TVNewsCheck‘s quarterly quick briefing on the legal and regulatory proceedings affecting broadcasters from communications attorneys David Oxenford and David O’Connor.
Recently a senior aide to FCC Chairman Tom Wheeler said that “if you’ve been enjoying a little break from the pace of Tom Wheeler’s FCC game plan the past three months, it’s time to lace up your cleats, strap on your shoulder pads and fasten your helmet. The second half is starting, and it promises to be as busy and as challenging as the first.” The incentive auction will be one of the key items heading into this period, and broadcasters will need to continue closely watching this issue, as well as a number of new FCC compliance requirements and other regulatory proceedings.
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:
Advanced Television Systems Committee (ATSC) standards are a set of standards developed for digital television transmissions. The current standards were adopted in the 1990s for the digital conversion. In recent years an effort has been underway to update and improve the standards through the adoption of ATSC 3.0. There appears to be growing momentum for a new, IP-based standard for television transmissions, with 4K capabilities, high efficiency video coding, and other major improvements.
ATSC 3.0 is expected to become a Candidate Standard later this year and progress to Proposed Standard status next year, with a new TV broadcast standard in place perhaps by early 2017. As the various elements of ATSC 3.0 unfold, broadcasters should be watching, including the timing of such a rollout and whether it might coincide with the repacking of stations that will ensue after the incentive auction (see the Incentive Auction section below for further details), and when the FCC will be asked to consider any regulatory changes needed to accommodate the new standard.
In February, the FCC issued a Notice of Proposed Rulemaking proposing to eliminate outdated rules in order to promote the conversion of analog remote pickup facilities to digital. The NPRM is available here. Reply comments were due April 20.
CALM Act/Loud Commercials
In 2011, Congress enacted the CALM Act with the aim of ending loud commercials on TV, and the FCC’s rules implementing the CALM Act went into effect in 2012. To comply, TV stations must use equipment that adheres to the A/85 standards adopted by the Advanced Television Standards Committee. See our summary of CALM Act requirements here.
As of June 4, 2015, broadcasters must be in compliance with the new ATSC A/85:2013 standard. For more information, click here.
The FCC has advised Congress that it 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.
TV Closed Captioning — As of March 16, the significant new closed captioning obligations for TV broadcasters became effective. These new “quality” standards for captioning include 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.
TV stations are required to use “best efforts” to obtain compliance certifications from their programming providers. In December 2014, the FCC asked whether program producers should themselves have legal obligations to provide quality captioning. Reply comments were due in January. For more on the new obligations for quality captioning and the FCC’s proposal to regulate program producers, see our article here. The FCC had previously asked a number of questions about methods to assess compliance with the new requirements, among other issues. A decision from the FCC on those issues could be issued later this year.
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 last March the Media Bureau denied a closed captioning waiver request filed by a church. In doing so, the bureau conducted a detailed analysis of the financial status of the church, and concluded that the church had adequate finances to pay for captioning, and thus a waiver was not warranted. Similar decisions were issued for three other church groups soon afterwards.
In November, the FCC reached the opposite conclusion for an Outdoorsmen Adventures program, finding that a captioning requirement would present an economic burden to the program producer. See our commentary here.
A similar waiver was issued to the producer of Exploring Alaska Native Voices in January. From these cases, it is clear that waivers will be granted only when they would put a burden on the overall financial health of a program producer, and not simply because the cost of captioning would cause the producer to lose money on the program itself.
Top 4 network stations in the top 25 markets have long been prohibited from using the Electronic Newsroom Technique (ENT) to caption their news and other live programming. While other stations can still rely on that technique, the FCC now requires stations to take additional actions with their ENT, including scripting in-studio produced programming, weather information, and pre-produced programming (to the extent technically feasible).
Live interviews and breaking news segments need to include crawls or other textual information (to the extent technically feasible). Stations must train news staff on ENT scripting and appoint an “ENT coordinator” accountable for compliance. See this article here for further information.
An FCC rule requires the broadcasting community to submit a report, prepared in conjunction with consumer groups, which details their experiences with the new ENT rules and the extent to which the new ENT rules have been successful in providing full and equal access to live programming on television. In June the FCC approved a 120-day extension of the deadline for submitting the report, so it is now due Oct. 28.
