Here’s a quick briefing on the legal and regulatory proceedings affecting broadcasters from communications attorneys David Oxenford and David O’Connor. The topics: Aereo … CALM Act … Closed Captioning … EEO Rules … Emergency Information … FCC Application Forms … Filing Freeze … Foreign Investment in Broadcasting … Incentive Auction … Indecency … Joint Sales Agreements … License Renewals … LPTV Stations … Network Nonduplication/Syndicated Exclusivity … Online Public Inspection Files … Ownership Limits … Ownership Reporting … Political Broadcasting … Public Interest Programming Disclosure … Retransmission Consent/Must Carry … Sponsorship ID … Sports Blackout Rules … Tower and Antenna Issues … UHF Discount … Video Descriptions … White Spaces.
Another quarter has passed, and the FCC has been busy working on the incentive auction and other issues impacting TV broadcasters. Keep up to date with FCC Watch, an exclusive briefing on some of the major issues at the agency prepared by David Oxenford and David O’Connor, attorneys in the Washington law offices of Wilkinson Barker Knauer LLP. You can reach Oxenford at [email protected] or 202-383-3337 and O’Connor at [email protected] or 202-383-3429.
In alphabetical order:
We previously reported on the Supreme Court’s June 25 ruling that Aereo infringes on broadcasters’ public performance rights. Read our summary of the decision here. Broadcasters and Aereo continue to argue in the lower courts over various issues, including Aereo’s contention that it should be able to carry television signals under the compulsory license for cable television systems. Meanwhile, the US Copyright Office on July 16 ruled that Aereo does not appear qualify for a compulsory license as a cable system under the Copyright Act. As a result, the Copyright Office stated that it “will not process Aereo’s filings at this time.” Read our thoughts on these copyright issues and the potential that Aereo could end up having to negotiate retransmission fees here.
Will the FCC decide to wade in by deciding to treat online video services like cable companies? Chairman Wheeler said recently it’s an idea being kicked around, but that he’s “not ready to plant the flag.” However, the FCC seems to at least be considering it as they did this past week designate the proceeding debating the issue of whether to treat non-facilities based video providers (i.e., those that don’t own their transmission plant such as those that deliver their programming through the Internet) a “permit but disclose” proceeding, opening it to FCC lobbying as long as summaries of all meetings and other contacts are filed in the record. Stay tuned for more potential action on this issue at the FCC in coming months, as well as related actions in the courts and potentially in Congress next session.
CALM Act/Loud Commercials
The CALM Act, meant to end the dreaded “loud commercial” on TV, went into effect in December 2012. TV stations with more than $14 million in revenue in 2011 were required to complete their first annual “spot checks” of embedded advertisements in uncertified programming by Dec. 13, 2013. See our summary of CALM Act requirements here and here.
In 2013, Acting Chairwoman Mignon Clyburn advised Congress that the FCC is monitoring complaints related to loud commercials, and suggested that if a particular station receives a sufficient number of complaints, the FCC will issue a Letter of Inquiry regarding the station’s CALM Act compliance. So stay tuned for possible enforcement actions related to the CALM Act.
In June, the FCC adopted minor revisions to the CALM Act rules, in recognition of changes to the technical standards that were adopted by the Advanced Television Standards Committee. Broadcasters must comply with the new standards by June 4, 2015. For more information, click here.
TV Closed Captioning
In February, the FCC adopted significant new closed captioning obligations for broadcasters, which will be phased in over time. To begin with, the FCC clarified that the closed captioning rules apply to mixed English-Spanish programming, to on-demand programming, and to low power TV stations. The FCC also clarified that snippets of English or Spanish on programs that are otherwise in a different language do not need to be captioned.
In addition, as of June 30, broadcasters utilizing the Electronic Newsroom Technique (ENT) must ensure that most news programming is scripted for the teleprompter (and therefore captioned), and must utilize crawls and other visuals to provide visual access when ENT is not used. See this article here for further information.
The FCC also has imposed stringent new “quality” standards for captioning, in four distinct areas: 1) accuracy; 2) synchronicity with the words being captioned; 3) caption completeness from the beginning of a program to its ending; and 4) caption placement so that the caption text does not obscure other important on-screen information. These quality standards will take effect no earlier than Jan. 1, 2015, but may be delayed depending on the OMB approval schedule.
In the Further Notice portion, the FCC asks a number of questions about methods to assess compliance with the new requirements, among other issues. Reply comments in that proceeding were due Aug. 8.
At the same time, the FCC has been restricting the waiver process for closed captioning under the “undue economic burden” standard. That standard is significantly higher than in previous years. The FCC has been reviewing the captioning waivers and issuing public notices soliciting comments. Consumer groups have actively opposed the waiver requests. So far the commission has dismissed a number of requests as deficient, and sought additional information from others, but to date it has not issued any substantive decisions on these waiver requests.
