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Nevada Broadcasters Association

From Broadcast Law Blog Archive

The Notice of Proposed Rulemaking in the next Quadrennial Review of the FCC’s ownership rules was adopted in December and was published today in the Federal Register, starting the 60 day period for public comments. Comments on the NPRM will be due on April 29 with reply comments due on May 29. The FCC is looking at numerous issues, including one issue, the rules setting out the limits on the number of radio stations that one company can own in a market, that has not been reviewed in depth in recent Quadrennial Reviews. On the TV side, the FCC is again looking at local TV ownership (specifically combinations of Top 4 stations in a market and shared services agreements) and also at the dual network rule restricting common ownership of two of the Top 4 TV networks. In addition, the FCC is reviewing additional ideas on how to increase diversity in broadcast ownership. Today, let’s look at the FCC’s questions on the local radio ownership rules.

The review of the radio ownership rules may well be the most fundamental issue facing the Commission in this proceeding, as no real changes have been made in those rules since they were adopted as part of the 1996 Telecommunications Act. As we wrote here, the marketplace has certainly changed since 1996 – which was at least a decade before Google and Facebook became the local advertising giants that they now are; and before Pandora, Spotify, YouTube and many other web services offered by tech giants became competitors for the audience for music entertainment. And spoken word entertainment competition was also virtually non-existent – “audiobooks” were a niche product and the concept of a “podcast” would have been totally foreign when the current rules were written. So what are some of the questions about the radio ownership rules that are being asked by the FCC?

The current rules allow one entity to own up to 8 stations (no more than 5 of which can be in one “service” – either AM or FM – the “subcaps“) in the largest markets – markets with 45 or more stations. The limits on station ownership, and ownership in any service, decrease in steps depending on the number of stations in the market. In any market no matter how small, one owner can hold an AM and an FM, but once past that minimum, in the smallest markets, one owner cannot own more than half the stations in the market. Most fundamentally, the FCC asks in the NPRM if these limits are still justified or whether some other limits would be more appropriate. The NAB, for instance, has proposed that there be no limits on AM ownership at all, nor any limits on ownership of stations in markets below the Top 75 rated markets. In the Top 75 markets, the NAB proposes that one owner be allowed to own up to 8 FM stations, and up to 2 more if it successfully incubates a new broadcast owner (see our article here for more on the NAB proposal, and our article here for more on the FCC’s incubator rules).

In connection with this broader question of the limits to adopt, the FCC asks for comments on many more specific issues including:

  • Most fundamentally, the FCC asks whether “broadcast radio” is the relevant market to review when assessing whether the ownership limits still operate in the public interest, or if radio is no longer its own silo, but instead part of a broader media marketplace. In short, do radio stations only compete against other radio stations, or do they compete for listeners and advertising dollars with other media?
  • How do consumers view digital media? Do they see it as a substitute for local radio? Is it just free digital services that compete with radio, or are subscription services also competitors?
  • Would greater consolidation give broadcasters the ability to compete with other media, particularly digital media for listeners and advertisers? If so, how would more consolidated ownership promote more competition with the new media?
  • Would allowing one owner to acquire more stations in a market promote local programming or would it result in less localism?
  • Does In-Band-On-Channel Radio (more commonly known as HD radio, allowing one station to broadcast multiple digital program streams) already provide an effective way for broadcasters to get more voices in a market?
  • If the current limits on ownership are not retained, what limits should be substituted? Should ownership limits be based on numerical caps in markets with a particular number of stations, or should some other limitation (e.g. market or revenue share) be used? Should all stations count the same toward any limits (e.g. should a lower power Class A station count the same as a high power Class C FM station)? Should AM count the same as FM?
  • What effect would any change have on minority ownership of broadcast stations?
  • What would be the costs and financial benefits of allowing one owner to own more stations in a single market?

Obviously, the FCC is raising many issues in this proceeding, and parties have 60 days to provide the FCC with information to help guide its decision. The FCC asks for specific examples to illustrate the changes in the marketplace, and empirical data to back up assertions made in the proceeding. Expect the review of the radio ownership rules, where many broadcasters feel very strongly about the issues and the need for reform, to be a hot topic in Washington for the remainder of the year.

And watch for our summary of the other issues in the Quadrennial Review NPRM in the next few days.