IP Captioning — In 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.
Under the rules, if programming is delivered using Internet protocol, whether it is prerecorded video programming, live or “near live” programming, it must be provided with closed captions if the programming was shown on television in the United States with captions. However, if the programming aired on TV before certain dates in 2012 and 2013, it may be exempt until it is shown again on TV (the dates will depend on the type of programming — e.g., live programming had a later phase-in date).
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, in July 2014 the FCC 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 is also considering the comments it received last fall in response to 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. For background, see our summaries here and here.
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. For further information, see our blog entry here.
In November 2014, the FCC issued a Notice of Proposed Rulemaking proposing to allow broadcasters to have greater flexibility in their disclosure of the material terms of contests which they conduct. The failure to broadcast the material terms of contests conducted by broadcasters have led to numerous fines in recent years. Under the proposal, broadcasters could disclose material contest information online in lieu of on-air announcements. Reply comments were due March 19, and there appears to be universal support for giving broadcasters greater flexibility in this area. Click here for further information.
Since four years have passed since the last license renewal cycle began, the obligations to file FCC Form 397 mid-term EEO reports have begun. These obligations arose for radio stations starting in June, and the Form 397 report obligation will begin to arise next year for TV stations. TV stations with five or more full-time employees will need to file this report by the fourth anniversary of the due date for their license renewal application.
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 was announced in June, focusing on radio licensees. 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. See our summary of broadcasters’ EEO obligations, here.
FCC Commissioner Michael O’Rielly has proposed allowing broadcasters to meet their EEO wide dissemination obligations solely through Internet sources. See our summary here. While updating the EEO rules to the modern era makes sense, it remains to be seen whether this proposal gains any traction.
Beginning Nov. 30, broadcasters must comply with an FCC requirement that emergency information provided in non-news 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). See our summary here.
In 2014, 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. The comments period in this proceeding has closed. See our summary of this proposal here.
In June the FCC adopted new rules designed to improve EAS by adopting “six zeroes” (000000) as the national location code pertaining to every state and county in the United States (for use with nationwide EAS alerts), and requiring EAS participants to use equipment capable of processing this location code. The new rules will also require broadcasters and others to file national EAS test result data electronically, among other requirements. While the rules become effective on July 30, the compliance obligations imposed by the new rules will be phased in over time. The order adopting these rules is available here.
For more on Emergency Alert Service issues, see our Broadcast Law Blog articles 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 (and the Sony hack in 2014 only highlights that vulnerability). 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 May, the FCC fined iHeart Media $1 million over the use of EAS tones in a non-emergency. See our article here. Last year, the FCC proposed more than $2.2 million in fines for false EAS alerts embedded in movie trailers and other commercials. See our summary here and here.
FCC Application Forms
The FCC is rolling out a replacement electronic filing system for broadcasters. The 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 were the FCC Form 301 construction permit application and FCC Form 302-DT license application for TV stations, followed by Class A and LPTV/TV translator applications forms. Instead of filing these forms, applicants 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. Schedule 381 is the technical submission discussed further below in the Incentive Auction section (it is due July 9).
FCC Process and Communications Act Reform
With Republicans assuming control of both the House and the Senate, the prospects for overhauling the nation’s communications laws may have increased. Part of that effort may include FCC procedural reforms. This idea is not new — it has been kicking around the House of Representatives for several years, but it has been blocked by Democratic control of the Senate.
With Republicans in control of the Senate, and Sen. John Thune (R-S.D.) assuming control of the Senate Commerce Committee from Senator Jay Rockefeller (D-W.Va.) who retired, FCC process reform may be more likely. In February, Senator Dean Heller (R-Nev.) introduced the Federal Communications Commission Process Reform Act of 2015, which closely mirrors legislation introduced and passed in the House each of the last two Congresses.
A companion bill (H. 2583) was introduced in the House on May 29. More information about the bill is available here.