In January 2012, the FCC adopted rules that require closed captioning of certain full-length video programming delivered via Internet protocol (i.e., IP video). The rules are a result of the 21st Century Communications and Video Accessibility Act (CVAA) federal law designed to improve the accessibility of media and communications services and devices.
The IP captioning rules became effective in 2012 and have been phased in over time, with the final requirement taking effect in December 2013. All nonexempt full-length prerecorded video programming that is not edited for Internet distribution and is delivered using Internet protocol, and all live or “near live” programming, must be provided with closed captions if the programming was published or exhibited on television in the United States with captions on or after Sept. 30, 2012. All prerecorded programming that is substantially edited for the Internet must be captioned if it is shown on TV with captions on or after Sept. 30, 2013.
These requirements govern cable systems, TV stations, broadcast and cable networks and virtually every other professional video program producer who is now, or will be in the future, making programming available online, to the extent that the programming is also exhibited on TV.
The rules also impose new requirements on manufacturers of equipment (such as set-top boxes, PCs, smartphones DVD players, Blu-ray and tablets) designed to receive or play back video programming transmitted simultaneously with sound and integrated software. Consumer-generated media — defined as content created and made available by consumers to websites and services on the Internet, including video, audio and multimedia content — are exempt from the captioning rules.
For further information, see our blog entry here.
Brief video clips and outtakes (including excerpts of full-length programming) have been exempt from online captioning obligations, unless “substantially all” of a full-length program is available via IP video in multiple segments. However, at the July 11 open meeting, the FCC commissioners decided to remove this exemption, adopting a phased-in transition to IP captioning for clips used on a station’s website or in its mobile app. Clips taken directly from TV must be captioned by Jan. 1, 2016, with “montages” of multiple clips from captioned TV programs due to be captioned online by Jan. 1, 2017, and clips from live and near-live programming to be captioned by July 1, 2017. The FCC will also be seeking comments in a Further Notice of Proposed Rulemaking as to how to deal with clips of captioned TV programs that are contained in a “mash-up” with other content that has not been broadcast on TV, whether the grace period provided for live and near-live clips should be phased out over time, and whether to extend the captioning rules to clips that run on third-party websites or apps. Comments in that proceeding are due Oct. 6, with replies due Nov. 3. For background, see our summaries here and here.
The FCC continues to enforce its EEO rules by randomly auditing 5% of all broadcast stations annually, as well as through the review of Form 396, which summarizes a station’s EEO performance in the two years prior to the filing of a station’s license renewal filing. A new round of random EEO audits focusing on radio stations was announced in June. Read our summary here.
The FCC has issued fines to stations that did not widely disseminate information about job openings beyond broadcasting announcements on the station’s airwaves and posting the opening on the station website, and using online sources. In doing so, the FCC held that other non-station, non-Internet recruiting sources (such as newspaper publication or notices to community organizations) must also be used to announce job openings. The FCC has also recently fined stations that did not regularly send notices of job openings to community groups that had requested such notices, as required by the rules.
In March, the FCC released a proposal to mandate multilingual emergency alerts by broadcast stations. All primary EAS stations would be required to broadcast national alerts in both English and Spanish, and state EAS plans would be encouraged to designate stations to provide emergency information in other languages where there are significant populations that have a primary language other than English or Spanish. English language stations in these areas would also be required to play a back-up role, ready to step in and provide emergency information in one of these languages should the primary station serving a particular non-English speaking population be forced off the air. Reply comments on this proposal were due June 12. See our summary here.
In June the FCC released a Notice of Proposed Rulemaking which proposes EAS rule changes to address problems encountered during the first nationwide test of the EAS in 2011. Specifically, the proposal would (1) establish a national location code for EAS alerts issued by the president and a national EAS test code; (2) require broadcasters and others to file national EAS test result data electronically; and (4) require participants to meet minimal standards to ensure that EAS alerts are accessible to all members of the public, including those with disabilities. The notice also indicates that the proposed rule changes are necessary to facilitate another nationwide EAS test in the near future. Reply comments in this proceeding were due August 29.
In April 2013, the FCC released an order requiring that emergency information provided in video programming be made accessible to individuals who are blind or visually impaired. The order requires the use of the secondary audio stream to convey televised emergency information aurally, when such information is conveyed visually during programming other than newscasts (e.g., in an on-screen crawl). These requirements will take effect on May 26, 2015.
For more on Emergency Alert Service issues, see our Broadcast Law Blog article here and here.
For information about other concerns for stations delivering emergency information, see our article here where we talked about these issues in connection with the approach of Hurricane Sandy, reminding stations of their obligation to provide visual as well as audio information about imminent threats to assist the hearing-impaired during emergencies.
