The new year began as a mixed bag for broadcasters. On the one hand, the FCC announced plans to continue its media modernization efforts, which have led to significant deregulation under Chairman Ajit Pai, including an item that had been scheduled for the Jan. 30 open meeting agenda to eliminate the obligation to file FCC Form 397 EEO mid-term reports.
On the other hand, the prolonged federal government shutdown postponed consideration of that item until the FCC’s February meeting, and has likely delayed transactions and created a backlog of broadcast applications that must be processed by FCC staff.
Meanwhile broadcasters must begin preparing for the license renewal process, with radio stations beginning to file their renewal applications this June, and with TV station obligations beginning less than a year later.
Keep up to date with these and other legal and policy issues affecting television broadcasters by reading FCC Watch, an exclusive briefing on some of the major issues currently being considered in Washington 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:
ATSC 3.0
In November 2017, the FCC voted to adopt new rules authorizing TV stations to use the ATSC 3.0 standard on a voluntary, market-driven basis. The new rules have become effective (see our discussion here), but petitions for reconsideration of the FCC’s decision remain pending. In addition, although the FCC received OMB approval in July 2018 for a new FCC Form 2100 that can be used to obtain necessary FCC approval to implement ATSC 3.0, the FCC has yet to update that form in its online License Management System (LMS). Thus, at this point, only stations operating with experimental authority are using the new standard.
The 2017 decision was the culmination of years of efforts to introduce this new standard, aka Next Generation TV. The ATSC 3.0 standard was developed by the Advanced Television Systems Committee (ATSC). The new standard incorporates Internet-protocol digital encoding and allows for many other major advances, including 4K capabilities, high-efficiency video coding, enhanced compression and significant improvements for both mobile reception and data transmission.
The FCC’s decision incorporates only a portion of the new standard into its rules — specifically, it incorporated two parts of the ATSC 3.0 “physical layer” standard into the rules:
- The ATSC A/321:2016 “System Discovery & Signaling” (A/321), which is the standard used to communicate the RF signal type that the ATSC 3.0 signal will use, and
- The A/322:2017 “Physical Layer Protocol” (A/322), which is the standard that defines the waveforms that ATSC 3.0 signals may take.
With respect to A/322, the FCC decided to apply the standard only to a Next Gen TV station’s primary free over-the-air video programming stream and incorporate it by reference into the FCC rules for a period of five years.
The 3.0 standard is an alternative to, but not a replacement for, the current ATSC 1.0 DTV transmission standard. Stations are not required to transition to the new standard. The FCC also declined to mandate that TV manufacturers include a 3.0 tuner in television sets, in keeping with the voluntary nature of this new standard.
Stations choosing to operate using the 3.0 standard will be required to simulcast the primary video programming stream of their 3.0 channels in an ATSC 1.0 format, so that viewers will continue to receive 1.0 service. Stations can comply with this requirement by partnering with another station (i.e., a temporary “host” station) in their local market to either:
- Air a 3.0 channel at the temporary host’s facility, while using their original facility to continue to provide a 1.0 simulcast channel, or
- Air a 1.0 simulcast channel at the temporary host’s facility, while converting their original facility to provide a 3.0 channel. For an initial period of 5 years, the programming aired on the 1.0 simulcast channel must be “substantially similar” to the programming aired on the 3.0 channel. LPTV and TV translator stations are exempt from the local simulcasting requirement.
A full-power 3.0 signal will not have mandatory carriage rights while the FCC requires local simulcasting. MVPDs will be required to continue to carry 1.0 signals under the must carry rules. The FCC has left it to the marketplace to determine the carriage of 3.0 signals pursuant to retransmission consent agreements.
A number of other conditions and restrictions apply, so stations that are considering the incorporation of 3.0 should review the FCC’s decision carefully.
In a Further Notice of Proposed Rulemaking, the FCC seeks further comment on three topics:
- Exceptions to and waivers of the local simulcasting requirement.
- Whether to allow full power broadcasters to use vacant TV channels to facilitate the transition to 3.0.
- The FCC’s tentative conclusion that local simulcasting should not change the “significantly viewed” status of a 3.0 station.
The comment period has closed. See our article here for more on this Further Notice.
Experimental tests of the new system continue around the country, including test markets in Cleveland, Dallas, Lansing, Phoenix and Raleigh. Many stations are hopeful that they will be permitted to incorporate the 3.0 standard as part of any repacking they need to do as a result of the incentive auction.
Auxiliary Facilities
In 2015, 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. The pleading cycle in this proceeding closed in 2015.
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/85:2013 standards adopted by the Advanced Television Standards Committee (ATSC), a standard that has been in place since June 2015. See our summary of CALM Act requirements here and here.
The FCC has previously indicated 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 far, there have been no public actions by the FCC for CALM Act violations. Stay tuned to see if anything changes with the administration’s enforcement of CALM Act issues.
Children’s Programming
In July 2018, the FCC adopted a Notice of Proposed Rulemaking on potentially reforming the children’s television rules — including a review as to whether the current requirement that regularly scheduled programs of 30 minutes in length are the only means to meet the obligation to broadcast 3 hours of educational and informational children’s programming each week.
The NPRM is also looking at whether the commission should continue to require three hours of educational and informational children’s programming for each stream of free over-the-air programming broadcast by a station, regardless of the programming or target audience of that stream. The rulemaking will also look at whether all kid’s programming obligations could be met by broadcasts on a single multicast stream or through other efforts. See our articles here and here. The comment period closed in October 2018.
Meanwhile, the FCC is still in the enforcement business. In August 2017, the FCC entered into a consent decree with a TV station that had not been identifying educational and informational programming addressed to children with the on-air “E/I” symbol. For this and other related violations, the station agreed to make a $17,500 payment to the government, showing that the new administration is still enforcing the rules on its books. See our description of this decision here.
This enforcement action is similar to past cases under the previous administration, where fines were issued for not including the “E/I” symbol on educational and informational programs, and for broadcasting the URL of a commercial website in the body of a program directed to children ages 12 and under. See our summaries of some of these cases here and here.
In the past, fines have also been issued for stations that failed to publicize that educational and informational programming in local program guides. See, e.g., the FCC decision here. TV broadcasters need to carefully observe all aspects of the children’s television rules, as the FCC has been monitoring compliance in this area.
There are numerous other aspects of the children’s television rules to which stations must pay close attention. In July 2015, a station group agreed to pay $90,000 to the federal government and enter into a compliance program in order to resolve claims that the stations were using multiple re-runs of one-time programs to meet their obligations to provide three hours of weekly educational and informational children’s programming.
The FCC asserted that to meet their “core” programming obligation, stations must run regularly scheduled episodes of eligible programs, and not just repeats of one-off programs. See our summary of this case here.