There has also been talk of further overhaul of the Communications Act, as the last significant rewrite was in 1996 before the Internet had any substantial impact on the communications industry. But the parameters of any such rewrite are vague, and vaguer still are the impact any revisions would have on broadcasters.
Much of the legislative agenda may be driven by House and Senate Republicans upset with the FCC’s approach to net neutrality issues which do not directly affect the broadcasting industry. Stay tuned to see what comes out of the Commerce Committees of the House and Senate this year.
Field Office Closures
In April, it appeared that the FCC was moving forward with the apparent cost-saving measure of shutting down 16 of the 24 FCC field offices located throughout the United States. These field offices serve an important role in assessing interference complaints. In June, following pressure from Capitol Hill and from broadcasters, the FCC revised its plan and announced that it would keep 15 of the 24 offices open.
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 2014 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. The freeze otherwise remains in place and will likely continue until after the auction.
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 filed a petition for declaratory ruling that its ownership does not violate the alien ownership prohibitions. See our summary here. In May 2015, commission staff granted a waiver to Pandora allowing it to have foreign equity and voting interests of up to 49.99%, subject to certain reporting and other requirements.
The FCC also promised to reexamine the recommended methodology for public companies to comply with the foreign ownership standards, as Pandora claimed that the current methodology, adopted in the 1970s, no longer is workable because of changes in the way that stock is traded in current markets, and as the SEC now has in place more rules protecting shareholder privacy. When the FCC will ask for comments on this issue is unknown.
Two of the most important issues for broadcasters in 2015 and beyond will be the FCC’s voluntary incentive auction and the subsequent involuntary repacking of TV stations into a smaller amount of UHF spectrum. According to FCC Chairman Tom Wheeler, the auction remains on track to be held in early 2016, with applications for broadcasters to participate in the “reverse” part of the auction due perhaps as early as this fall.
Recent events appear to help solidify that timeline. In June, the DC Circuit Court of Appeals removed one of the major barriers to the incentive auction when it upheld the FCC’s rules for the auction, in a decision that rejected appeals brought by the NAB and Sinclair. See our discussion here.
The court’s decision prompted the FCC to move forward on a number of fronts. First, on the same day the court’s decision was announced, the FCC released revised rules for channel sharing by TV stations post-auction. Specifically, the FCC clarified that the typical prohibition on reversionary interests does not apply to parties that have entered into channel-sharing agreements (CSAs), including agreements that contain contingent rights such as puts, calls, options, and rights of first refusal.
The FCC will also permit a winning reverse-auction bidder to execute a CSA after bidding in the auction is complete, as long as the bidder 1) indicates in its pre-auction application that it intends to find a channel-sharing partner, and 2) executes and implements a CSA within 90 days of the auction closing.
Broadcasters are also now free to enter into term-limited CSAs, and to develop CSA terms that address what would happen in the event that a sharing party’s license is terminated for any reason, rather than have the license revert to the FCC for re-auctioning.
In a related Notice of Proposed Rulemaking, the FCC has asked several follow-up questions, including whether it should allow CSAs to be entered into outside of the incentive auction context, and whether carriage rights should be limited to the area covered by the shared channel’s signal contour. Initial comments will be due 30 days after Federal Register publication of the NPRM, with replies due 15 days later.
Second, on June 16 the FCC issued a Notice of Proposed Rulemaking tentatively concluding that it should preserve one UHF channel (above ch. 21) in each DMA for shared use by either unlicensed “white space” devices or wireless microphones. The FCC proposes to require applicants for LPTV, TV translator and Broadcast Auxiliary Service facilities to demonstrate that any proposed facilities would not eliminate the last available vacant UHF television channel for use by white space devices and wireless microphones in the DMA.
Full-power and Class A television stations would, at least during the 39-month post-incentive auction repacking period, not be subject to this requirement. The two Republican FCC commissioners objected to the proposal, with one suggesting that it would “dole out regulatory presents to favored companies and industries while leaving others worse off.” Comments on the proposal are due by Aug. 3 and reply comments are due by Aug. 31.