You may also have heard about broadcast EAS systems being hacked, producing so-called “zombie alerts.” The hacking of station EAS systems showed that the new EAS CAP system, which relies on Internet connections, may be vulnerable to such attacks. The FCC issued reminders to stations to ensure that the password settings on CAP equipment are changed from their default factory settings, and that EAS messages are monitored carefully. See our article here for more information.
Finally, the FCC has essentially adopted a strict liability standard for the use of EAS tones (or even EAS tone simulations) in non-emergency situations. In 2014 alone, the FCC has proposed more than $2.2 million in fines for false EAS alerts embedded in movie trailers and other commercials. See our summary here.
FCC Application Forms
As if there’s not enough going on, the FCC has decided to roll out a replacement electronic filing system for broadcasters. The beloved — or hated — Consolidated Database System (CDBS), which has been around since the 1990s, will be gradually replaced by the Licensing and Management System (LMS) in the next year or so. First to go are the FCC Form 301 construction permit application and FCC Form 302-DT license application for TV stations. Perhaps this was an easy lift, given that there is a filing freeze for most TV applications (see below), so the number of people filing these forms is probably low anyway. Instead of filing these forms, as of Oct. 2 an applicant must file an FCC Form 2100. Information specific to particular types of applications will be submitted in schedules — currently Schedule A is the old 301 information and Schedule B is the old 302 information. The new form and schedules are being rolled out just in time for hundreds of broadcasters to file numerous applications as part of the incentive auction repacking process that may unfold in the next year or so.
On April 5, 2013, the FCC imposed an immediate freeze on most full-power and Class A television modification applications, including many of those that were already pending as of April 5, in order to “facilitate analysis of repacking methodologies and to assure that the objectives of the broadcast television incentive auction are not frustrated.” The FCC staff will entertain waivers of the freeze on a case-by-case basis. For more on the freeze, see our Broadcast Law Blog article here.
In the Incentive Auction decision discussed below, the FCC announced that the Media Bureau would begin processing modification applications that had not been approved by the time the freeze went into place on April 5, 2013; however, the facilities authorized in any resulting construction permits will not be protected in any repacking of broadcasters.
On June 11, the FCC also imposed a freeze on the filing of replacement translator applications and displacement applications for Class A, LPTV, and TV translator stations. See our summary here.
Foreign Investment in Broadcasting
For many years, Section 310(b)(4) of the Communications Act has limited foreign ownership in a broadcast licensee to 20% of the company’s stock, and no more than 25% of a licensee’s parent company stock. In response to a pleading filed by the Coalition for Broadcast Investment, the FCC sought comment on these foreign ownership restrictions. See our summary here.
In November 2013, the FCC issued a Declaratory Ruling clarifying policies and procedures under which it would allow broadcast licensee to exceed those caps. An applicant needs to file a petition for declaratory ruling, asking for FCC consent to an increased level of foreign ownership.
Parties seeking to exceed the cap must file a petition for declaratory ruling which details the foreign ownership being proposed. The petition needs to set forth the public interest benefits of the transaction, and demonstrate why the alien ownership would not jeopardize any of the security interests of the United States. The FCC will allow for public comment on the petition, and review by Executive Branch agencies for national security implications prior to any grant. See our summary of the Declaratory Ruling here.
In the first filing under this new policy, Pandora last month filed a petition for declaratory ruling that its ownership does not violate the alien ownership prohibitions. This will likely be the first test of the FCC’s theoretically more flexible approach to broadcast ownership. See our summary here.
In 2012, a new federal law was enacted to permit the FCC to conduct an incentive auction to clear parts of the TV band for wireless broadband uses. A summary of the statutory provisions governing the incentive auction process is available here.
At its open meeting in May, the FCC adopted a number of new rules to govern the incentive auction and subsequent repacking of broadcasters. The order was released on June 2, and on Aug. 18 the NAB sought review of the decision in the DC Circuit Court of Appeals. Sinclair Television filed a separate appeal of the decision on Sept. 15. The briefing schedule is likely to take this court proceeding well into 2015, but in the meantime the FCC says it is moving forward with its incentive auction plans. Separately, more than 30 groups filed petitions for reconsideration of various aspects of the incentive auction order on Sept. 15.
While the details of the FCC’s order are too complicated to summarize here, some major themes have emerged. First, the FCC adopted a new band plan for the 600 MHz band. The uplink band for mobile broadband will start at ch. 51 (698 MHz) and proceed downward, followed by an 11 megahertz (MHz) duplex gap, then the downlink band for mobile broadband, then a 7-11 MHz guard band, and below that (possibly starting at ch. 36), the broadcast TV band. In other words, the “UHF band” for TV may be only chs. 14-36, and possibly even less than that after the auction is over, depending on demand.