In another 2015 decision, the FCC warned stations to carefully assess the educational and informational aspects of such programs to make sure that there can be no reasonable question as to whether the programs have, as a “significant purpose” the positive development of children’s cognitive and social skills.
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.
Throughout the most recent license renewal cycle, the FCC issued significant fines to TV stations for late-filed FCC Form 398 children’s programming reports. In fact, the FCC has been reviewing station’s online public files to more easily locate late-filings. See our article here.
Stations need to be diligent in timely filing those reports, and keeping records of when those reports were filed, in preparation for the next round of TV renewals that will begin in 2020.
So even though the FCC has an ongoing review of whether to relax some of its children’s programming rules, stations should be vigilant in complying with the rules that are currently in effect.
Closed Captioning
TV Closed Captioning — In 2015, new closed captioning obligations for TV broadcasters became effective. These new “quality” standards for captioning include four distinct areas: Accuracy, synchronicity with the words being captioned, caption completeness from the beginning of a program to its ending, and 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. For more on the new obligations for quality captioning, see our article here.
In February 2016, the FCC adopted a Second Report and Order that reallocates responsibility for compliance with the closed captioning rules between video programming distributors (VPDs) and video programmers (VPs). The new rules also include methods for measuring closed captioning compliance and responding to consumer complaints. New certifications by VPs to the FCC will also be required.
Although some of these rules took effect in September 2016, most of these new rules will not take effect until they have been reviewed and approved by the Office of Management and Budget.
At the same time, the FCC has restricted 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.
The Media Bureau has denied a number of closed captioning waiver requests filed by various churches and other organizations. In doing so, the bureau has conducted a detailed analysis of the financial status of the requesting party, and frequently has concluded that the organization had adequate finances to pay for captioning, and thus a waiver was not warranted. The bureau under the previous administration also concluded that there are no religious freedom constitutional issues presented by these cases. See our commentary here.
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.
The FCC required the broadcasting community to submit a report detailing 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. The NAB submitted a report on behalf of the TV industry in 2015, and a copy is available here.
IP Captioning — FCC rules require the closed captioning of certain 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), a 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).
TV stations and other video programming distributors (VPDs) are required to make captions available for “archival” IP-delivered video programming within 15 days of the date that an archived program aired on television with captions.
Brief video clips and outtakes (including excerpts of full-length programming) taken directly from captioned TV programming and displayed online must be captioned. In addition, “montages” of multiple clips from captioned TV programs must also be captioned if they are displayed online. Clips from live and “near-live” TV programming must also be captioned if they are displayed online.
However, such clips may be posted online initially without captions as long as captions are added to clips of live programming within 12 hours, and to clips of “near-live” programming within eight hours, after the conclusion of the television showing of the full-length programming.
The FCC has an open proceeding about how to deal with clips of captioned TV programs that are contained in a “mash-up” with other content that has not been shown on TV with captions. This proceeding also asks whether the grace period provided for live and near-live clips should be phased out over time, and whether the captioning rules should be extended 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.
Contests
In 2016, new FCC rules became effective which give broadcasters greater flexibility in their disclosure of the material terms of contests which they conduct. Under the new rules, broadcasters may disclose material contest information online in lieu of making on-air announcements, subject to certain requirements. Click here for further information, and click here for our discussion of potential pitfalls when running station contests.
Copyright Infringement Lawsuits for Unauthorized Uses of Internet Photos and Videos
There have been almost daily reports in the broadcast trade press of new lawsuits filed against broadcasters for using photos on their websites and even in their social media accounts without permission of the photographer. In most cases, these photographs were found by station employees on the Internet, and used to illustrate articles on station websites without obtaining permission of the copyright holder.
Similar complaints have been leveled against TV stations for taking Internet photos or video and using them in their on-air programming. Simply because material has been posted on the Internet does not mean that the material is in the public domain and can be reused without permission of the creator. See our articles here, here, here and here for more information about these issues.
In 2015, the Copyright Office began a proceeding to study how to best protect the rights of photographers and others who produce digital images, while making it possible for users to get the rights to use such photos. See our summary of the initiation of the proceeding here.
A bill was introduced in Congress in August 2016 seeking to establish a copyright small claims court that would allow photographers and others to more easily enforce their rights. See our analysis of that bill here. Congress adjourned without action on these items, but look for these proposals to be considered in the future. See our update here. In fact, in January 2019, the Copyright Office wrote to Congress, again expressing the need for reform, including the small claims court for copyright matters. See the Copyright Office’s letter to the Senate Judiciary Committee, here.
Drones/Unmanned Aircraft Systems (UAS)
Late last fall, President Trump signed the “FAA Reauthorization Act of 2018,” a comprehensive statute that includes 45-plus sections related to drones. The UAS-specific sections represent the most extensive codification to date of federal goals, policies, and directives concerning the drone industry, and among other things, require the FAA to initiate new rulemaking proceedings on multiple UAS topics.
Most significantly, the new statute repeals Section 336 of Congress’ original 2012 drone statute, which had divested the FAA of most authority on recreational drone flyers or “hobbyists.” In repealing the former hobbyist exemption from regulation, the new statute makes clear that the FAA now has authority to move forward with remote identification and authentication rules, as applied to all drones, commercial and recreational.
Implementation of remote ID and authentication is essential for the roll-out of expanded drone operations — such as flights beyond visual line-of-sight and operations over people. The recently passed legislation orders the FAA to establish a new five-year pilot program to utilize currently available remote detection or identification technologies for safety oversight.
In this legislation, Congress for the first time addresses privacy issues related to drones. Among other provisions, Congress mandates that commercial UAS operators, except those involved in the media, must have a written policy regarding their collection, use, retention, dissemination, and deletion of data. The act provides that violation of such privacy policies will constitute unfair and deceptive practices under the Federal Trade Commission Act.
With the recent government shutdown, the FAA’s issuance of rulemakings that were already in the works before Congress acted and those necessary to implement the new act has been further delayed. The FAA staff continues to work on drafting a rulemaking notice to implement some of the report and recommendations on remote identification and authorization that an FAA Aviation Rulemaking Committee issued in 2017. These rulemaking proposals are expected to be published in late spring or early summer.
In the meantime, the FAA has released a 200-plus page rulemaking proposal to revise its rules regarding drone flights over people and flights at night. (Although the proposals have not yet been published in the Federal Register, comments will likely be due in late spring.)
The new rules would permit such expanded operations without the need to seek a waiver, provided a number of conditions are met. For instance, night flights would be allowed provided an operator completes new knowledge testing or training requirements related to flying at night and the UAS itself has anti-collision lighting visible for at least three statute rules.
The proposed rules for operations over people are more complex, setting forth three categories of permissible operations that vary depending on the risk operations would present to individuals on the ground. The FAA notice makes clear, however, that any new rules for operations at night or over people will not become effective until the separate, as yet unannounced, remote ID and authentication rulemaking proceeding is concluded.