Third, on June 19 the FCC denied nearly all of the numerous petitions for reconsideration filed against the auction rules adopted in June 2014. Among other things, the FCC on reconsideration rejected calls to preserve at least one noncommercial educational channel in each TV market. The FCC also reiterated that it would move forward with the auction proceeding without necessarily completing international coordination with Canada and Mexico, and it upheld its decision not to protect LPTV and TV translators during the repacking process. Any one of these decisions could trigger additional litigation which potentially may delay the auction.
Finally, at its next open meeting on July 16, the FCC will vote on an item adopting final auction procedures. The proposed procedures were issued on Dec. 11, 2014. One of the more controversial proposals has been “dynamic reserve pricing” (DRP), which might be used to artificially deflate auction prices for broadcasters. Recent statements from FCC staff have suggested that the FCC might be backing away from DRP. More information is available here. The FCC is also expected to vote on important carrier participation issues related to the forward auction at its meeting on July 16.
While the overall details of the FCC’s June 2014 order are too complicated to summarize in this article, we can provide a brief background. 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 MHz duplex gap, then the downlink band for mobile broadband, then a 7-11 MHz guard band, and below that (possibly starting at channel 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 the demand for spectrum from wireless users and the ability of the commission to incentivize enough broadcasters to surrender their spectrum to clear more channels.
In the reverse auction, full power and Class A stations can bid to 1) go off the air (or channel share); 2) move from a UHF to a high VHF or low VHF channel; or 3) move from a high VHF channel to a low VHF channel. Broadcasters will be asked to submit pre-auction applications to participate as noted above. 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 of the bidding to surrender their spectrum, in which case they will continue to be a broadcast licensee. The forward auction will sell 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.
The FCC will compensate TV stations for a portion of the costs of repacking, up to $1.75 billion. On Sept 25, 2014, the FCC released a public notice seeking comment on a draft “TV Broadcaster Relocation Fund Reimbursement Form.” Comments on the form were due Nov. 26, 2014. See our summary here and here.
On June 9 the FCC’s Media Bureau released a Public Notice announcing the full-power and Class A stations that will be considered eligible for repacking protection and participation in the reverse auction, and setting July 9 as the deadline for filing Pre-Auction Technical Certification Forms (FCC Form 2100, Schedule 381). The Public Notice includes an Appendix that lists all eligible facilities, and establishes a process for stations that are not listed in the Appendix to file a Petition for Eligible Entity Status with the bureau requesting that their facility be deemed an “eligible facility.” Such petitions are due by July 9.
How much can broadcasters expect to be paid from the auction? No one knows, because the auctions prices will keep descending until enough bidders drop out. However, on Oct. 1, 2014, the FCC released an economic report prepared for it by investment bankers Greenhill & Co. that attempts to estimate the expected maximum and median prices for stations participating in the incentive auction. A copy of the report is available here, and more information about the report is available here.
With figures of nearly $500 million or more projected 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. On the other hand, the recent AWS-3 auction has exceeded all expectations, with revenues of more than $44 billion. The FCC followed up in February with a new set of numbers for the opening price to be offered to broadcasters for the surrender of their spectrum, also prepared by Greenhill. See our article here for further details as to the difference between these two sets of numbers from Greenhill.
Even stations that elect not to participate in the auction need to pay attention to the auction procedures, because the FCC’s anti-collusion rules will apply during the auction even to broadcasters that do not plan to sell their frequencies in the auction.
For further background on the 2012 statute that authorizes the FCC to conduct an incentive auction to clear parts of the UHF band for mobile broadband uses, see our summary here.
The FCC has continued its strict enforcement of indecency matters. On March 23, the full commission issued a notice of apparent liability for forfeiture proposing the statutory maximum fine of $325,000 for Schurz Communications’ WDBJ Roanoke, Va., which “aired graphic and sexually explicit material” during a 3-second video clip on its 6 p.m. newscast. The licensee argued that the image had not been visible on the monitors in the station’s editing bay, and therefore the station’s management who had reviewed the story did not see the offending material prior to broadcast.
In a news release, the FCC’s Enforcement Bureau chief noted that the FCC’s action sends a clear signal that there are “severe consequences” for broadcasting sexually explicit material when children are likely to be in the audience. More information on this decision is available here. The station has challenged the decision and the proceeding remains pending.