In the reverse auction, full power and Class A stations can bid to (i) relinquish their licenses; (ii) move from a UHF to a VHF channel (specifying either the low VHF or high VHF band); (iii) channel share; or (iv) move from a high VHF channel to a low VHF channel. Broadcasters must submit pre-auction applications. The FCC will withhold the identity of bidders (except winning bidders in the reverse auction) for two years following the announcement of the results of the reverse auction and the repacking process. The reverse auction will have a “descending clock” format, with a high price initially that will be reduced each round. Stations will be offered prices for one or more bid options. Bidders can specify the prices at which they want to choose a different option or drop out. The forward auction will auction the spectrum given up by broadcasters in the reverse auction to mobile broadband licensees.
Following the reverse and forward auctions, TV stations will be subject to a repacking in light of the new band plan. The repacking will make reasonable efforts to preserve a TV station’s viewers, and will not allow a station to cause more than 0.5% new interference to another; however, the FCC has not imposed any caps on aggregate interference caused to stations. In addition, interference protection applies only to station facilities in operation as of Feb. 22, 2012, although some exceptions apply. The FCC anticipates completing the repacking of non-participating broadcasters quickly — within 39 months of completing the auction, but some stations may have even less time. This issue, like many other issues addressed in the decision, has been delegated to the various FCC bureaus for further decisionmaking later this year.
The FCC will compensate TV stations for a portion of the costs of repacking, up to $1.75 billion. On Sep. 25, the FCC released a public notice seeking comment on a draft “TV Broadcaster Relocation Fund Reimbursement Form.” Comments on the form are due Oct. 27. See our summary here.
The FCC’s proposed use of various updates to its OET-69 TVStudy software has also been controversial. This software will be instrumental in analyzing the interference protection contours of repacked stations, the details of which have yet to be revealed. On June 26, the FCC released various interference simulations, which are available here. The NAB has suggested that there are possible errors in the simulations, producing anomalous results. On Sept. 30, the FCC released a Declaratory Ruling in an effort to clarify some of the OET-69 interference protection issues. See our summary here.
On Oct. 1, the FCC released an economic report prepared for it by Greenhill & Co. which attempts to estimate the expected maximum and median prices for stations participating in the incentive auction. With figures of nearly $500 million or more in the largest markets, the report has certainly become a topic of discussion among broadcasters, but it remains to be seen whether the report’s numbers are realistic. A copy of the report is available here. For more information about the report, and what it might mean for individual broadcasters, see our summary here.
While the FCC continues to clarify a number of auction-related issues, there are many open questions that will need to be resolved through further decisions at the bureau level, and potentially at the commission level. The process has become far more complicated given the pending court challenges and the numerous petitions for reconsideration that are now pending. All of these issues will continue to be must-watch items for broadcasters well into 2015.
In 2012, the Supreme Court ruled that the FCC had not given adequate notice of a change in its indecency rules before issuing fines for fleeting expletives. While that decision threw out the fines issued to two networks and their affiliates for the Billboard Music Awards and an episode of NYPD Blue, it did little to clarify the FCC’s indecency enforcement regime. Nonetheless, the FCC has been quietly disposing of thousands of complaints in an effort to reduce the backlog.
According to the latest information from the FCC, as of April 2013, the FCC had reduced the backlog of complaints by dismissing 70% of all complaints — over a million. While this leaves hundreds of thousands of complaints to be resolved, the FCC has asked for comments as to whether it should continue to apply the hard-line enforcement standard against fleeting expletives that was adopted by the FCC nearly a decade ago, or whether it should go back to the old standard that required a more conscious and sustained use of expletives to warrant FCC action. Reply comments in this proceeding were due Aug. 2, 2013. In the meantime, the FCC seems to be making a more concerted effort to dispose of long-pending complaints.
Joint Sales Agreements
On April 14, the FCC released its 2014 rulemaking proceeding on broadcast multiple ownership issues. Among the most controversial aspects in the docket was a decision to make Joint Sales Agreements attributable where one TV broadcaster sells more than 15% of the ad time on another station in its market (meaning that such JSAs are only permissible if the stations can be commonly owned). Existing non-compliant JSAs will need to be amended or terminated within 2 years. The FCC has adopted a waiver process which would allow JSAs to continue on a non-attributable basis under certain circumstances. See the Ownership Limits section below for additional information about this proceeding.
The NAB and others have challenged the new rules in court. One of the major initial issues is whether the D.C. Circuit, which has been viewed previously as a broadcaster-friendly venue, will get the case, or whether the Third Circuit in Philadelphia, which has been seen as being more hostile to efforts to relax the ownership rules, will end up with the case. The parties are currently arguing this issue before the argument on the merits of the appeals will be heard. Thus, don’t expect resolution of this appeal until sometime in 2015.
Television stations (including LPTV stations, TV translators and Class A stations) began the renewal process in 2012. The next set of TV license renewals that are due to be filed are for TV stations in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, which must file their renewal applications by Dec. 1.