EAS — Emergency Information
In July 2018, the FCC adopted a requirement that, within 24 hours of a broadcaster’s discovery that it has transmitted or otherwise sent a false alert to the public, the broadcaster must send an email to the FCC Ops Center ([email protected]), informing the FCC of the event and of any details that the EAS Participant may have concerning the event. This requirement is not yet effective pending OMB approval.
The FCC also issued a Further Notice of Proposed Rulemaking, suggesting other EAS changes to deal with false alerts — including asking if the FCC should create a more detailed reporting system for false alerts, and whether state EAS plans should be required to be amended to add procedures for dealing with false alerts. The comment period has closed. See our summary here.
Broadcasters were required to participate in the nationwide test of the Emergency Alert System (EAS) in 2018 and to submit three required forms about their performance. In December 2018, the FCC released initial findings from the test, which showed that overall performance appears to have improved from the 2017 test.
This will not be the last nationwide EAS test — in 2016, the IPAWS Modernization Act (Pub. L. No. 114-143) was enacted which, among other things, requires a nationwide EAS test at least once every three years going forward. Since 2016, FEMA and the FCC have conducted a nationwide EAS test on an annual basis.
In July 2017, the FCC released a new EAS Operating Handbook, which supersedes all other EAS Handbooks. Copies of the Handbook are available here.
In December 2017, the FCC added a dedicated event code to facilitate the delivery of “Blue Alerts” over the EAS and Wireless Emergency Alert (WEA) services. This new BLU event code will be available for state and local officials to notify the public of threats to law enforcement, similar to current Amber Alerts for missing children. Broadcasters were required to implement the BLU event code as of Jan. 18, 2019, while WEA participants have until July 18.
In November 2017, EAS participants were required to provide their State Emergency Communications Committees (SECCs) with information about the ways in which they make EAS information available to non-English speakers, if any. SECCs were required to compile and submit that information to the FCC in May 2018.
The FCC specifically declined to mandate multilingual emergency alerts by EAS Participants. In October 2017, the DC Circuit Court of Appeals upheld the FCC’s decision not to require multilingual EAS messaging. The full DC Circuit denied a request for rehearing of that decision. See our articles here and here for more details on the appeal.
FCC rules require TV stations to ensure that their EAS messages are accessible to members of the public, including those with disabilities. Specifically, EAS messages must appear at the top of the TV screen or elsewhere on the screen where they will not interfere with other visual messages.
In addition, EAS messages must be displayed in a manner that is readily readable and understandable, and in a manner that does not contain overlapping lines of EAS text or extend beyond the viewable display (except for video crawls that intentionally scroll on and off of the screen). Finally, the entire text of the EAS message must be displayed at least once.
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. In doing so, broadcasters must use the secondary audio (or SAP) 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 run during entertainment programming).
This obligation does not cover EAS alerts, but applies to other information about emergency situations that are conveyed by stations over the air in written form (such as crawls). See our summary here for information about these obligations.
The obligation to convert visually-presented emergency information into speech on the SAP channel has been on hold in one instance – where the information is provided graphically, e.g. by broadcasting a weather map or similar non-textual display. In May 2018, the FCC extended the deadline for complying with this requirement for another five years. See our summary of these issues here and here.
In April 2016, the FCC sought comment on ways to improve earthquake-related emergency alerts, including “Earthquake Early Warnings” to the entire public in fewer than 3 seconds. The FCC was supposed to submit a report on its findings to Congress in September 2016.
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 2015, the FCC fined iHeart Media $1 million over the use of EAS tones in a non-emergency. See our article here.
In May 2017, a broadcaster agreed to pay a $55,000 penalty and enter into to a three-year compliance plan with reporting obligations, in connection with a television commercial which incorporated a simulated EAS tone.
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 Florence, reminding stations of their obligation to provide visual as well as audio information about imminent threats to assist the hearing-impaired during emergencies.
EEO Rules
In July 2018, the FCC announced that it was moving EEO enforcement from the FCC’s Media Bureau to its Enforcement Bureau. For a discussion of the potential impact this may have on EEO audits and other enforcement, see our article here.
Many broadcasters will welcome the FCC’s proposed decision to eliminate the mid-term EEO reports known as FCC Form 397. The proposal was approved at the commission’s Feb. 14, 2019, open meeting. See our discussion of this proceeding here. This rule change will not become effective until after the completion of the current mid-term review periods for television stations in New Jersey, New York, Delaware and Pennsylvania. Accordingly, all such television licensees must still file Form 397 in connection with the mid-term review deadlines of Feb. 1, 2019 (New York and New Jersey) and April 1, 2019 (Delaware and Pennsylvania).
In another deregulatory move, the FCC in 2017 determined that broadcasters can rely solely on Internet recruitment sources to meet their requirement to widely disseminate information about their job openings. If a broadcaster, in its good faith judgement, determines that an online source will reach members of all of the significant groups in its community, it can rely solely on this online source when seeking candidates for new job openings.
The FCC suggested that stations should still reach out to community groups and educational institutions when recruiting for job openings, and still use its own airwaves for such recruiting. However, these additional outreach efforts are not mandatory if the online source being used reaches members of all significant groups within a broadcaster’s recruitment area. See our summary of the decision here.
While this new ruling significantly lessens the wide dissemination burdens on broadcasters, and is a significant departure from past precedent where stations that relied solely on online sources were fined, other broadcast EEO obligations remain intact. Broadcasters still need to notify specific community groups about job openings if those community groups specifically ask the station to receive such notices, and broadcasters still must conduct non-vacancy specific outreach efforts to educate the community about broadcast employment.
These include the EEO menu options such as attending job fairs, hosting interns, conducting broadcast scholarship programs, and speaking at community groups and educational institutions about what jobs there are at broadcast stations, how to train for them, and how to find them. For more on the remaining obligations, see our article here.
A recent reminder that the FCC is still enforcing its EEO rules came in December 2017, when the Enforcement Bureau announced a $20,000 proposed fine for a broadcaster that apparently failed to sufficiently document its EEO compliance. See our summary here.
The FCC also 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 February 2018, focusing on nearly 300 radio and TV stations. Read our summary here.
FCC Commissioners
In December 2018, the Senate confirmed Democrat Geoffrey Starks, formerly a member of the FCC’s Enforcement Bureau, to serve as an FCC commissioner. He was sworn in on Jan. 30, 2019. His confirmation was paired with the confirmation of Republican Commissioner Brendan Carr for a second term. See our background article on Starks here. Republican Chairman Ajit Pai was re-confirmed for a new five-year term in 2017. Commissioners Michael O’Rielly (Republican) and Jessica Rosenworcel (Democrat) continue to serve as the other commissioners.