As we wrote here, at the FCC’s December meeting, the FCC was scheduled to adopt an order eliminating the requirement that broadcasters post a physical copy of their licenses and other instruments of authorization at their control points or transmitter sites. In fact, the Commission adopted that order before the meeting, and it today published the order in the Federal Register, meaning that it is effective as of today. This order was adopted as part of the FCC’s Modernization of Media Regulation initiative. As a station’s licenses are now generally available online, the FCC stated that they saw no reason to require that they be posted at station locations not normally accessible to the public. So there is now one less regulatory requirement for broadcasters to worry about.

Yesterday, we wrote about upcoming deadlines for broadcasters, and noted that the FCC was going to be releasing an order providing further details on the deadlines for pleadings and other documents that were due during the government shutdown. That Public Notice was released on Tuesday, and further postponed many filing deadlines which fell during the shutdown. Filings that were due at the very beginning of the shutdown, from January 3-7, will still be due today, January 30, as noted in prior FCC releases. However, for documents due January 8 and after (in fact, through February 7), the new filing deadline will now be February 8. There is also a new deadline for updates to the online public file, including the Quarterly Issues Programs lists that were due in station’s public inspection filed by January 10, which will now be due by February 11. Quarterly Children’s Television reports to be filed at the FCC would presumably be due on the 8th, with other children’s television documents (including information about compliance with advertising limits in children’s programs), which are only placed in the public file, would have the February 11 deadline. Comments in proceedings such as the FCC’s proceeding on Class A AM stations will be covered by the new February 8 filing deadline. Responsive pleadings addressing any of the documents extended by this FCC order will also be extended to follow these new revised filing deadlines.

At the same time, the FCC announced that it would move the date of its February meeting up one week – the be held on February 14. The agenda for that February meeting is here – addressing all the issues that had been teed up for the January meeting. The January 30 meeting (now scheduled to begin at 12:30 pm ET) will end up being comprised of nothing more than announcements. For broadcasters, as we wrote yesterday, the FCC will likely abolish the need for filing the FCC Form 397 EEO mid-term report at its February 14 meeting. The FCC will also vote on a Notice of Proposed Rulemaking looking at the process for issuing new construction permits to noncommercial broadcast stations and LPFMs. Presumably, the February 14 date was to insure that the meeting would occur before the next potential shutdown, which could occur on February 15 if no budget deal is reached. So, for now, broadcasters have some more time to file documents that were delayed by this year’s first government shutdown.

Updated; 1/30/2019, 10:10 AM to note the different deadline for public file updates.

Just back from the shutdown, the FCC released an order denying the appeal of two LPFM advocacy groups who had appealed the denial of their petition seeking to block hundreds of new FM translators that will rebroadcast AM stations. We wrote about prior rejections of this petition by the Media Bureau here and here. Yesterday’s order rejected the petitioners’ application for review seeking consideration by the full Commission of the Bureau’s decisions. The petitioner had based their claim on an allegation that new translators could put undue limits on LPFM stations changing transmitter sites. But the petitioner never showed that any translator would specifically affect any LPFM station seeking to change site (and likely could not, as many new translators are in relatively rural areas where there are likely to be plenty of available spectrum for both translators and LPFM uses). As there had been no specific showing of any harm created by any of the challenged translator applications, and the petitioners had not shown that they represented any LPFM adversely affected by any translator application, the petition was again rejected for lack of standing. Given that so many AM stations are relying on these translators (and likely many have already been granted and built), this action should come as a relief to licensees who received grants of these translator applications.

With the reopening of the Federal government (at least for the moment), regulatory deadlines should begin to flow in a more normal course. All of those January dates that we wrote about here have been extended by an FCC Public Notice released yesterday until at least Wednesday, January 30 (except for the deadlines associated with the repacking of the TV band which were unaffected by the shutdown). So Quarterly Issues Programs lists should be added to the online public file by January 30, and Children’s Television Reports should be submitted by that date if they have not already been filed with the FCC. Comments on the FCC’s proceeding on the Class A AM stations are also likely due on January 30 (though the FCC promised more guidance on deadlines that were affected by the shutdown – such guidance to be released today).

February will begin with a number of normal FCC EEO deadlines. Commercial and Noncommercial Full-Power and Class A Television Stations and AM and FM Radio Stations in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, NewJersey, NewYork, and Oklahoma that are part of an Employment Unit with 5 or more full-time employees need to include in their public files by February 1 the Annual EEO Public Inspection File Reports. TV stations in New Jersey and New York in Employment Units with 5 or more full-time employees also need to file their FCC Form 397 Mid-Term EEO Reports. While the FCC appears ready to abolish that form (see our article here), it will remain in use for the rest of this year, so New Jersey and New York TV stations still need to file. Note that the FCC considers an “employment unit” to be one or more commonly controlled stations serving the same general geographic area and sharing at least one common employee.

