What’s Happening In Washington

With so many regulatory issues to follow, how are TV broadcasters to keep up with it all? 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:

Aereo

Although not technically an FCC issue, the Aereo litigation should be closely monitored by all TV licensees because of its potential impact on the retransmission consent process. Like other forms of over-the-top video distribution systems, Aereo uses the Internet to provide broadcast signals to subscribers. But Aereo has designed a system using thousands of individual over-the-air antenna receivers and a digital system to record and distribute via the Internet the television programming supposedly received by these antennas, at the direction of users.

The system was designed in an effort to avoid copyright issues, and thus retransmission consent fee payments that would otherwise attach to any retransmission of a television program. While the Second Circuit Court in New York has denied broadcasters’ efforts to stop Aereo’s service, a court in California has taken the opposite approach and issued an injunction against a similar service.

As Aereo expands beyond New York, more judicial opinions are possible, and the New York courts could also issue further guidance. Ultimately, the issue raised by these cases may end up at the Supreme Court, or Congress could be called upon to resolve the issue. Given the potential importance to station income from retransmission consent fees, stations should continue to monitor this important issue.

For more on this issue, see our Broadcast Law Blog article here.

Class A TV

In a series of recent actions, the FCC staff has beefed up enforcement of Class A TV requirements, fining such stations for failing to file children’s programming reports and other required filings. The FCC staff has even asked whether certain Class A TV stations should be reclassified as LPTVs for failing to produce and air the amount of local programming required for Class A stations, or otherwise failing to comply with the rules applicable to full-power TV stations.

Being reclassified as an LPTV station has even been offered by the FCC staff as a way to avoid some of the fines imposed for these violations. Class A stations that do not meet these obligations and are reclassified by the FCC as LPTV stations would be in jeopardy of losing their interference protections and being displaced in the FCC’s likely spectrum repacking in preparation for selling some of the TV spectrum to wireless broadband users.

And because LPTV stations are ineligible to participate in the incentive auction, a loss of Class A status could have a significant financial impact on the station. Some Class A TV stations have already been reclassified as LPTVs in light of their failure to respond to these requests from the FCC.

For more on this issue, see our Broadcast Law Blog article here.

Closed Captioning

TV Closed Captioning — In late 2011, the FCC overturned nearly 300 waivers previously issued to providers of television programming exempting them from compliance with the television closed captioning rules on the basis that compliance would constitute an undue economic burden. Finding that the earlier waivers had been granted in error, the FCC reversed the waivers and clarified the proper standard that will apply to undue economic burden waivers.

That standard is significantly higher than the review initially applied to these particular programming providers. Parties whose waivers were rescinded had 90 days to seek new waivers and many such waiver requests were filed in 2012. The FCC has begun reviewing the captioning waivers and issuing public notices soliciting comments. Consumer groups have actively opposed the waiver requests. So far the commission has dismissed some requests as deficient, and sought additional information from others. The FCC’s review of these waiver requests will continue this year.

IP Captioning — In January 2012, the FCC adopted rules that require closed captioning of certain full-length video programming delivered via Internet protocol (i.e., IP video). The rules are a result of the 21st Century Video and Communications Accessibility Act (CVAA) federal law which is designed to improve the accessibility of media and communications services and devices.

The IP captioning rules became effective in 2012 and will be phased in over time. Currently, all nonexempt full-length prerecorded video programming that is not edited for Internet distribution and is delivered using Internet protocol, and all live or “near live” programming, must be provided with closed captions if the programming was published or exhibited on television in the United States with captions on or after Sept. 30, 2012. This requirement governs 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.

All prerecorded programming that is substantially edited for the Internet must be captioned if it is shown on TV with captions on or after Sept. 30, 2013.

Currently, brief video clips and outtakes (including excerpts of full-length programming) are also exempt, unless “substantially all” of a full-length program is available via IP in multiple segments. In a reconsideration order released in June, the FCC directed the Media Bureau to issue a Public Notice seeking updated information on this topic within six months. The reconsideration order states that the FCC may reconsider its decision with respect to video clips if the record developed in response to the Public Notice demonstrates that consumers are denied access to critical areas of video programming due to lack of captioning of IP-delivered video clips.