In reviewing license renewals, the FCC is continuing to focus on issues that have been important in previous cycles, such as public inspection file issues. The failure to timely file FCC Form 398 reports on children’s television programming has been a source of many fines to TV stations during the renewal process. In addition, the online nature of public files now makes it very easy for FCC staff to verify the timeliness (or untimeliness) of station uploads to the public file. See our article here about some of those fines.
This renewal cycle also introduced a few new certifications, including whether a station has been off the air for any significant period of time during the last license term, and whether stations have complied with the policy regarding nondiscrimination in the sale of advertising time.
The FCC no longer mails reminders to licensees, so it is incumbent upon stations to know when their license expires and file their renewal applications on time. Without a timely filed renewal application, stations are not authorized to operate and face the potential of fines or license cancellation.
LPTV Stations and TV Translators
All LPTV stations and TV translators operating out-of-core (on channels above ch. 51) were to have ceased operations by the end of 2011. All analog LPTV and translator stations must convert to digital operations by Sept. 1, 2015. However, the FCC has indicated that it may revisit that deadline in light of the planned Incentive Auction discussed above. In July, the Media Bureau issued a public notice asking for comments on a proposal to extend all existing permits for new digital LPTV or TV translator stations that expire before Sept. 1, 2015 until that date. Reply comments in that proceeding were due Aug. 29. See our summary here.
In June, the FCC announced an immediate freeze on the filing of displacement applications for LPTV and TV translator stations, as well as displacement applications for Class A TV stations. See our summary here.
In the Incentive Auction order discussed above, the FCC concluded that LPTV and TV translator stations, including digital replacement translators (DRTs), will not be protected in the repacking process. However, once primary stations relocating to new channels have submitted construction permit applications and have had an opportunity to request alternate channels or expanded facilities, the Media Bureau will open a special filing window to offer displaced LPTV, TV translator, and DRT stations an opportunity to select a new channel.
The future of LPTV remains uncertain given the incentive auction and repacking of full power TV stations into a smaller swath of spectrum. Whether there will be sufficient spectrum for LPTV after the repacking remains one of the great unknowns about the incentive auction. The FCC intends to address LPTV issues further at its October meeting, so stayed tuned. The October meeting may also include consideration of a public notice suspending the expiration dates and construction deadlines for all outstanding unexpired construction permits for new digital LPTV and TV translator stations.
Network Nonduplication/ Syndicated Exclusivity
See the Retransmission Consent discussion, below for a description of the FCC’s new proceeding asking if it should abolish network nonduplication and syndicated exclusivity protections.
Online Public Inspection File
Since February 2013, TV stations have been required to place their public inspection files online using an FCC-hosted website. Letters and emails from the public should not be posted online for privacy reasons. For a summary of the general online public file obligations, see our summary here.
As of July 1, all TV stations are required to upload political file materials on a going-forward basis. Previously this rule only applied to top 4 stations in the top 50 markets. For a summary of these obligations, see our article here with a link to slides from a presentation we did on this subject. Objections to the recordkeeping done by 11 big-market TV stations were filed by the Sunlight Foundation. See a further discussion of that filing in the Political Broadcasting section below.
The obligation to post the political file online went into effect for all TV stations despite a pending rulemaking which sought comment on the burdens of maintaining a political file online. Last year, the FCC Media Bureau released a Public Notice seeking comment on the impact of the online political file requirements applicable to broadcast television stations. The bureau also sought comment on the ability of stations to comply with the July 1 deadline. Finally, the bureau sought comment on a petition which argued that the disclosure of spot-by-spot political rate information is not in the public interest, and that the disclosure of this sensitive price information is anti-competitive, disrupts markets, and is not required by campaign finance laws. See our summary here. This proceeding remains pending.
Meanwhile, the FCC has proposed expanding the online public file requirements to cable and satellite television systems, as well as broadcast radio licensees. See our article here for our summary of the proceeding looking to expand the online public file obligations.
Ownership Limits/Shared Service Agreements
Every four years, the FCC is required by Congress to review and possibly update its broadcast multiple ownership rules. The last review was initiated in 2009 but was ultimately abandoned late last year. In its place, the FCC announced the 2014 review at its March 31 meeting. The new item essentially folded in most of the 2009-13 issues, and also adopted new restrictions on Joint Sales Agreements and the joint negotiation of retransmission consent agreements, as discussed above in the Joint Sales Agreement section and below in the Retransmission Consent discussion.
Unlike Joints Sales Agreements, the FCC indicated that there was insufficient information in the record to regulate shared services agreements (SSAs), which are frequently used by stations to share various facilities and equipment. However, the FCC is proposing a new requirement that broadcasters disclose any SSAs to which they are a party. The Media Bureau has also imposed a new processing policy requiring disclosure and review of all new SSAs that are to begin following any sale of a station. A copy of the processing policy can be found here. The NAB appealed the new processing guidelines, but on Sept. 9 the DC Circuit dismissed the appeal on largely procedural grounds.
