and are now in danger of their licenses expiring. (Public Notice)  Television stations in Arkansas, Louisiana, and Mississippi and radio stations in Kansas, Nebraska, and Oklahoma are next due to file their license renewals, with a deadline of February 1, 2021.
  • The FCC released its biennial Communications Marketplace Report that analyzes, among other things, the state of the radio and TV marketplaces. The report is provided to Congress to advise it on economic and competitive trends in regulated industries to provide information for any legislation that it may consider.  (2020 Communications Marketplace Report)

For a look ahead, we posted on our blog a review of some of the regulatory dates and deadlines in January and early February of which broadcasters should be aware.  In the coming month, among other things, look for a new FCC administration, quarterly issues/programs lists, KidVid reports, comment deadlines for two proceedings, the Supreme Court’s oral argument on multiple ownership issues and, in a number of states, February 1 license renewal and EEO public file report deadlines.  (Blog)

Courtesy Broadcast Law Blog

Just before Christmas, the Federal Trade Commission issued consent decrees with six companies resolving proceedings alleging that their marketing of CBD products was deceptive.  The consent decrees included monetary penalties as high as $80,000 and compliance plans to ensure that the named companies would not engage in future marketing of unproven health benefits of CBD products.  The FTC issued a press release on the consent decrees (links to the decrees and related documents can be found on the same webpage as the press release).

Some of the health claims that the FTC found problematic were very specific, suggesting that CBD could aid in the treatment of specific diseases and medical conditions.  Other claims found to be improper included more general claims that CBD was effective for “pain relief” and that the products are safe for all users.  As noted in the FTC documents, only proven health claims for CBD can be included in marketing material – and so far, the proven health benefits have been limited to those provided by specific FDA-approved anti-seizure medications.  While these decrees were with companies selling CBD products, rather than media companies that ran their ads, as we have noted before, broadcasters and other media companies should be alert to advertising messages that exceed permissible guidelines.  While the FDA has promised further guidance on the sale and marketing of CBD products, action has likely been stalled by the agency’s concentration on pandemic-related issues. 

This month’s decrees are not the first federal government actions to target the marketing of CBD products.   We have written before (see, for instance, our articles here and here) about actions by both the FTC and the FDA that target companies selling CBD products, not only for the types of deceptive health claims involved in these cases, but also in connection with any CBD product that is marketed for ingestion as a food additive or dietary supplement.  As we noted, hemp-based CBD is no longer a Schedule I drug that is banned by federal law for all uses in the US (contrast this with marijuana, which we have suggested that media companies not advertise at all given its continued illegality under federal law).  Instead, CBD can now be legally produced and distributed in many states that have implemented regulatory controls required by the 2014 and 2018 Farm Acts.  But companies looking to advertise these products need to observe the restrictions on health claims that these recent decisions found problematic, as well as the restrictions on ingestible products cited in past regulatory actions, and any other restrictions imposed by law and regulation – including state laws that may limit the distribution and marketing of these products.  Given the uncertainties that surround CBD advertising, stations should consult with counsel before accepting such ads.

Courtesy Broadcast Law Blog

Last week, Chairman Pai gave a speech to the Media Institute in Washington, talking about his deregulatory accomplishments during his tenure as FCC Chairman.  Central to his speech was the suggestion that the broadcast ownership rules no longer made sense, as they regulate an incredibly small piece of the media landscape, while digital competitors, who are commanding a greater and greater share of the market for audience and advertising dollars, are essentially unregulated.  Not only are they unregulated, but the digital services that compete with broadcasting are owned and financed by companies who are the giants of the US economy.  In his speech, he noted that the company with the most broadcast TV ownership is dwarfed in market capitalization by the companies offering competing video services.