The rules also impose new requirements on manufacturers of equipment (such as set-top boxes, PCs, smartphones DVD players, Blu-ray and tablets) designed to receive or play back video programming transmitted simultaneously with sound and integrated software. Consumer-generated media — defined as content created and made available by consumers to websites and services on the Internet, including video, audio and multimedia content — are exempt from the captioning rules.

For further information, see our blog entry here.

EEO Rules

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 EEO audits was announced on June 28, with replies to the audits due Aug. 12 (though this round was limited to radio licensees).

The FCC issued fines in 2012 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. 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.

For more information about EEO enforcement, see our Broadcast Law Blog article here and here.

Emergency Information

In April, the FCC released the results of the November 2011 national EAS tests. The report noted that the approximately 17% of broadcasters that failed to file a report after the test could face enforcement action.

Also in April, the FCC released an order requiring that emergency information provided in video programming be made accessible to individuals who are blind or visually impaired. The order requires the use of the secondary audio stream to convey televised emergency information aurally, when such information is conveyed visually during programming other than newscasts (e.g., in an on-screen crawl). These requirements will take effect on May 26, 2015.

For more on Emergency Alert Service issues, see our Broadcast Law Blog 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 “zombie alerts” that fortunately proved to be false). The hacking of station EAS systems showed that the new EAS CAP system, which relies on Internet connections, may be vulnerable to such attacks. The FCC issued reminders to stations to ensure that the password settings on CAP equipment are changed from their default factory settings, and that EAS messages are monitored carefully. See our article here for more information.

FCC Commissioners

Currently there are three FCC Commissioners: Acting Chairwoman Mignon Clyburn (D), Jessica Rosenworcel (D), and Ajit Pai (R). Tom Wheeler has been nominated by President Obama as the new FCC chairman. A confirmation hearing was held on June 18 and the nomination remains pending before the Senate. A Republican nominee to the FCC has not been named yet. Most observers believe that the Wheeler nomination will not be acted on by the Senate until a Republican nominee has emerged, been vetted and is also ready for simultaneous approval.

Filing Freeze

On April 5, 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. The NAB has on several occasions asked the FCC to lift the freeze, citing the adverse impact on the television industry and the unknown timeline for the incentive auction. To date, however, the freeze remains in place. For more on the freeze, see our Broadcast Law Blog article 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 is seeking comment on these foreign ownership restrictions. Comments were due April 15 and reply comments were due April 30. See our summary here.

Indecency

Last June, the Supreme Court ruled that the FCC had not given adequate notice of a change in its indecency rules before issuing fines for fleeting expletives. While that decision threw out the fines issued to two networks and their affiliates for the Billboard Music Awards on Fox and an episode of ABC’s NYPD Blue, it did little to clarify the FCC’s indecency enforcement regime. Nonetheless, the FCC seems to be quietly disposing of thousands of complaints in an effort to reduce the backlog.

According to an April 1 FCC Public Notice, the commission has reduced the backlog of complaints by dismissing 70% of all complaints – over a million. While this leaves many more complaints to be resolved, the FCC has asked for comments as to whether it should continue to apply the hard-line enforcement standard against fleeting expletives that was adopted by recent FCC Commissioners, or whether it should go back to the old standard that required a more conscious and sustained use of expletives to warrant FCC action. Reply comments in this proceeding were due July 18 but, on July 12, the commission issued an order extending the reply comment deadline until Aug. 2.

For a description of some of the issues involved in this proceeding, see our Blog articles here, here and here.

License Renewals

Television stations (including LPTV stations, TV translators and Class A stations) began the renewal process in 2012. Renewal applications for TV stations in Illinois and Wisconsin are due on Aug. 1 and in Iowa and Missouri on Oct. 1.

In reviewing license renewals, the FCC is continuing to focus on issues that have been important in previous cycles, such as public inspection file issues. This renewal cycle also introduced a few new certifications, including whether a station has been off the air for any significant period of time during the last license term, and whether stations have complied with the policy regarding nondiscrimination in the sale of advertising time.