FCC Shutdown
The FCC was essentially closed from Jan. 2 until Jan. 28 by the partial federal government shutdown. While certain auction-related activities continued during the shutdown (including those relating to the repacking of the TV band), the processing of assignment applications, rulemaking petitions and other routine matters was on hold. Most filings that had been due during the shutdown became due on Feb. 8, with updates to online public files that could not be done during the shutdown due on Feb. 11.
Filing Freeze
On April 5, 2013, the FCC imposed an immediate freeze on most full-power and Class A television modification applications, in connection with the incentive auction. For more on the freeze, see our article here. The FCC temporarily lifted the freeze in late 2017 to permit non-repacked stations to file modification applications, but the freeze is back in place for now.
In June 2015, 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. A new freeze on applications for digital companion channels for LPTV stations was issued in January 2017 (here) to protect opportunities for LPTV stations to seek new channels if they are displaced from their current channel in the repacking following the end of the incentive auction.
Displaced LPTV/TV translator stations were eligible to file for new channels in a Special Displacement Window which closed June 1, 2018. On Dec. 21, 2017, the FCC imposed an immediate freeze on the filing of modification applications for LPTV and TV translator stations. In July 2018, the FCC lifted the freeze on such applications. See our article here.
Foreign Ownership And Investment In Broadcasting
For many years, Section 310(b)(4) of the Communications Act was viewed as strictly limiting 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. The FCC has taken several steps to emphasize that the 25% limit is not a hard cap on foreign ownership of broadcast stations, but instead is simply a point at which specific FCC approval is needed for additional foreign ownership.
In 2016, the FCC released an Order extending the same foreign ownership flexibility currently applicable to common carriers, and those rules became effective in 2017. Under this approach, and with a few broadcaster-specific changes, broadcasters are now able to file petitions for declaratory ruling with the FCC to seek authority:
- To have up to 100% foreign ownership.
- For any controlling foreign entity to obtain an additional ownership interest of up to 100% without further FCC approval.
- For a disclosed, non-controlling foreign interest holder to obtain an additional ownership interest of up to 49.9% without further FCC approval.
In addition, any grant of authority by the FCC pursuant to a Section 310(b)(4) petition filed by a broadcaster automatically will extend to all after-acquired broadcast licenses acquired by the broadcaster. See our summary of the order here.
Parties seeking to exceed the 25% indirect foreign ownership 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 the public to comment on the petition, and Executive Branch agencies (aka Team Telecom) will be permitted to review the proposal for any national security implications prior to any grant. See our articles here and here for examples.
Even more regulatory relief was granted to U.S. broadcasters that may have incidental foreign ownership. Specifically, broadcasters must consider the citizenship of shareholders only if the shareholder is known or reasonably should be known to the broadcaster in the ordinary course of business exercising due diligence. This approach focuses on only those shareholders that have a reasonable likelihood of influencing the operations of a broadcaster. The FCC will no longer require the use of random shareholder surveys or require broadcasters to assume that unidentifiable shareholders are foreign.
In 2017, the FCC staff approved, for the first time, 100% foreign ownership of a US broadcast station when it allowed an Australian couple to acquire various broadcast licenses in Alaska, Arkansas and Texas. See our article here. In May 2018, the FCC approved 100% Mexican ownership of radio stations in California and Arizona. In August 2018, the FCC approved 100% foreign ownership of a New York radio station by citizens of Poland and the UK. A proposal by an Italian company to acquire a number of radio stations in Florida remains pending. See our summaries of these issues here and here.
Incentive Auction/Repacking
The incentive auction of UHF TV spectrum ended in March 2017, with total auction proceeds of about $19.7 billion and with 84 MHz of TV spectrum to be cleared (chs. 37-51). The hard part has only just begun — repacking TV stations into UHF channels 14-36, a process that will play out over the next several years, or perhaps longer.
Phase 1 stations completed their transition in November 2018, and Phase 2 stations must transition to their post-auction channels by April 12, 2019. The 39-month phased timeline remains controversial, and NAB has filed a petition for reconsideration seeking changes. Oppositions to the petition were filed by several wireless companies. The FCC has not yet acted on the NAB’s request.
Repacked stations filed for construction permits for their new channels in 2017, along with their FCC Form 399 cost reimbursements. Initially there were concerns that the cost estimates for the repacking for broadcasters and MPVDs was more than the amount allocated by Congress. However, Congress alleviated that concern in May 2018 with the passage of the Consolidated Appropriations Act, which should make sufficient funds available for all repacked full power TV stations, and even for low-power TV and radio stations affected by the repack. See our summary of that proposal here.
In August 2018, the FCC issued a Notice of Proposed Rulemaking outlining the proposed reimbursement process for LPTV and radio stations. The comment period closed in October 2018, and has not yet been acted on by the FCC. See our summary here.
Repacked stations are required to submit quarterly progress reports throughout the transition, with additional reports due as each station’s transition deadline approaches. In addition, the FCC announced that it would randomly audit repacked stations to help ensure the integrity of the repack funding process. See our summary of these issues here.
Indecency
While not a major enforcement issue of late, the FCC continues to have enforcement authority over broadcast indecency. In March 2015, the full commission issued a notice of apparent liability proposing the statutory maximum fine of $325,000 for a television station that “aired graphic and sexually explicit material” during a 3-second video clip on the 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. The bipartisan nature of this decision suggests that the FCC may not change course on indecency regulation under a Republican-led FCC.
In a news release, the then-chief of the FCC’s Enforcement Bureau noted that the decision sent 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.
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, here and here.
It remains to be seen whether Chairman Pai will act on the open proceeding on fleeting expletives. His only statement on the substance of indecency policy so far was that “the law that is on the books today requires that broadcasters keep it clean so to speak.” Indecency enforcement continues, with a New York broadcaster entering into a $10,000 consent decree to resolve indecency allegations in 2017.
There was much press coverage in 2017 of a supposed FCC investigation into a remark by Stephen Colbert on the Late Show suggesting that the President had committed a sex act with Vladimir Putin. It appears that this was nothing more than a review of the complaints that were filed about that incident, and the FCC terminated its review without further action.
See our article on the incident here, and another on the termination of the investigation here. See also our article here about the dilemma broadcasters face when the President apparently utters a profanity.
Joint Sales Agreements/Shared Service Agreements
In November 2017, the FCC repealed the attribution rules for TV JSAs. That decision went into effect in February 2018, but is subject to a pending appeal in the Third Circuit. See our summary here. TV stations are still required to upload copies of any JSA to their online public inspection files.
In the same decision, the FCC required commercial TV stations to disclose any Shared Service Agreements, regardless of whether the agreement involves commercial TV stations in the same market or in different markets, by uploading copies to their online public inspection files. That decision became fully effective in September 2018.