Meanwhile, a 2013 proceeding on whether to make changes to the FCC’s indecency policies remains pending. In that proceeding, the FCC asked for comments on whether it should continue to apply the hard-line enforcement standard against fleeting expletives that was adopted by the FCC 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. For a description of some of the issues involved in this proceeding, see our Blog articles here, here and here.
Joint Sales Agreements
Last year the FCC initiated a new 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 two years (i.e., by Dec. 19, 2016 thanks to a six-month extension from STELAR, discussed separately below).
The FCC has adopted a waiver process that 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. The DC Circuit, which has been viewed previously as a broadcaster-friendly venue, has been at least temporarily assigned the case, but there are motions pending to move the case to the Third Circuit in Philadelphia, which has been seen as being more hostile to efforts to relax the ownership rules.
Meanwhile, on Capitol Hill a bipartisan group of leading senators introduced a bill in May that would grandfather all JSAs that were in existence prior to March 31, 2014, when the FCC voted to restrict them. The bill was voted favorably out of committee and remains pending in the Senate. Currently there is no companion bill in the House.
The renewal cycle for television stations (including LPTV stations, TV translators and Class A stations) is concluding with the processing of renewal applications filed by stations in Delaware and Pennsylvania, which were due April 1. The next regular renewal filing deadline for TV stations will not occur until 2020.
In reviewing license renewals, the FCC has focused 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. In addition, the FCC has warned stations about taking too broad an interpretation of “children’s programming,” noting that the FCC “does not automatically accept” a licensee’s claim that its programming adequately meets the standards for children’s programming, but will instead “require the licensee to present credible evidence to support its position in such a situation.” See our summary here.
While this renewal cycle is over but for the processing of the remaining pending applications, many of the fines discussed above were based on conduct early in the last renewal cycle. Thus, conduct now can lead to fines in the renewal cycle that will begin in 2020, so do not relax on regulatory compliance merely because the next license renewals seem a long way away.
LPTV Stations And TV Translators
The FCC adopted a decision requiring all analog LPTV and translator stations to convert to digital operations by Sept. 1. However, in October 2014 the FCC issued a proposal to extend that deadline. At the same time, the FCC suspended the expiration dates and construction deadlines for all outstanding unexpired construction permits for new digital LPTV and TV translator facilities until the October rulemaking is finalized.
Additionally, the FCC advanced a number of proposals on how it will deal with LPTV stations and TV translators after the incentive auction and the repacking of the TV spectrum into whatever channels are left after part of the TV band is repurposed for wireless uses. The FCC also suggested a post-auction window for LPTV and translator stations to file for displacement channels if their current operations are no longer possible after the repacking of the TV band.
It also addressed the potential for LPTVs on ch. 6 being able to transmit, post-digital transition, an analog audio channel so that “Franken FMs” (audio received on FM receivers on 87.7 MHz that really is the audio portion of the LPTV’s programming), can continue. Reply comments were due Feb. 2. See our summary here.
In June 2014 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. LPTV interests have been lobbying hard for some recognition in the incentive auction process, and have filed many of the petitions for reconsideration of the incentive auction rules which were denied last month when the FCC acted on the incentive auction reconsideration filings (as referenced above). Whether there will be sufficient spectrum for LPTV after the repacking remains one of the great unknowns about the incentive auction.
See STELAR below.
Multichannel Video Programming Distributors (MVPDs)
The Aereo case has prompted renewed questions about what it means to be an MVPD, and whether the definition of MVPD should include over-the-top (OTT) providers like HBO, Sling and the now-defunct Aereo. On Dec. 19, 2014, the FCC released an Notice of Proposed Rulemaking proposing to modernize its interpretation of the term “MVPD” to include “services that make available for purchase, by subscribers or customers, multiple linear streams of video programming, regardless of the technology used to distribute the programming.” Reply comments in this proceeding were due April 1. Click here for more on this item.
Network Nonduplication/ Syndicated Exclusivity
See the Retransmission Consent discussion below for a description of the commission’s proceeding asking if it should abolish network nonduplication and syndicated exclusivity protections.