While the Chairman’s speech concentrated on television, mentioning radio only in passing, we note that many of these same issues are even more at play in the audio entertainment marketplace.  When the Chairman two months ago offered remarks on the hundredth anniversary of the first commercial radio station in the US, he recognized that radio has played a fundamental role in the communications world over the last century.  But that role faces more and more challenges, perhaps exaggerated by the pandemic when in many markets listeners are spending less time in cars where so much radio listening takes place.  There are many challenges to over-the-air radio as new sources of audio entertainment that sound and function similarly are more and more accessible to the public and more and more popular with listeners.  Over-the-air radio is already less a distinct industry than a part of the overall audio entertainment marketplace competing with streaming services, podcasts, satellite radio and other audio media.  These changes in listening habits are coupled with a change in the advertising marketplace, as the digital media giants now take over 50% of the local advertising market that was once the province of radio, television and newspapers.

These changes in the media marketplace, particularly for radio, will be facing any new administration at the FCC starting in January.  The ownership rules for local television ownership and the cross-ownership rules restricting daily newspaper owners from also holding radio or TV interests may well be resolved by the current Supreme Court review of the Third Circuit decision overturning the 2017 changes adopted by the Commission.  But a review of radio ownership rule changes, started as part of the FCC’s required Quadrennial Review of the broadcast ownership rules, has been on hold for the last year and a half at the FCC.  Comments on proposals to amend those rules were filed in the Spring of 2019, but they have not been acted on, as the Third Circuit decision effectively froze consideration of changes to any of the FCC’s ownership rules. The underlying basis of that decision — whether the FCC adequately considered the impact of ownership changes on minorities and other potential entrants to broadcast ownership — would impact any further relaxation of any broadcast ownership rules, so the radio rule review is on hold.

There have been no substantial changes in the ownership rules for radio since 1996, during a period where there have been massive changes in the rest of the audio industry.  In 1996, streaming was something only a few technologically-forward people even knew existed. Pandora did not launch its streaming service for another decade, and Spotify was even further behind – not launching in the US until 2011. Even those few people who knew that audio streaming existed in 1996 would never have thought that they could listen to a streaming service in their cars. Apple was not offering a streaming music service – in fact it had not even introduced the iPod (introduced in 2001) or the iTunes store (2003) – both themselves technological relics because of subsequent changes in the audio marketplace. Given that there was no iPod, there were obviously no podcasts to bring audio storytelling to the millions who now listen to their favorite programming through the multitude of services that provide podcasts on almost any subject. There was no Alexa to bring Amazon and other music services into the home – in fact, Amazon itself had only begun selling books online in 1995. Even Sirius XM (then Sirius and XM as two competing companies) had not initiated their services at the time of the 1996 Act – as XM did not start providing service to consumers for another 5 years (with Sirius launching a year later). And the pace of change for audio technology is not slowing.

Streaming to cars – radio’s most important listening venue – is already a reality. Between streaming and satellite radio, an unlimited number of audio channels are available to most Americans. Even drivers in rural areas with little or no mobile coverage providing sufficient bandwidth to deliver streaming services can receive Sirius XM service, and podcasts and cached content from certain subscription streaming services provide additional audio options. And, over time, with driverless cars on the horizon, video may too become a competitor to radio in the car.

Radio reception in the home is changing as well. Alexa, Google Home, and its imitators provide direct voice-activated access to audio content that does not include traditionally-delivered over-the-air radio. Here, too, the number of channels of programming available from these services is effectively unlimited. These digital giants providing new audio competition – including Facebook, Amazon, Google and Apple – all have market capitalizations at or well above 500 billion dollars, dwarfing the total capitalization of the entire radio industry which is less than 10 billion dollars.

The competition for radio revenue has also dramatically changed since 1996. In 1996, local advertising competitors were the local newspaper, some TV ads, and direct mail. Local cable TV ad insertion networks were in their infancy. And digital advertising competition really did not exist. Facebook did not launch to the general public until 2006 (being available to college students two years before), and Google wasn’t launched until 1998. Analysts say that digital services now take over half of the local advertising in most radio markets.  Even regulators seem to recognize this dominance, as witnessed by the recent antitrust lawsuits filed against digital media giants Facebook and Google.