However, the FCC clarified that it would not require the filing of “ad-hoc” agreements such as news sharing of a particular event, or clearly non-broadcast issues like the sharing of the costs of the upkeep of a building, or of janitorial services. But shared service agreements dealing with broadcast operations must be posted in online public files. The decision stated that the filing was not for purposes of regulation, but instead for purposes of understanding the marketplace. More information is available here.
In the December 2018 Notice of Proposed Rulemaking initiating the next Quadrennial Review, discussed below in the Ownership Limits section, the FCC has asked whether it should continue to require the disclosure of SSAs, or whether that requirement can be eliminated.
License Renewals
The renewal application cycle for television stations (including LPTV stations, TV translators and Class A stations) will begin in June 2020, with the filing of renewals by stations in Maryland, Virginia, West Virginia and the District of Columbia. Renewals will be filed by stations in specified states every other month for three years.
Several changes have been made to the renewal application form since the last renewal cycle. For example, stations are no longer required to report on any comments received from the public about violent programming. Stations with renewal applications due next year should begin preparing this year by reviewing the new form and discussing any relevant issues with counsel.
In reviewing license renewal applications, the FCC has paid particular attention to public inspection file issues. For example, many stations were fined in the last renewal cycle for failing to timely file FCC Form 398 children’s programming reports.
In addition, the online nature of public files now makes it very easy for FCC staff and the public to verify the timeliness (or untimeliness) of station uploads to the public file including the uploading of Quarterly Issues Programs lists. See our article here about some of those fines, and our article here about issues to consider in the upcoming renewal cycle.
LPTV Stations/TV Translators
All LPTV stations and TV translators will be required to operate digitally by the end of the repacking process — currently scheduled for July 13, 2021 — unless they receive specific extensions or tolling of their construction permit based on unique circumstances. See the FCC’s Public Notice here, and our summary here.
The FCC decided during the incentive auction process that LPTV and TV translator stations, including digital replacement translators (DRTs), will not be protected in the repacking process. However, the FCC opened a Special Displacement Window permitting displaced LPTV, TV translator, and DRT stations an opportunity to select a new channel. See our article here and here.
In October 2015, the FCC decided that LPTV operations may continue on new wireless band frequencies until the wireless companies have “commenced operations,” which the FCC defines as the date the wireless company conducts “site commissioning tests.” In other words, the wireless operator needs to buy and test equipment before it fully starts operations, and once it starts the process through testing on the new spectrum, the LPTV operators need to cease operations. See our article here for further details.
The FCC also announced that LPTV stations and TV translators can share channels, or can even share channels with full-power stations. Channel sharing with a full-power station would confer some degree of protection against their channel being bumped by future full-power TV facilities changes, as long as the channel sharing arrangement is in place. See our article here.
It remains an open issue whether LPTVs on ch. 6 may continue transmitting, post-digital transition, an analog audio channel so that “Franken FMs” (radio stations received on FM radio receivers on 87.7 MHz that really are the audio portion of the LPTV’s programming). See our summary of the proposals here.
Main Studio Rule
In October 2017, the FCC decided to abolish all main studio requirements, including the requirement that a station maintain a minimum staff presence and program origination requirements. The elimination of these requirements was effective as of Jan. 8, 2018. See our summary here.
Market Modifications
See Retransmission Consent section below.
Modernizing Media Regulation Inquiry
Since 2017, the FCC has placed at least one Media Modernization item on each monthly open meeting agenda. Already the FCC has initiated a number of proceedings to eliminate or modify outdated media regulations, and has already eliminated the following: the main studio rule; the obligation to maintain paper copies of the FCC’s rules; the obligation to post copies of FCC licenses at station control points (which became effective on Feb. 8, 2019 — see our article here); the obligation to file paper copies of various contracts with the FCC; and the requirement to file ancillary/supplementary DTV service reports annually, unless a station actually provided ancillary/supplementary services.
Among the pending items are a proposal to modify local public notice requirements for certain applications, and a proposal to revise MVPD notifications, including the must-carry/retransmission consent election notices sent by broadcasters to MVPDs every three years. At the FCC’s Feb. 14, 2019, meeting, the FCC adopted a Report and Order eliminating the obligation to file mid-term EEO reports after the next license renewal cycle. See our summaries here and here. Stay tuned for more FCC efforts to eliminate or modify unnecessary regulations.
Over-The-Top Video As A Multichannel Video Programming Distributor (MVPD)
The Supreme Court’s 2014 Aereo decision 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 Hulu and Sling. That same year, the FCC released a 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.”
The comment cycle in this proceeding has closed, and the matter remains under consideration by the FCC. Click here for more on this item. Resolution of the proceeding stalled in 2016 under Chairman Wheeler, according to trade press reports, and whether the Pai FCC will address it remains unknown.
Copyright issues about OTT systems continue to be litigated in the courts. A 2015 court case in California determined that, under the Copyright Act, OTT providers qualified as “cable systems” that could rely on the statutory license to retransmit the signals of local television stations. See our summary here. However, in December 2015, a District Court in Washington, DC reached the opposite conclusion (see our summary here), and in March 2016, another court in Illinois agreed with the DC court’s decision (see our summary here).
The Ninth Circuit Court of Appeals then overturned the California decision, concluding in March 2017 that FilmOn X, an Aereo-type service, is not a “cable system” for Copyright Act purposes. See our summary of that decision here. Following the defeat in the Court of Appeals, FilmOn reached a settlement of its disputes with broadcasters and dismissed all further appeals, so these cases may be over for now.
The Copyright Office is looking for comments on its tentative conclusion that the Copyright Act’s definition of a cable system does not include online video services like those of Aereo and FilmOn. Reply comments in that proceeding were due in April 2018. See our articles here and here for more information.
In the wake of the Aero and FilmOn decisions, a new nonprofit service called Locast has arisen, retransmitting over-the-air TV signals to viewers through the internet. Founders of the service claim that a nonprofit service like this is legal under an exception to the Copyright Act provisions that blocked the Aereo and FilmOn services. The Locast service has not yet been challenged in court.
Network Nonduplication/Syndicated Exclusivity
See the Retransmission Consent discussion below.
Ownership Limits
Every four years, the FCC is required by Congress to review and possibly update its broadcast multiple ownership rules. In May 2016, the Third Circuit Court of Appeals in Philadelphia issued an opinion faulting the FCC for not completing any required review of its broadcast ownership rules in 9 years. The court ordered the FCC to meet with certain parties who brought the appeal to finalize a timetable for FCC review of the rules designed to promote minority ownership of broadcast stations. At the same time, the court threw out the FCC’s 2014 decision determining that television joint sales agreements were attributable interests. A summary of the court’s decision is available here.