There are numerous other proposals and tentative conclusions reached in the new 236-page decision. Of relevance to TV stations are the proposal to retain the local TV ownership rule, the newspaper/broadcast crossownership ban (with the possibility of case-by-case waivers), and the dual network rule. The only items up for possible relaxation are the newspaper/radio cross-ownership rule and the TV/radio crossownership rule. Reply comments on the commission’s proposals were due on Sept. 8. However, no action on any of these proposals is expected until June 2016, according to Chairman Wheeler.
The FCC has also a pending proceeding to examine the UHF discount as applicable to the national television ownership caps. That proceeding is described in more detail below.
The FCC currently requires all commercial broadcasters, including all television stations and LPTV licensees, to file a biennial ownership report on an established date once every two years. The next set of commercial ownership reports will be due in December 2015.
Meanwhile, the FCC has issued a Notice of Proposed Rulemaking asking several questions about these reports. Among the issues raised is whether it should require that every individual with an attributable interest in any station (and perhaps certain nonattributable owners) to get a unique FRN — a unique identifier for the FCC’s electronic systems. This would require that the attributable owner provide to the FCC its Taxpayer Identification Number (for an entity) or his or her Social Security Number (for an individual).
The FCC also sought comment on whether biennial ownership reporting requirements should include interests, entities and individuals that are not attributable because of (a) the “single majority shareholder” exemption and (b) the exemption for interests held in eligible entities pursuant to the higher “equity debt plus” threshold. Reply comments in this proceeding were due March 1, 2013. See our summary here.
As stated above, the FCC now requires that the political file of all TV stations be maintained as part of their online public inspection file. Complaints have been filed by the Sunlight Foundation against 11 large market stations alleging that their files were incomplete. See our summary of the complaints here. Those complaints remain pending.
Sunlight also filed complaints against two other stations alleging that they did not adequately disclose the true sponsor of PAC ads. The complaints alleged that the sponsorship identification of the PAC that sponsored ads attacking political candidates was insufficient when the PAC was essentially financed by a single individual. In September, the Media Bureau dismissed the complaints. However, the bureau did not specifically find the allegations to be incorrect. Instead, the complaints were dismissed because petitioners never went to the stations to ask that they change the sponsorship identification on the PAC spots during the course of the election. The bureau stated that it was using its prosecutorial discretion not to pursue these complaints, going so far as to say that the ruling might have been different had the request for a proper identification been made to the stations during the course of the election. Thus, broadcasters should be on the alert for complaints alleging that they have not properly identified the true sponsor of a PAC ad, and treat such ads seriously. See our summary here.
These complaints are related to efforts by some members of Congress to expand various disclosure requirements for issue advertisers. For example, it has been suggested that the FCC should require stations to collect more information on the sponsors of these ads — including not only the identification of the governing board of these groups, but also the source of funding for the organizations. See our article on the issues that came up in a congressional hearing last year, here.
2014 is a federal election year, with the House of Representatives and one-third of the U.S. Senate seats to be filled. It is also a big year for state and local elections in many jurisdictions, and already we are seeing significant inflows of third party cash. The Supreme Court’s recent decision in McCutcheon v. FEC struck down the aggregate donation limits by individuals, based on First Amendment grounds. As a result, we could see increased expenditures in this mid-term election cycle. With the general election being held on Nov. 4, broadcasters need to be familiar with the political broadcasting rules. See our Guide to Political Broadcasting here. In addition, the NAB has released the 18th edition of its Political Broadcast Catechism that answers a number of political advertising questions. While we can’t summarize all of the political advertising rules here, there are a few key concepts, including:
Once you have a legally qualified candidate for federal office, the reasonable access obligations are triggered. Reasonable access requires that broadcasters sell reasonable amounts of commercial airtime, during all classes and dayparts, to federal candidates. While reasonable access only applies to federal candidates, almost all of the other political rules apply to all candidates — including those for state and local offices, once the station decides to make time available for those races. So, while you don’t have to sell advertising time to candidates for state and local candidates like those running for governor or mayor, once you do, equal opportunities, no censorship and lowest unit charges apply in the same way that they do to federal candidates. See our refresher on reasonable access here.
Stations also need to be careful about on-air employees who decide to run for some local office, as their on-air appearances will trigger Equal Opportunities rights for their opponents. See our story about a recent case of a radio sportscaster who decided to run for mayor and the issue that it raised under the political broadcasting rules, here.
In many contentious races, you may see third-party ads from SuperPACs and other non-candidate organizations. These organizations may also be buying ads on other controversial issues before Congress or in local areas, and may raise many of the same issues that are raised when they advertise in political races.