Online Public Inspection File
TV stations are required to place the majority of 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.
The obligation to post the political file online went into effect for all TV stations in 2014 despite a pending rulemaking which sought comment on the burdens of maintaining a political file online. The FCC Media Bureau had previously 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 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 and here for our summary of the proceeding looking to expand the online public file obligations. Reply comments in that proceeding were due April 14.
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 in 2013. In its place, the FCC announced a new review last year. 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 joint sales agreements, the FCC said 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.
There are numerous other proposals and tentative conclusions reached in the FCC’s 236-page decision. Of relevance to TV stations are the proposal to retain the local TV ownership rule, the newspaper/broadcast cross-ownership 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 crossownership rule and the TV-radio crossownership rule. The pleading cycle has closed in this proceeding. 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 Biennial Ownership Reports for commercial broadcasters will be due this December.
In February, the FCC proposed creating a new Restricted Use FRN (RUFRN) that could be obtained for an individual listed on ownership reports without the need for supplying a complete Social Security Number; instead only the last four digits of the SSN would be needed. Reply comments in this proceeding were due April 13. For more information on this issue, click here.
The FCC also earlier sought comment on whether biennial ownership reporting requirements should include interests, entities and individuals that are not attributable because of 1) the “single majority shareholder” exemption and 2) the exemption for interests held in eligible entities pursuant to the higher “equity debt plus” threshold. Reply comments in that proceeding were due March 1, 2013. See our summary here.
In January the FCC sought public comment on a complaint filed by Canal Partners Media during the 2014 election cycle, in which Canal claimed that two television stations were violating Section 315(b) of the Communications Act, as amended, by prioritizing commercial advertisers over political candidates when making preemption determinations.
Specifically, Canal claimed that the stations’ last-in-first-out (LIFO) policy preempted candidates’ advertisements in favor of commercial advertisers purchased earlier in time. Canal’s complaint requested that “if broadcast stations are using LIFO as a method to determine preemption priorities, they must treat political candidates as being the first-in advertiser regardless of when the candidate purchased its airtime in order to be in compliance with Section 315(b) of the [Act].” See our summary of the issues here.
Separately, complaints have been filed by the Sunlight Foundation against 11 large market stations alleging that their online political 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 2014 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.
After the elections in November, another complaint was filed by the same groups against a Chicago TV station claiming that the station should have identified former New York City Mayor Michael Bloomberg as the true sponsor of an ad run by a PAC. In this case, the station apparently was given written notice of the claim that the sponsorship identification should have included Bloomberg, which may distinguish it from prior cases. That issue remains pending. See our summary here.
While 2015 may be an off-cycle election year, some states will have elections so stations in those markets should keep up to date on these issues. In addition, stations in many states that have early presidential primaries in 2016 are already seeing political ad buys, so they should be preparing for next year’s elections. For more information on 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 an elective 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 super-PACs 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.
Numerous requests for take-downs of candidate ads occurred in races across the country in 2014, 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 propose specifics for such a form in a Notice of Proposed Rulemaking, or the commission could decide to not further pursue this proposal.
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, 2014. This election covers the period from Jan. 1, 2015, to Dec. 31, 2017.
Last year, the FCC adopted 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 four stations in the market. See our summary here.
In December 2014, Congress passed STELAR (see separate entry below) which essentially codified the FCC’s new rule prohibiting joint negotiations, but went further by prohibiting joint negotiations by non-commonly owned stations even when one or both of the stations are not among the top four stations in the market. Our summary of STELAR is available here. The FCC codified the STELAR joint negotiating ban in February.
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 MVPDs 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. Formal comments in this proceeding were filed last summer. See our discussion here for more details of the proceeding.
The FCC continues to enforce its sponsorship ID rules vigorously. In December 2014, the Enforcement Bureau entered into a Consent Decree with a television licensee for broadcasting “Special Reports” formatted in the style of a news report and featuring a station employee without disclosing that they were actually commercials paid for by local car dealerships, as required by the sponsorship identification rules.
The licensee admitted liability and agreed to pay a $115,000 civil penalty. The accompanying Order described the rules not only as protecting consumers by “ensuring they know who is trying to persuade them,” but also as protecting competition by “providing a level playing field for advertisers who follow the rules.” See our summary here.