In August 2016, the FCC released a Second Report and Order to complete the review begun in 2014 and respond to the court’s decision. The FCC retained the local TV ownership restrictions, the dual network restriction, and the radio/TV cross-ownership restrictions. The FCC also decided to adopt a new obligation for commercial TV stations to disclose any shared services agreement by placing a copy of the agreement in their online public inspection file (but the FCC did not make SSAs attributable). The FCC retained the newspaper/broadcast cross-ownership prohibition but added a waiver exception for failed and failing broadcast stations and newspapers. Appeals of that decision remain pending in the Third Circuit Court of Appeals.
In November 2017, in response to petitions for reconsideration of the August 2016 decision, the FCC took a number of steps to roll back its regulation of media ownership. Specifically, the FCC:
- Repealed the newspaper-broadcast cross-ownership rule.
- Repealed the radio-television cross-ownership rule.
- Eliminated the requirement that at least eight independently-owned television stations remain in the market after ownership of two stations is combined, i.e., the “Eight Voices” test.
- Incorporated a case-by-case review option of the prohibition against common ownership among the top four stations in the market.
- Repealed the attribution rules for television joint sales agreements (JSAs).
- Retained the disclosure requirement for shared service agreements (SSAs) involving commercial television stations.
- Adopted an incubator program to promote new entry and ownership diversity in the broadcast industry.
These revisions went into effect in February 2018. However, the decision is pending review in the Third Circuit, where the commission’s media ownership rules have essentially been under review in one form or another for more than 15 years.
Public interest groups challenging the November 2017 order filed their briefs in December, which did not specifically question the merits of the individual components of the FCC decision, but instead argued that no ownership rules should be allowed to change without an effective FCC program to bring about more diversity in broadcast ownership. The FCC will respond in March. A decision in the case could be expected late this year or early next.
In December 2018, the FCC initiated a new Quadrennial Review of its multiple ownership rules. A copy of that Notice of Proposed Rulemaking is available here. Among other things, the FCC is seeking comment on all aspects of the local TV ownership rule, and whether the current version of the rule is necessary to serve the public interest in the current television marketplace.
If retained, the FCC asks if there should be more explicit rules as to when two Top 4 TV stations in a market can be co-owned, rather than the ad hoc process adopted in November 2017. The FCC is also seeking comment on whether the Dual Network Rule, which effectively prohibits a merger between or among the Big Four broadcast networks (ABC, CBS, Fox, and NBC), is necessary in the public interest as a result of competition, or whether it should be modified or repealed. See our summary of the Quadrennial Review here. The comment deadline will be 60 days after the publication of this NPRM in the Federal Register, which has not occurred as of this writing.
Ownership Reporting
All commercial and noncommercial broadcasters will be required to file biennial ownership reports by Dec. 1, 2019. These reports will provide a snapshot of the ownership of broadcasters, accurate as of Oct. 1, 2019. See our summary of this obligation, here.
As part of its Media Modernization efforts, the FCC has eliminated the obligation to file paper copies of network affiliation agreements, lender agreements, corporate bylaws, and similar documents with the FCC. Instead, a broadcaster may either upload copies of those materials to its online public file, or provide a list of such documents in its online public file, and provide a copy to any requesting party within seven days of the request. However, copies of Time Brokerage Agreements and Shared Service Agreements must be uploaded to the online public file. See our summary here.
The FCC long ago 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 that proceeding were due in 2013. See our summary here.
The FCC announced in 2016 that it would address these issues in a subsequent decision. It remains to be seen whether a Republican FCC will address these issues.
Political Broadcasting
While 2019 is not itself a big political year, stations should still pay close attention to their political broadcasting obligations. There are local elections in many states. There are also likely to be the occasional special election to fill vacated seats in various elective bodies. Moreover, we have already seen a number of candidates for president in 2020 declare their intention to run. With primaries early in 2020, we expect political election spending to begin in crucial primary states early in 2019, and the lowest unit rate windows for the Iowa caucuses and the New Hampshire primary will begin late this year.
For more information on the political broadcasting rules, see our Guide to Political Broadcasting here. In addition, the NAB’s 18th edition of its Political Broadcast Catechism is a helpful guide to answering political advertising questions. While we can’t summarize all of the political advertising rules here, there are a few key concepts, including:
Lowest unit charges must be extended to any political candidate (federal, state or local) 45 days before any primary and 60 days before any general election. See our refresher here. Federal candidates, like those running for president, have equal opportunity and reasonable access rights even outside these political windows. 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. See our refresher on reasonable access here.
While stations do not have an obligation to sell time to candidates for state and local races, once they decide to do so, all other political obligations arise. Thus, lowest unit rates and equal opportunities apply to state and local candidates, just as they do to candidates running for federal office. See our article here for more on this reminder.
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 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. Such a claim was made to a station by at least one Republican presidential candidate in 2016. See our article 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 recent elections, 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.
In 2015, 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].” That proceeding remains pending. See our summary of the issues here.
Separately, the Sunlight Foundation and Campaign Legal Center filed complaints against 11 large market stations alleging that their online political files were incomplete. See our summary of the complaints here.
On Jan. 6, 2017, the FCC staff issued two decisions, summarized here, which stated that broadcasters need to assess and include in their public file all of the issues of national importance addressed in political ads, and also need to inquire of issue ad sponsors about the identity of all of their executive officers or members of their board of directors, especially if the sponsoring group list only one person’s name on the disclosure forms submitted to the station.
In February 2017, the Media Bureau, under Chairman Pai, rescinded the Jan. 6 guidance and decided that such issues need to be addressed by the full commission and not at the bureau level. See our article here. However, those items have been on circulation among FCC Commissioners since May 2018, so additional guidance may be forthcoming. In August 2017, two new complaints raising similar issues were filed at the FCC (see our article here), so these matters may also be addressed by the commission.
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 2015, 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 2014 elections, 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 Mr. Bloomberg, which may distinguish it from prior cases. That issue remains pending. See our summary here.
In another proceeding of note, the Federal Election Commission has issued a public notice asking for comment on a petition for rulemaking that seeks to change the size of the textual sponsorship disclosures that need to be made in candidate advertising.
The proposal would change the current FEC requirement requiring candidates to make disclosures in their ads that are 4% of screen height to a requirement that would allow disclosures that are 2% of screen height in HD broadcasts, while retaining the 4% requirement for standard definition broadcasts. Comments are due at the FEC on April 15, 2019. See our article here for more details.
If the FEC finds that the proposal has merit, it would start a formal rulemaking process to change its rules. The FCC, which has a similar requirement that prohibits broadcasters from accepting ads without a disclosure that is at least 4% of screen height would also have to change its rules for this proposal to have any meaningful effect.