The fact that over-the-air radio continues to command a significant audience share is no doubt attributable to the quality and relevance of the content that it provides to local listeners, its ease of access, the lack of subscription fees and habit. But with all the competition now in the radio marketplace, rules that were written when the only competitive mobile audio content was from the cassette player would seem ripe for review. So how will the new FCC react to these marketplace changes as it completes the work on the Quadrennial Review begun in 2019?

What changes in the ownership rules will the new FCC be prepared to make to address the seismic shift that has occurred in the audio marketplace? Will the FCC recognize that radio is no longer an island unto itself? Will they recognize that radio no longer is a separate market where radio stations only compete with other radio stations? That is a real question, as sometimes the government is slow to recognize the transformation of the marketplace.

In the past, some radio companies have suggested a lifting of the “subcaps” in the radio ownership rules that limit the number of AM or FM stations that can be owned in a single market (see our article here). Right now, in the largest markets, one party can own up to 8 stations, but no more than 5 can be in one service – AM or FM. Some fear that lifting the subcaps will mean that the big players will all migrate to FM, further damaging the already-ailing AM band. The FCC will need to address whether this artificial support for the AM band is still in the public interest – and consider whether, even if the big radio owners move to FM, that won’t create more opportunities for niche programmers on the AM dial.  In the comments filed in 2019, even some broadcasters who opposed relaxation of FM ownership supported deregulation of AM ownership, seeing the lifting of AM limits as a way in which innovation in AM operations might be possible.

A more far-reaching question is whether the lifting of the subcaps goes far enough to allowing radio owners to develop the synergies needed to compete with the plethora of new audio competitors. Some suggest that, to compete effectively against the digital giants who are thus far subject to little or no regulation, radio owners need to be able have a marketplace presence that is even deeper than 8 stations. For instance, in a market like New York City, BIA Kelsey (the broadcast analysis service on which the FCC relies to determine which stations compete in each market) says that there are 154 radio competitors serving all or part of the market. In Los Angeles, BIA says that there are 93 stations that compete in the market. Are 8 stations enough to really compete in the media marketplace in those markets?

Others worry that more concentration will shut out potential new owners and believe that new technologies still don’t provide an equivalent means to reach the radio audience. Fearing that new entrants, diverse owners, and niche programmers will be priced out of radio ownership if more consolidation is allowed, some are likely to continue to oppose any change in the radio ownership rules just as they have opposed changes to the TV and cross-ownership rules in the pending Supreme Court case.

Small market radio provides its own challenges. In markets not rated by Nielsen, the FCC looks at the overlap of radio station’s service contours to determine which stations compete, and how many radio stations are in any market. In the smallest markets, a broadcaster can own up to 5 stations, no more than 3 of which can be in any service, and in no case can the broadcaster own more than half the stations in a market. Some small market broadcasters suggest that these limits often leave one or two weak stations in a market – stations that provide little local service. Just as many markets have a single newspaper (if they even have one); some argue that some smaller markets simply cannot support multiple commercial radio operators. Should the more successful stations in the market be allowed to own some of these orphan stations, or would further consolidation in the small markets foreclose service from some operator who might come up with a unique idea that could revive an otherwise failing station?

These are the issues that will likely face the new FCC as they finish the Quadrennial Review after the Supreme Court decision clarifies the issues that the FCC needs to consider in these reviews.  Given the age of the record in this proceeding, the new faces at the FCC, and the guidance that will be coming from the Supreme Court decision, there are quite likely going to be additional comments filed in this proceeding before any final resolution takes place (see, for instance, the decision on Friday extending a temporary waiver for Fox to own two TV stations and a daily newspaper in New York through the end of the Quadrennial Review, apparently anticipating that further consideration will be given to the newspaper-broadcast cross-ownership rule if the Supreme Court does not itself uphold the 2017 FCC decision to abolish it).  So it may be some time until the FCC will have the opportunity to evaluate its radio rules to see if they can catch up to the marketplace realities identified by the Chairman in last week’s speech.