The FCC no longer mails reminders to licensees, so it is incumbent upon stations to know when their license expires and file their renewal applications on time. Without a timely filed renewal application, stations are not authorized to operate and face the potential of fines or license cancellation.

LPTV Stations and TV Translators

All LPTV stations and TV translators operating out-of-core (on channels above ch. 51) were to have ceased operations by the end of 2011. All analog LPTV and translator stations must convert to digital operations by Sept. 1, 2015.

See our summary of these requirements here.

Online Public Inspection File

As of Feb. 4, 2013, all TV stations were required to place their entire public inspection file online using an FCC-hosted website, with two exceptions: 1) Letters and e-mails from the public, which should not be posted online for privacy reasons; and 2) Political file materials for any station that is not in a top 50 market and/or are not affiliated with ABC, CBS, Fox or NBC. These non-Big 4/top 50 stations instead can keep political file materials in their paper public files until July 1, 2014. Even for Big 4, top 50 market stations, any political file material generated prior to Aug. 2, 2012, can also remain in the paper file.

The FCC is responsible for adding electronically-filed forms to the online public files, but licensees are required to manually upload many materials. For example, TV stations in Texas must manually upload their annual EEO public inspection file reports to their online public files by April 1. Similarly, all TV stations must uploaded their quarterly issues/programs lists and children’s commercial limit certifications by April 10 (the FCC will be responsible for adding the FCC Form 398 filings to each TV station’s online public file).

In June, the FCC Media Bureau released a Public Notice seeking comment on the impact of the online political file requirements applicable to broadcast television stations. The bureau also seeks comment on the ability of stations to comply with the upcoming July 1, 2014, deadline, and asks whether any changes should be made to facilitate compliance.

Finally, the Bureau seeks 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. The petitioner suggested an alternative of keeping this information in paper public files at the stations, consistent with prior practice, and providing an opt-in opportunity for stations to upload aggregate information about political buys. Comments in this proceeding are due Aug. 26 and replies are due Sept. 23.

See a summary of the online public file obligations here and the June public notice here.

Ownership Limits/Shared Service Agreements

In 2009, as required every four years by Congress, the FCC initiated a proceeding to review and possibly update its broadcast multiple ownership rules. The issues set out in the FCC’s 2011 NPRM include proposed liberalization of the restrictions on the cross-ownership of broadcast stations and newspapers, and the elimination of rules restricting the ownership of radio and TV stations in the same market.

The FCC has also proposed the attribution of TV shared services agreements (i.e., potentially making a shared services agreement count as if it were an ownership interest in a multiple ownership analysis). The FCC did not propose to change its local TV ownership limitations, which currently prohibit combinations of any of the top-four stations in a market, and limit an owner to only one TV station in a market unless there are at least eight independent marketplace TV station owners after any proposed combination.

In its NPRM, the FCC did ask whether waivers of any of these rules should be allowed in any particular circumstances. The commission is also looking for suggestions on how these rules can be used to promote the minority ownership of broadcast stations. To that end, in December, the FCC gave interested parties a limited window of time to specifically address how any of the proposed changes in the rules would affect minority ownership of broadcast properties. The deadline for reply comments on that question was January 4. See our summary of the request for comments, here.

In response to concerns from some Commissioners that relaxation of media ownership rules would adversely impact minority ownership, the FCC announced a delay in the proceeding in order to allow the Minority Media and Telecommunications Council to commission BIA Kelsey to study the impact of any further consolidation in media ownership on minority broadcast operators. That study was released on May 30, and concludes that the impact of newspaper-broadcast cross-ownership on minority and women broadcast ownership is “not sufficiently material to be a material justification for tightening or retaining” the FCC’s cross-ownership rules. The FCC is seeking comment on the study. Comments are due July 22 and replies are due Aug. 6.

See our summary of these issues here, here and here.

Ownership Reporting

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 last set of commercial ownership reports were filed in late 2011, with the next set due by Nov. 1, reporting on all licensees’ ownership as of Oct. 1. The FCC has issued a Notice of Proposed Rulemaking asking several questions about these reports.