Public Inspection File
TV stations are required to place their public inspection files online using an FCC-hosted website. Broadcasters are no longer required to retain copies of letters and emails from the public in their public inspection files. The elimination of this rule removes any responsibility for broadcasters to maintain a paper public file at their studio. See our article here.
On a related note, the FCC has changed TV renewal applications to remove the requirement that TV stations identify any comments from the public about violent programming on the station. Copies of joint sales agreements, time brokerage agreements, and shared service agreements must be uploaded to the online public file, with confidential information redacted. See our separate discussion in the Ownership Reporting section regarding the FCC’s elimination of the obligation to file paper copies of contracts, but with new online public file obligations regarding those contracts.
For a summary of the general online public file obligations, see our summary here.
Regulatory Fees
The method for calculating TV regulatory fees will be changing beginning this year. It will be moving to a system for setting fees more like that used in radio, by assessing fees for full-power broadcast TV stations based on the population covered by the station’s contour, instead of by the station’s DMA.
For FY2018 regulatory fees, which will likely be due sometime in August or September 2019, TV stations should expect their regulatory fees to be based on an average of the current DMA methodology and the population covered by a full-power broadcast TV station’s contour.
Thereafter, in 2020, the FCC will assess regulatory fees for full-power broadcast TV stations based solely on the population covered by the station’s contour. For more information, see here.
Retransmission Consent/Must Carry/STELAR
In July 2016, the previous FCC chairman announced in a blog post that the FCC was ending its inquiry into the retransmission consent rules without the adoption of any new rules. He stated that, after an extensive review of the record, “it is clear that more rules in this area are not what we need at this point.”
He noted that the FCC’s existing “totality of circumstances” standard for weighing complaints about violations of the good faith requirements was sufficiently inclusive to give the FCC scope to take enforcement action. “To start picking and choosing, in part, could limit future inquiries.” See our analysis here and here. The item was formally removed from circulation by Chairman Pai.
As required by the STELA Reauthorization Act of 2014 (STELAR), the FCC adopted a new rule prohibiting the joint negotiation of retransmission consent agreements by two stations in the same market that are not “directly or indirectly under common de jure control,” regardless of whether those stations are among the top 4 stations in the market.
In September 2016, the FCC’s Media Bureau entered into a consent decree with Sinclair regarding this prohibition. While the company did not admit liability, the consent decree includes a finding that the company engaged in such negotiations on behalf of 36 non-owned stations. The company agreed to make a $9.495 million settlement payment and to implement a compliance plan. See our summary here.
STELAR also provides satellite television companies (essentially Dish Network and DirecTV, now owned by AT&T) with renewed eligibility, until the end of 2019, to rebroadcast the signals of over-the-air television stations without authorization from every copyright holder of the programming broadcast on those stations, through a so-called blanket compulsory license. Our summary of STELAR is available here. Congress is expected to deliberate whether to extend STELAR beyond December 2019, so stay tuned for more details on those issues as the year progresses.
STELAR 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. In 2015, following a rulemaking proceeding to address these proposals, the FCC adopted new rules permitting the modification of satellite television markets.
Under the new rules, the FCC may, upon the request of a television station, satellite operator or county government, modify a particular commercial TV broadcast station’s local television market to add or delete communities from the market.
A related Further Notice of Proposed Rulemaking proposes getting rid of the network nonduplication protection rules and the syndicated exclusivity rules, although the current Chairman has not indicated any interest in adopting these proposals. 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. See our discussion here for more details of the proceeding.
Retransmission consent/must carry election letters were required to be mailed by TV stations and received by MVPDs no later than Oct. 1, 2017, in order to be effective. These elections cover the period from Jan. 1, 2018, to Dec. 31, 2020. Copies of the election letters must be available in the station’s online public inspection file.
Sponsorship Identification
The FCC under the previous administration vigorously enforced its sponsorship ID rules, and the FCC under Chairman Pai has continued those enforcement efforts. In December 2017, the FCC’s Enforcement Bureau proposed a fine of more than $13.3 million for apparent sponsorship identification violations by Sinclair Broadcast Group.
The FCC alleges that program segments contained in news broadcasts of certain Sinclair stations and certain program-length reports featured stories about the Huntsman Cancer Institute which were not tagged as being sponsored — even though they were broadcast as part of a contract that required that Sinclair air advertising for the institute and develop programming about the Institute’s activities. See our summary here.
In January 2016, the FCC’s Enforcement Bureau announced a consent decree with Cumulus Radio to settle a matter in which full sponsorship identification announcements were not made on issue ads promoting an electric company’s construction project in New Hampshire.
In the consent decree, Cumulus agreed to pay a $540,000 civil penalty to the FCC for the violations of the rules — plus it agreed to institute a company-wide compliance program to make sure that similar violations did not occur in the future. See our article here.
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.
While a proposal was filed in 2015 suggesting that many sponsorship identification obligations be moved online, similar to the disclosure obligations for contest rules (see our summary of the proposal here), that proceeding has not progressed further. It is unclear if the Pai FCC will revive that proposal.
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.
Sponsorship Identification Online and In Social Media — In addition to FCC rules, the FTC requires that parties that have received any compensation in exchange for posting any materials online, disclose that the online material was sponsored. The extent of the sponsorship varies by the technological capabilities of the medium — with a “#ad” being the likely disclosure on Twitter, with more extensive disclosures on other platforms.
As broadcasters incorporate website content and social media mentions with on-air advertising campaigns, they should be aware of these obligations. See our summary of the FTC rules here, and an article here about the recent letters from the FTC to over 90 online “influencers” reminding them to abide by this policy.
STELAR
See Retransmission Consent section above.
TCPA
The Telephone Consumer Protection Act (TCPA) is a law that restricts businesses and organizations from making calls and texts to consumers’ residential and wireless phones without having first received very specific permission from the recipient. Sending texts to broadcast station viewers or listeners who are contained in a station’s loyal listener or loyal viewer clubs can lead to liability if the proper releases are not obtained, and collecting text addresses from contest participants and adding them to station databases can similarly be problematic.
Even where proper permission has been obtained, there can be liability for calls and texts to wireless numbers that have been reassigned, as well as to viewers or listeners who have revoked their consent.
Because violations of the TCPA can result in civil liability of $500 to $1,500 per call or text plus FCC fines, and as there have been a number of law firms around the country that have been active in filing class action suits against businesses to collect those potentially very high per-call damages, broadcasters need to ensure that their practices comply with the TCPA and the FCC’s rules which implement the Act.
In June 2016 a major radio group, iHeart Media, settled a TCPA lawsuit for $8.5 million. Read more about this issue here. The status of TCPA enforcement is currently in flux, with the DC Circuit having set aside the FCC’s interpretations of the statute and other circuit courts split on some TCPA interpretations. The FCC is expected to adopt new TCPA interpretations responding to the DC Circuit in the near future.