Courtesy Broadcast Law Blog

Here are some of the regulatory developments in the last week of significance to broadcasters -and a few dates to watch in the week ahead – with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC issued an order that locks in its authority to assess higher penalties against pirate radio operators and allows those penalties to be levied more quickly as the FCC does not need to first issue notice to the suspected pirate of its violation before imposing a fine. Under this authority granted by the PIRATE Act, operators of stations that do not have an FCC license could face fines of $100,000 per day, up to a total of $2 million.  Landlords who are found to have “willfully and knowingly” allowed pirates to broadcast from their properties can also be subject to penalties.  Two New York landlords this week received notices of illegal pirate radio broadcasting.  Read the letters, here.  We wrote about the PIRATE Act, here.  (Order)
  • The FCC’s new rules for voluntary all-digital AM radio, except new procedures for notifying the Commission of a station’s intent to transition from analog to all-digital operations which still need Paperwork Reduction Act approval, will go into effect on January 4, 2021. We looked at the new rules, here.  (Public Notice)
  • Nathan Simington was sworn in virtually by Chairman Ajit Pai as the newest FCC Commissioner. His term runs through June 30, 2024.  Commissioner Simington joins Ajit Pai and Brendan Carr to form the Republican majority that will hold until Pai leaves the agency on January 20, 2021.  Not much is known about the new Commissioner’s views on broadcast matters, but it is thought that he will favor deregulation.  The broadcast industry will be watching closely to see who he names to his staff and how familiar those people are with broadcast issues.  Simington can be found on Twitter at @SimingtonFCC.  (Commission Simington Bio)
  • Commissioner Pai, in a virtual speech to the Media Institute, reviewed the changes made during his watch in FCC broadcast regulations. He also called for further relaxation of the broadcast ownership rules.  He said these rules no longer make sense, as they restrict the growth of broadcasters, making it harder to compete for audience and advertisers with broadcasters’ new adversaries – the essentially unregulated tech giants.  These digital competitors are some of the biggest companies in the US economy and dwarf the size of the biggest broadcast company. (Pai Speech).  Look for our thoughts on those issues, particularly for the radio industry, on our blog on Monday.
  • In the latest step in the Supreme Court’s review of the FCC’s 2017 media ownership rules, Prometheus Radio Project and its partners submitted their reply brief arguing for the Court to uphold the Third Circuit Court of Appeals’ rejection of the 2017 rule changes. The Court will hear oral argument on January 19.  (Prometheus Brief).
  • In connection with the Supreme Court’s review, which could reinstate the FCC’s 2017 abolition of the newspaper-broadcast cross-ownership rules (a decision overturned by the Third Circuit’s opinion), the FCC extended Fox’s authority to operate two TV stations in New York City where a commonly controlled company operates a daily newspaper. The continuing authority would stay in effect at least until the Supreme Court releases its decision and, if the Court does not resolve the issue, until the FCC completes its next Quadrennial Review of the ownership rules assessing whether there is a continuing need for the newspaper cross-ownership rule. (Order)
  • New procedural rules for filing carriage complaints against multichannel video programming distributors (MVPD) go into effect on January 19, 2021. The new rules require a carriage complaint to be filed within one year of the event that triggers the complaint, not within one year of a party notifying the MVPD of its intention to file a complaint.  (Federal Register)

Looking ahead to next week, we will learn what items will be on the agenda for the Commission’s January 13, 2021 meeting and should see drafts of those items.  The January meeting will be Chairman Pai’s final Open Meeting and Commissioner Simington’s first.  There are also comments due by December 24 in two proceedings. By that date, interested parties should submit their comments on the FCC’s plan to enhance and standardize on-air sponsorship identification of programming provided to US stations by foreign governments.  Also due on December 24 are comments in the proceeding that seeks to clarify which TV licensee is legally responsible when simulcast programming from one licensee is broadcast on the subchannel of a station owned by another licensee, including programming that airs on a host station’s subchannel as the ATSC 1.0 “lighthouse” signal of another station that has converted to NextGen TV (ATSC 3.0).  We covered this issue in more detail, here.

Courtesy Broadcast Law Blog

Here are some of the regulatory 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.