Because third-party advertising does not provide the same liability protections that candidate ads provide, stations need to be concerned with such ads. While stations are generally immune from any liability for statements made in candidate ads, there is potential liability if the station is put on notice of defamatory content or other illegal material in non-candidate ads. See our article about these issues, here.
As noted above, candidate ads are covered by the “no censorship” provisions of the Communications Act. Thus, as long as the ad is a “use” by the candidate (i.e., it is sponsored by the candidate’s official campaign committee, and features the candidates “recognizable voice or image,” the spot cannot be rejected based on its content, and the stations cannot (except in very limited circumstances not relevant here) take it down at the request of a complaining opponent. We have already heard of numerous requests for take-downs of candidate ads in races across the country, so stations need to be aware that they usually cannot honor those requests, even if the broadcaster does not like the content of the candidate’s ad. We wrote more about the no censorship rule here.
Public Interest Programming Disclosure
In 2012, the FCC received comments on a Notice of Inquiry, looking for a standardized disclosure form that would replace the previous FCC Form 355, a form adopted by the commission in 2007, but which was never approved by the Office of Management and Budget under the Paperwork Reduction Act. Such a form would replace the current issues/programs lists, to detail the public service programming provided by TV stations.
The NOI asked for comment about the burden that would be imposed on broadcasters if they were required to report detailed information about the amount of local news, public affairs and electoral programming, as well as information about local emergencies, that they broadcast on specified days selected at random by the FCC.
Parties were also to comment on the public interest benefits of such reporting. Any collected information would go into the online public file which the FCC recently required for TV stations. Now that the pleading cycle has ended, the FCC could take action on this item at any time.
A summary of the FCC’s proposals is here.
Retransmission Consent/Must Carry
TV stations were required to have elected must carry or retransmission consent by Oct. 1. This election covers the period from January 1, 2015, to December 31, 2017.
In 2011, the FCC issued a Notice of Proposed Rulemaking seeking comments on whether its must carry-retransmission consent regime should be modified. The NPRM was driven in part by complaints by certain members of Congress expressing concern when channels are blacked out on MVPDs (multichannel video programming distributors) during the course of retransmission consent negotiations.
In April, the FCC issued an order which declined to adopt most of the proposals set forth in the NPRM; however, it did adopt a new rule prohibiting the joint negotiation of retransmission consent agreements by two stations in the same market that are not commonly owned, if both of the stations are among the top 4 stations in the market. See our summary here. Sinclair Television filed an appeal of the April decision on May 29, and that appeal remains pending.
A related Further Notice of Proposed Rulemaking proposes getting rid of the network nonduplication protection rules and the syndicated exclusivity rules. The abolition of these rules could affect the retransmission consent negotiation process, by allowing multichannel video programming distributors (MVPDs — cable and satellite TV) to replace the programming of a television station that does not agree to proposed retransmission consent fees with the signal of another distant television station carrying the same programming. Reply comments were due July 24. See our discussion here for more details of the proceeding.
Congress has also been considering these issues, as it evaluates a possible reauthorization of the Satellite Television Extension and Localism Act of 2010 (STELA). The Commerce and Judiciary committees in both the House and Senate have passed STELA renewal legislation, but the varying language in the bills will need to be reconciled. Many in Congress view this legislation as must-pass legislation because the provisions of STELA will expire on December 31, 2014. Watch for this debate to play out in a lame-duck Congress.
The FCC continues to enforce its sponsorship ID rules vigorously. In February, a Chicago radio station was fined $44,000 for 11 missing sponsorship ID tags. See our summary here. As set forth above in the Political Broadcasting discussion, the FCC recently acted on a complaint against two TV stations over the identification of the sponsor of ads attacking political candidates, alleging that the identification of the PAC that sponsored the ad was insufficient when the PAC was essentially financed by a single individual. See also the sponsorship ID discussion in the political advertising section above.
Video News Releases
The FCC has issued fines to television stations for airing freely-distributed video news releases without identifying the party who provided the VNR, and for broadcasting other programming for which the station or program host received consideration that was not disclosed.
For political matter or other programming on controversial issues, the station must announce who provided any tape or script used by the station.
For commercial programming, if the station airs content provided by a commercial company, and that use features the product of the company in more than a transient or fleeting manner, the party who provided the content must be disclosed.
A summary of some of the FCC cases where stations were fined for VNRs is available here.
Other Sponsorship ID Issues
The FCC issued an NPRM in 2008, proposing, among other things, to require the sponsorship identification of embedded content and product placement at the time that the product is shown on the TV screen. That proceeding is still unresolved.
A summary of the FCC’s proposals is available here.