Tower And Antenna Issues
Under new legislation enacted by Congress in July 2016, rural towers that are less than 200 feet in height may need to have tower lights installed. The FAA is to conduct a rulemaking to adopt rules to implement this requirement. See more about this issue here. Many in the communications industry have expressed concern that the costs of implementing this rule outweighed any potential benefits of the rule.
In a blog post in March 2018, FCC Commissioner Michael O’Rielly raised questions about whether the facts about communications towers had been fully considered when the legislation was adopted. He questioned why communications towers have been singled out, while wind turbines and electric towers are not covered, and he asked whether this disparate treatment was really justified. See our article here. Congress or the FAA may be revisiting this legislation in the near future.
The FCC has aggressively enforced 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.
In December 2015, the FAA announced new standards for tower lighting. See our summary here. The FAA’s guidance on tower lighting is now effective and will apply to any modified towers.
UHF Discount
Since 1985, in an effort to encourage further TV use of the UHF band over traditional VHF channels, 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 September 2016, the commission voted 3-2 to eliminate the UHF discount. See our analysis here and here. That decision was challenged in court, and a petition for reconsideration was also filed with the FCC. In April 2017 meeting, the FCC voted 2-1 to reinstate the UHF discount. See our summaries here and here.
In July 2018, the US Court of Appeals in the District of Columbia dismissed, on procedural grounds, an appeal of the decision to reinstate the UHF discount. See our article about the previous stay denial here.
Separately, in December 2017, the FCC initiated a comprehensive review of the national audience reach cap and the UHF discount. The FCC’s Notice of Proposed Rulemaking does not draw any conclusions, but is seeking comment on the following issues:
- Whether the FCC has the statutory authority to modify or eliminate the national cap.
- If statutory authority exists, whether the national cap should be modified or eliminated in light of increased video programming options or other factors since the FCC adopted the current 39% cap.
- If a national cap is retained, whether it should be raised simultaneously with the elimination of the UHF discount and if so, by how much.
- Whether the national cap continues to serve the public interest and if so, what public interest goals, such as localism, it continues to foster.
- The benefits and costs associated with maintaining or increasing the cap. The comment cycle has closed in this proceeding.
Video Description
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 (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.
As of July 1, 2018, each broadcast station affiliated with a top 4 network (ABC, CBS, Fox and NBC) in the top 60 markets, and each of the top 5 non-broadcast networks (currently Disney Channel, History, TBS, TNT and USA) must provide 87.5 hours of qualifying video-described programming per quarter on each stream or channel on which it carries an included network. This is an increase from the previous obligation to carry 50 hours of qualifying video-described programming per quarter.
The FCC provided flexibility to allow some non-prime time, non-children’s video-described programming to count towards the additional 37.5 hours per quarter. The FCC left unchanged the rule that a particular video-described program/episode can be counted toward the benchmark no more than a total of two times on each channel on which the program is shown.
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/Wireless Microphones
The FCC has proposed that in each TV market, one UHF TV channel (above channel 21) that is not assigned to a TV station following the repacking will be designated for use by TV white space (TVWS) and wireless microphones. In certain markets, where TV stations are placed into the wireless 600 MHz band, the FCC proposed a second open TV channel for shared use by TVWS devices and wireless microphones, in addition to the other channel it is already proposing to reserve.
Microsoft has been pushing unlicensed TV white spaces as a rural broadband solution. The NAB is pushing back, particularly on Microsoft’s effort to set aside one 6 MHz channel in each market for unlicensed devices. Notably, Commissioner (now Chairman) Pai dissented on this issue, as did Commissioner O’Rielly. So it remains to be seen whether this proposal goes anywhere under the new Republican-led Commission.
Microsoft was not an incentive auction participant, and is arguably trying to get access to unlicensed airwaves without paying for them. There are numerous technological hurdles for Microsoft and other white space operators, and there is of course the potential for harmful interference to over the air broadcasting.
The FCC also proposed 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 TVWS devices and wireless microphones in the market. The pleading cycle has ended for this proceeding, but questions have been raised about whether these proposed spectrum reservations would unlawfully prioritize unlicensed facilities over licensed ones.
In February 2016, in response to a petition filed by the NAB, the FCC released a Notice of Proposed Rulemaking and Order, proposing to amend its rules to improve the quality of the geographic location and other data submitted for fixed TVWS devices operating on unused frequencies in the TV bands and the new 600 MHz wireless band.
According to the NPRM, the proposals are designed to improve the integrity of the white space database system and to increase the confidence of all users of these frequency bands that the white space geolocation/database spectrum management scheme fully protects licensees and other authorized users.
In November 2016, the NAB asked the FCC to either adopt and enforce geolocation requirements that allow TVWS devices to coexist with licensed operations, or eliminate or suspend TVWS operations. NAB also suggested that TVWS database managers are not complying with push-notification requirements about updated channel availabilities because there are no industry standards for implementing push notifications, and TVWS manufacturers have not taken steps to implement the requirements. More information is available here.
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 July 2017, the FCC announced new point-of-sale disclosure requirements for 600 MHz licensed wireless microphones. Effective as of April 2018, the required disclosure language reads as follows:
“This particular wireless microphone device operates in portions of the 617-652 MHz or 663-698 MHz frequencies. Beginning in 2017, these frequencies are being transitioned by the [FCC] to the 600 MHz service to meet increasing demand for wireless broadband services. Users of this device must cease operating on these frequencies no later than July 13, 2020. In addition, users of this device may be required to cease operations earlier than that date if their operations could cause harmful interference to a 600 MHz service licensee’s wireless operations on these frequencies.”
In July 2017, the FCC refused to permit wireless microphone users that operate on an unlicensed basis in the TV bands, the 600 MHz duplex guard band and duplex gap to register their operations in the TV white spaces databases in order to obtain interference protection from white space devices.
However, the FCC issued a Further Notice proceeding in which it proposes to permit certain qualifying professional theaters, music, and performing arts organizations to obtain a Part 74 license that would allow them, as licensees, to obtain interference protection in the TV bands and, when needed, also to operate in other spectrum bands authorized for licensed wireless microphone operations. The pleading cycle for this proceeding has closed.
Separately, the Further Notice revisits the FCC’s previous decision that companies that use 50 or more wireless microphones have the same interference protection as low power wireless audio devices. The Further Notice proposes expanding this group to include (a) wireless microphone users that routinely use 50 or more wireless microphones where the use is an integral part of major events or productions (as provided under existing rules) and (b) wireless microphone users that otherwise can demonstrate a particular need for, and the capability to provide, professional, high-quality audio that is integral to their events or productions.
In addition, the FCC clarified various rules for licensed wireless microphone use in the 169-172 MHz band, the 941.5-944 MHz band, and the 1435-1525 MHz band.
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