Among the issues raised is whether it should require that every individual with an attributable interest in any station (and perhaps certain nonattributable owners) to get a unique FRN — a unique identifier for the FCC’s electronic systems. This would require that the attributable owner provide to the FCC its Taxpayer Identification Number (for an entity) or his or her Social Security Number (for an individual).

The proposal also suggests changing the due date for the report to Dec. 1 (while retaining the Oct. 1 date as the “snapshot” date for the information contained in the reports). The FCC is also seeking additional comment on whether biennial ownership reporting requirements should include interests, entities and individuals that are not attributable because of (a) the “single majority shareholder” exemption and (b) the exemption for interests held in eligible entities pursuant to the higher “equity debt plus” threshold. Reply comments in this proceeding were due March 1. See our summary here.

Political Broadcasting

Although 2013 is an off-cycle election year, stations in many states may encounter political obligations this year. There are governor’s races in Virginia and New Jersey, mayoral races in a number of major cities including New York and Los Angeles, and vacant seats in a number of congressional districts — including several Senate seats — where special elections will be necessary and primary races will begin heating up. Many other jurisdictions have elections for local offices.

In these off-year elections, broadcasters need to remember that, while reasonable access applies only 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 you don’t have to sell to candidates for governor or mayor, but 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.

With state and local races in the forefront, stations also need to be careful about on-air employees who decide to run for some local office, as their on-air appearances will trigger equal opportunities rights for their opponents. See our story about a recent case of a radio sportscaster who decided to run for mayor and the issue that it raised under the political broadcasting rules, here.

In some of the races to fill congressional vacancies, and perhaps in connection with some of the more contentious state and local 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.

Stations also need to be aware that some members of Congress want to expand various disclosure requirements for issue advertisers. For example, in a recent Senate oversight hearing, several Senators suggested the FCC should require stations to collect more information on the sponsors of these ads — including not only the identification of the governing board of these groups, but also the source of funding for the organizations. See our article on the issues that came up in the recent hearing here. This issue also came up during Tom Wheeler’s Senate confirmation hearing for his nomination as new FCC chairman. Stay tuned for more activity on the Hill on these issues.

Public Interest Programming Disclosure

Last year, 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.

A summary of the FCC’s proposals is here.

Retransmission Consent/Must Carry

In 2011, the FCC issued a Notice of Proposed Rulemaking seeking comments on whether its must carry-retransmission consent regime should be modified. The NPRM was driven in part by complaints by certain members of Congress expressing concern when channels are blacked out on MVPDs (multichannel video programming distributors) during the course of retransmission consent negotiations.

Both Congress and the FCC may be considering these issues further in 2013, particularly as Congress considers a possible reauthorization of the Satellite Television Extension and Localism Act of 2010 (STELA). STELA, which is viewed by many in Congress as must-pass legislation prior to its expiration in December 2014, could potentially be used as a vehicle for significant reform of the video marketplace.

Spectrum Reallocation/Repacking

In 2012, a new federal law was enacted to permit the FCC to conduct an incentive auction to clear parts of the TV band for wireless broadband uses.

The incentive auction is actually two auctions: in the “reverse auction,” TV stations may voluntarily participate in one of three ways, and share in auction revenues: a) by agreeing to give up all 6 MHz of spectrum and exiting the business; b) by channel sharing with another station in the market, giving up one 6 MHz channel but retaining must-carry rights for both program streams carried on the shared channel; and c) by agreeing to give up its 6 MHz of UHF spectrum in exchange for 6 MHz of VHF spectrum. The second auction will be the “forward auction,” which will take the spectrum relinquished by broadcasters in the reverse auction and sell it to mobile broadband licensees.

The law requires that the FCC attempt to replicate the current service of any stations that are forced to change channels in order to “repack” the band to make it available for wireless users. The law also authorizes the FCC to compensate TV stations for the costs of repacking, up to $1.75 billion.

In September 2012, the FCC began a rulemaking to implement the law, seeking comment on reverse auction and forward auction procedures, and on the specifics of TV band repacking. The FCC is looking at a number of issues, including reverse auction eligibility and whether to expand eligibility beyond the three options identified in the Spectrum Act, such as by agreeing to accept additional interference. Reply comments were due March 12.