In February 2014, 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.
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 rule change became effective Nov. 24, 2014, but it is expected that many of the same restrictions on local carriage of non-sellout NFL games will be included in contracts with the league, instead of by FCC rule.
On Dec. 4, 2014, President Obama signed into law the STELA Reauthorization Act of 2014 (STELAR). In addition to simply giving satellite television companies (essentially Dish Network and DirecTV) a five-year extension of their rights to rebroadcast the signals of over-the-air television stations without authorization from every copyright holder of the programming broadcast on those stations, STELAR made other changes to both the Communications and Copyright Acts that will have an impact on TV station operators, including a six-month extension of the deadline for unwinding impermissible joint sales arrangements, and a prohibition on joint negotiations of retransmission consent agreements by non-commonly owned stations. For more information, see our summary here.
STELAR also required significant changes to the FCC’s market modification rules. Prior to STELAR, the FCC’s market modification rules did not apply to satellite companies. STELAR now puts those MVPDs on essentially the same footing as cable MVPDs in terms of market modifications.
Another key objective of STELAR is to facilitate satellite provision of in-state television programming to “orphan counties,” i.e., those counties where satellite subscribers do not have access to in-state television stations due to the way that Nielsen Designated Market Areas are drawn. The FCC initiated a Notice of Proposed Rulemaking on these issues in March, and reply comments were due May 28. A copy of the NPRM is available here and further information is available here.
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 and here.
Since 1985, in an effort to encourage further TV use of the UHF band (chs. 14-51) over traditional VHF channels (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 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 FCC Commissioner Ajit Pai dissenting to the proposal to grandfather only existing station combinations and proposed combinations that were pending as of Sept. 26, 2013, and objecting to the failure to analyze the 39% nationwide cap in tandem with the review of the UHF discount. The pleading cycle in this proceeding has closed. 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-four affiliates (ABC, CBS, Fox and NBC) in the top 60 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.
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.
White Spaces/Unlicensed Devices
In March 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 on-line registration system for unlicensed wireless microphones and other low power auxiliary devices.
Recently the NAB identified a potentially serious flaw in the administration of white space databases. Specifically, NAB determined that unlicensed white space device users had provided inaccurate information in all nine of the required fields of the database, including invalid FCC IDs, fake serial numbers and false contact information.
NAB’s review found that more than one-third of fixed TV white space devices in the database listed inaccurate location data that would seriously undermine the administration of white space devices and potentially create major interference issues. On this basis, the NAB on March 19 filed an emergency petition asking the FCC to suspend operations of the databases until these issues can be addressed. The FCC has not yet sought comment on the petition.
Separately, the incentive auction has created some uncertainty about the prospects for white space devices generally. 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. Parties have filed petitions for reconsideration on many of these issues.
On Sept. 30, 2014, 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. Reply comments were due Jan. 26.
See the Incentive Auction section above for a discussion of the FCC’s recent proposal to devote one UHF channel in each TV market for use by unlicensed devices and wireless microphones.
The use of wireless microphone devices in the 700 MHz band was prohibited by the FCC in 2010. However, the current 600 MHz band and other frequencies remain used by broadcasters and others for wireless microphones.
In the June 2014 incentive auction order, the FCC determined that wireless microphones would be permitted to operate in 4 MHz of the 11 MHz “Duplex Gap” (i.e., the band of spectrum between mobile broadband uplink and downlink spectrum in the revised 600 MHz band plan), and also in one shared TV White Space channel in every market.
Separately, the FCC determined that companies that use 50 or more wireless microphones will have the same interference protection as low power wireless audio devices. But wireless microphones are otherwise being phased out of the 600 MHz band, with a hard date of 39 months after the incentive auction concludes to be completely transitioned out of the 600 MHz band that is now reserved for mobile broadband uses.
On Sept. 30, 2014, 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.” Reply comments were due Jan. 26.
See the Incentive Auction section above for a discussion of the FCC’s recent proposal to devote one UHF channel in each TV market for use by unlicensed devices and wireless microphones.