Sports Blackout Rules
In September, the FCC commissioners voted unanimously to eliminate the 40-year-old sports blackout rules. The rules previously prohibited cable operators, DBS operators and open video system (OVS) operators from retransmitting, within a protected local blackout zone, the signal of a distant broadcast station carrying a live sporting event that is not available live on a local television broadcast station. The effective date of this rule change was not available as of the date of this article, but it is expected that many of the same restrictions on local carriage of NFL games when the game is not sold out will be included in contracts with the league, instead of by FCC rule.
Tower and Antenna Issues
The FCC continues its aggressive enforcement of tower lighting and other tower-related violations, in one case seeking a fine of $25,000. Tower owners have been penalized for failing to have the required tower lights operating after sunset, failing to notify the FAA of any outages in a timely manner (so that the FAA can send out a NOTAM — a notice to “airmen” notifying them to beware of the unlit tower), and failing to update tower registration information, particularly when the tower is acquired by a new owner. Failing to notify the FAA of tower light failures, as required by the rules, can lead not only to FCC fines but also to huge liability issues if the worst case happens and an aircraft should hit the unlit tower. We discuss many of these issues here.
Since 1985, in an effort to encourage further TV use of the UHF band (channels 14-51) over traditional VHF chs. (2-13), TV licensees have received a one-half discount for UHF stations when analyzing the FCC’s 39% cap on the nationwide audience that can be reached by any one owner. In a Sept. 26, 2013, Notice of Proposed Rulemaking, the FCC proposed abolishing the UHF discount in light of the DTV transition and the perceived superiority of UHF frequencies for digital operations. The proposal is not without controversy, with Commissioner Ajit Pai dissenting to the proposal to grandfather only existing station combinations and proposed combinations that were pending as of Sept. 26, and objecting to the failure to analyze the 39% nationwide cap in tandem with the review of the UHF discount. Reply comments in this proceeding were due Jan. 13. For a more detailed summary, see here.
The video description rules are intended to assist individuals with visual impairments by requiring the insertion of audio narrations into the natural pauses in programming to describe what is happening on-screen. These narrations are carried on the secondary audio program (SAP) channel.
Under the video description rules, top 4 affiliates in the top 25 markets, and multichannel video programming distributor systems (MVPDs) with more than 50,000 subscribers, must provide approximately four hours per week (for a total of 50 hours per quarter) of video-described primetime and/or children’s programming.
Beginning in by July 1, 2015, ABC, CBS, Fox and NBC affiliates located in the top 60 markets must begin providing 50 hours a quarter of video described programming.
The rules also require that all television stations and MVPDs, regardless of market or system size, “pass through” any such video-described programming. All of these requirements are now in effect.
In June, the FCC submitted a mandatory report to Congress on the status, benefits, and costs of video description in television programming as well as in IP-delivered programming.
White Spaces/Unlicensed Devices
On March 1, 2013, the FCC announced it had authorized all white space database administrators to provide service to unlicensed devices operating nationwide on the spectrum between TV stations. This announcement followed the launch of the FCC’s online registration system for unlicensed wireless microphones and other low power auxiliary devices.
In order to identify suitable vacant channels on which to operate without causing harmful interference to incumbent licensed television stations and other users, the unlicensed devices must include geo-location capability and the ability to access a database via the Internet. The FCC has authorized several database managers to manage those interference databases.
The incentive auction has created some uncertainty in the potentially white spaces device market. As part of the Incentive Auction order released in June, the FCC announced that unlicensed operations will be allowed in 14-28 MHz of guard band spectrum, in ch. 37 where it is not used by incumbents (subject to certain interference protection guidelines that have yet to be decided), and in unused TV spectrum, assuming there is any. In each TV market, one channel that is not assigned to a TV station following the repacking will be designated for use by TV white space (TVWS) and wireless microphones. Wireless Medical Telemetry Services (WMTS) and Radio Astronomy Service (RAS) will remain in ch. 37, and Broadcast Auxiliary Services (BAS) will continue to be authorized on a secondary basis in post-auction TV bands. Additional measures are being taken to facilitate wireless microphone use, with the details yet to be determined. Parties have filed petitions for reconsideration on many of these issues.
On Sept. 30, the FCC adopted a Notice of Proposed Rulemaking to further examine unlicensed device operations in the TV bands. The NPRM asks questions about how to improve TVWS databases, and raises numerous technical issues about unlicensed operations in this band. The comment cycle has not been announced for this proceeding yet.
The use of wireless microphone devices in the 700 MHz band was prohibited by the FCC in 2010. However, the 600 MHz band and other frequencies remain used by broadcasters and others for wireless microphones.
On Sept. 30, the FCC adopted a Notice of Proposed Rulemaking seeking comment on licensed and unlicensed wireless microphone needs. The FCC is exploring the potential for wireless mics to use digital technology and other methods to continue operating in current bands and additional bands, “so long as such use is consistent with long-term spectrum management goals and does not create likelihood of moving again.” The pleading cycle for this proceeding has not been announced yet.