As we wrote here, February 4 also brings the date for filing a petition to participate in the Copyright Royalty Board proceeding looking to set rates for the public performance of sound recordings by noninteractive webcasters for 2021-2025. These are the royalties paid to SoundExchange by webcasters – including broadcasters who stream their signals on the Internet and through other digital platforms (see, for instance, our article here about how these royalties include streams played by Alexa and other smart speakers).

The FCC should also have its open meeting this month, currently scheduled for February 21. Certainly, we can expect the broadcast items that the FCC had initially intended to include on its January agenda – the abolition of the Form 397 and a Notice of Proposed Rulemaking looking at the process for issuing new construction permits to noncommercial broadcast stations and LPFMs.

It is possible that we could also see the Federal Register publication of the FCC’s Notice of Proposed Rulemaking in its next Quadrennial Review of the FCC multiple ownership rules. That NPRM was adopted in December (here), and addresses issues including the potential relaxation of the local radio ownership rules. Comments will be due 60 days after publication in the Federal Register, and reply comments will be due 30 days later.

There will no doubt be other important dates both to broadcasters generally and to specific stations. Be sure to stay in touch with your legal counsel to make sure that you do not miss any dates that may be particularly relevant to your station.

The FCC last month released a Notice of Proposed Rulemaking suggesting a lessening of the interference protections afforded to Class A AM stations – what are commonly known as the “clear channel” stations. That NPRM was published in the Federal Register today setting a deadline for filing comments on the FCC’s proposals of January 22 and a deadline for reply comments of February 19. We summarized the FCC’s proposals here.

As we wrote in our initial summary of the proposal, this proceeding is likely to be controversial, as licensees of Class A stations fear that the reduction in interference could lessen these stations’ appeal to advertisers, potentially adversely impacting some of the few remaining successful AM stations. The importance of these stations to rural residents and the transmission of EAS alerts are other public interest factors cited by these licensees. On the other side are the many local AM operators who might be able to increase power, especially at night, to provide better service to their communities. No matter which side of the debate you may fall on, make your thoughts known in the upcoming comment period.

November is perhaps the month with the lightest schedule of routine FCC regulatory filing obligations – with no requirements for EEO Public File Reports, Quarterly Issues Programs or Children’s Television Reports. Nor are there other routine obligations that come up in the course of any year, though during November of 2019, broadcasters will be preparing for next year’s December 1 Biennial Ownership Report deadline. So does that mean that there are no dates of interest this month for broadcasters? As always, there are always a few dates of which you need to keep track.

The one November date applicable to all broadcasters is the requirement for the filing of ETRS Form Three, which gives a detailed analysis of the results of the nationwide EAS test conducted on October 3. Stations should have filed Form Two on the day of the test reporting whether or not the test was received. They now need to follow up with the more detailed Form Three report by November 19. See our article here for more information.

The FCC has also recently asked for public comment on its estimate of the specific costs that will be incurred by LPTV and TV translator stations and FMs that are affected by the incentive auction and the repacking of the TV band. The list will be used in determining when an item of reimbursement can be routinely paid, and when a reimbursement request exceeds the expected cost and requires further justification. See our article here for more information. Comments on the FCC’s cost estimates are due November 21.

“Long form” applications for licensees of Class A and B AM stations that filed for FM translators in the FCC’s second translator window, and which resolved situations where their applications were found to be mutually exclusive with other applicants, must be filed by November 5. These long-form applications set out the technical specifics of the translator to be constructed, as the initial translator short-form filings just provided very basic information about the proposal. See our article here for more information.

As always, there may be other proceedings out there that could affect your operations, and any station may be facing deadlines unique to that station, so always consult your own advisors for other deadlines of importance to you.

Earlier this year, there was a settlement window for mutually exclusive applications in the FCC’s application window for new FM translators for Class A and B AM stations. The FCC yesterday released a list of the applications that are now grantable as a result of conflict resolutions filed during that settlement window. These applicants must file their “long-form applications,” setting out the technical details of their proposed operations, during a filing window that will open October 4 and close November 5. The instructions for filing those applications are here. The list of applicants who are able to file is here. Also released was the same type of notice for three applications left over from the 2003 translator window, which were apparently left off earlier notices. That notice is here, and the list of applicants covered by it is here.