  • The FCC, at the last of its monthly open meetings of 2020, voted to adopt new rules for Broadcast Internet (datacasting) services. The FCC clarified its rules for the annual ancillary and supplementary fees of 5% of a TV broadcaster’s revenue for leasing their spectrum to third parties.  The lessee’s revenue will not be included as part of the revenue subject to the fee unless the broadcaster and lessee are affiliated.  The Commission also decided to reduce the fees to 2.5% of the revenue from any noncommercial educational Broadcast Internet services that are provided by a noncommercial licensee.  Finally, the Commission retained its requirement that TV broadcasters who offer Broadcast Internet services offer at least one, free, over-the-air standard definition video signal.  (Report and Order)
  • At the same meeting, the FCC also voted to require electronic payment of fees for activities administered by the Media Bureau. Noting infrequency of payments by check and the cost savings of eliminating processing those payments, the Commission will phase out its lockbox used to accept manual payments and will instead require payment of Media Bureau fees by credit card or electronic wire transfer.  This rule change takes effect 30 days after it is published in the Federal Register, though the lockbox will remain open for 90 days past that effective date.  (Order)
  • The FCC terminated its proceeding that asked if a TV channel in each market should be set aside for use by unlicensed wireless devices and wireless microphones. Microsoft and others argued for a vacant channel in each market, saying that the certainty of available spectrum would spur innovation and development of wireless devices.  Television broadcasters argued against the proposal, saying that losing another channel in the UHF band would harm broadcasters’ ability to deliver new services and roll out NextGen TV (ATSC 3.0).  The Commission acknowledged that due to the reduction of channels after the incentive auction and because of other actions it has taken over the last few years making spectrum available for unlicensed wireless uses, setting aside a vacant channel in every market was not necessary.  See our post, here.  (Report and Order)
  • The Senate voted this week to confirm Nathan Simington as the newest FCC Commissioner. Simington takes Commissioner Michael O’Rielly’s spot.  When Chairman Ajit Pai leaves the agency on Inauguration Day, the FCC will stand at two Democrats and two Republicans, depriving President Biden of a majority at the agency until a new Democratic Commissioner is confirmed, potentially delaying action on controversial matters that the a Chairman may want to pursue.  See our post on Commissioner Simington, here.
  • Two actions this week by the FCC give examples of the circumstances under which construction permit extensions will be granted or denied.
    • The Audio Division dismissed a petition filed by a California AM permittee that sought to have its construction permit deadline extended. After extensions in the construction deadline due to COVID-19 issues, the permittee asked the FCC to further pause the deadline due to continuing COVID issues and the poor air quality from wildfires that the permittee claimed interfered with construction.  The FCC found that the station had not submitted any proof of any construction progress, and it could not tie that lack of progress to any of the causes that it cited.  The Commission noted that COVID did not justify additional extensions as the State of California considers broadcast services and construction essential critical infrastructure not subject to COVID restrictions.  As the permittee could not show that there were extraordinary circumstances that prevented all construction progress, the FCC found that the construction permit has expired.  (Letter)
    • The FCC dismissed a petition by a Florida noncommercial permittee that asked for its construction permit to be reinstated after several extensions had been granted and passed without the station being constructed. Since 2015, the permittee received construction extensions based on hurricanes and the elimination of the main studio rule.  The permittee asked for a further extension to review new construction plans.  The FCC denied that further extension as the permittee, despite requests from the FCC to tie the potential change in construction plans to hurricane-caused delays, never did so.  As the permittee could not show that it had been making real efforts to construct the station or that its efforts were delayed by extraordinary circumstances, the FCC refused to reinstate the permit.  (Order on Reconsideration)
  • The House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act), which would decriminalize marijuana at the federal level. To become law, the bill would also have to pass the Senate and be signed by the President before the end of the current Congressional session in early January—which appears unlikely.  Thus, broadcast stations should continue to think twice about running any marijuana advertising on the air.  We wrote about the MORE Act, here.

Courtesy Broadcast Law Blog