On repacking, the FCC indicates that remaining TV stations post-auction will occupy a smaller portion of the UHF band, and the FCC is asking for public input on how it can do so while also implementing the statutory mandate to make “all reasonable efforts” to preserve broadcasters’ coverage. The NPRM also seeks comment on how to address the possible displacement of low-power stations.

Much of the recent focus has been on determining an acceptable band plan for the 600 MHz band, with a number of industry groups (including NAB and CTIA) uniting to recommend a “Down from channel 51” bandplan that would reduce the potential for broadcast-wireless interference. Meanwhile, the FCC must conduct significant international coordination efforts with Canada and Mexico before proceeding.

Separately, the FCC’s Office of Engineering & Technology is seeking comment on various updates to its OET-69 TVStudy software which will be instrumental in analyzing the interference protection contours of repacked stations. Many broadcasters opposed the changes as being inconsistent with the Spectrum Act, with other groups such as CEA filing in support. Reply comments were due April 5.

Because broadcaster participation in the reverse auction is unknown, the FCC will not know in advance the specific frequencies that will be available in the forward auction, and perhaps also will not know the geographic location of those frequencies. As a result, the FCC is seeking comments on how to make the forward auction framework flexible enough to account for these variables.

The FCC proposes the following post-auction band plan, and seeks comment on it as well as alternative band plans and license block sizes: 5 MHz blocks for flexible use licenses, with the uplink band beginning at ch. 51 (698 MHz) and expanding downward toward ch. 37 based on the amount of reclaimed spectrum. The downlink band would begin at ch. 36 (608 MHz) and likewise expand downward. Guard bands of 6 MHz would be created between mobile broadband use and broadcast use, and the guard bands would be available for unlicensed use. (See “White Spaces,” below).

The FCC is undertaking a lengthy review to examine the complex details and procedures for this first-of-its-kind incentive auction. The FCC has indicated that it anticipates having auction rules in place in 2013, with a view to holding the incentive auction in 2014, although numerous factors could affect that timeline.

A summary of the statutory provisions governing the incentive auction process is available here.

Sponsorship Identification

Video News Releases — The FCC has recently issued fines to television stations for airing video news releases without identifying the party who provided the VNR, or 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.

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 $14,000. 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.  

Video Descriptions

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 in the top 25 markets, and multichannel video programming distributor systems (MVPDs) with more than 50,000 subscribers, must provide approximately four hours per week (for a total of 50 hours per quarter) of video-described primetime and/or children’s programming.

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.

ABC, CBS, Fox and NBC affiliates located in the top 60 markets must begin providing 50 hours a quarter of video described programming by July 1, 2015.

In June, the FCC issued a public notice seeking comment on video description of video programming that is delivered via either television (broadcast and MVPD) or the Internet. The notice seeks comment on a number of issues related to the availability, use, benefits, and costs of video description in television and IP programming, as well as the technical and creative issues associated with providing such video description. Comments are due on Sept. 4 and replies are due Oct. 2.

White Spaces/Unlicensed Devices

On March 1, 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.

In order to identify suitable vacant channels on which to operate without causing harmful interference to incumbent licensed television stations and other users, the unlicensed devices must include geo-location capability and the ability to access a database via the Internet. The FCC has authorized several database managers to manage those interference databases. Expect to see more unlicensed devices operating in the TV white spaces band as a result of these FCC announcements.

As part of the Spectrum Act rulemaking (see above), the FCC is proposing dedicated unlicensed bands of 6 MHz each to separate mobile broadband uses from the post-auction TV bands. The rulemaking indicates that TV white space uses will still be permitted in the TV bands after the incentive auction, subject to the effects of repacking which likely means more limited white spaces between TV stations.

The rulemaking also for the first time would allow unlicensed use on ch. 37, which has traditionally been reserved for radio astronomy and medical telemetry devices, and on two channels used by wireless microphone operators. Given the early stages of the Spectrum Act proceeding, it is too soon to tell whether this proposal will be adopted.