After the long-form application is submitted to the FCC, the application will be published in an FCC public notice of broadcast applications. Interested parties will have 15 days from that publication date to comment or object. If no comments are filed, and no other issues arise, the FCC’s Audio Division has become known for its speed in processing translator applications, so grants might be expected for many of the applications within 60 days of the end of any comment window.

The broadcast trade press was abuzz this morning with a report that an Arizona AM station currently simulcasting its programming on an FM translator has asked the FCC for permission to conduct a test where it would shut down its AM for about a year and operate solely through the FM translator. To grant this request, the FCC would need to waive its rule (Section 74.1263(b)) which prohibits an FM translator station from operating during extended periods when the primary station is not being retransmitted.

This idea of turning in an AM station to operate with a paired FM translator (though, in this case, the licensee promises to return the AM to the air within a year) is not a new one and has in fact been advanced in the AM Revitalization proceeding. The proposal offers pros and cons that the FCC will no doubt weigh in evaluating this proposal, and also raises many questions about the future of the AM band.

The immediate issue raised by the concept of trading an AM for an FM translator is what it says about the value of broadcasting on the AM dial. The once-dominant AM band has undoubtedly fallen on hard times in many parts of the country, with few AMs in major markets showing up among the ratings leaders in rated radio markets. Particularly in bigger markets, the AM band has been reduced to a few big signals that still have listeners and advertisers; some smaller specialty stations that have found profitable niches including ethnic, talk or brokered programming; and a number of struggling stations. FM translators have clearly made a difference for many of these struggling stations – not necessarily helping their AM operations but instead by giving their owners an opportunity to air their programming on the FM band where it is more likely to receive an audience.

Of course, right now, these FM translators are secondary stations, so any move to turn in an AM station to operate permanently on the translator risks having that translator knocked off the air because of an interference complaint (an issue that the FCC is currently trying to tackle in its proceeding on complaints about interference from FM translators – see our articles here and here) or because some full-power FM station increases power or a new FM station is added to the table of allotments. Some have suggested giving translators that have operated for a year or two without interference complaints some degree of protection from new or improved full-power stations (especially if the translator is associated with an AM station that agrees to surrender their AM signal), but whether the industry is ready to embrace that proposal is not yet clear. As evidenced by the mixed reaction to the proposal for C4 stations (see our articles here, here and here), some fear that the FM band is getting too crowded and that more FM signals preempt existing stations from improving their signals.

Getting rid of some of the weaker AM stations could have benefits to remaining stations, by reducing interference on the AM band, and potentially giving remaining stations some opportunities to improve their facilities. It could even lead, potentially, to more experimentation on the AM band – particularly with all-digital technologies that may improve the AM signal but will require much deeper penetration of HD AM radios before a large number would be willing to go that route for fear of not being able to be heard by their audience.

Another factor to consider is the role of changes in the FCC’s broadcast ownership rules. The NAB has proposed that AM stations no longer be counted in a multiple ownership analysis. Instead, ownership caps would apply only to FM stations (see our article here on the NAB proposal). While some have feared that this might mean that big broadcasters would abandon AM for FM operations, causing the state of technical operations and experimentation on AM to decline, others have suggested that this might free big groups or new entrants to gamble on AM by investing in a potentially unlimited number of such stations to program to niche audiences or for which to develop and deploy new technologies to make stations more viable.

Obviously, these musings run far afield from the issues facing the FCC in evaluating the proposal for the test by the Arizona station. But they are issues that need to be seriously considered by the industry as it contemplates the future of AM broadcasting. Certainly, some of these issues are likely to be discussed in the next phase of the AM Revitalization proceeding (see our articles here and here on possible issues to be considered in the future in that proceeding), and in the FCC’s upcoming Quadrennial Review of the radio ownership rules (see our post here on some of those issues). The Audio Competition report, on which comments are due next week, may also address some of these broader issues (see our articles here and here). There are no easy answers for AM, so the issues require thoughtful consideration by everyone in the radio industry.

On Friday, the FCC issued a reminder to all operators “of fixed-satellite service (FSS) earth stations in the 3.7-4.2 GHz band that were constructed and operational as of April 19, 2018 that the filing window to license or register such earth stations closes on October 17, 2018.” This frequency band is commonly referred to as the “C-Band”, and many of the “FSS earth stations” are satellite dishes that receive programming used by both radio and TV stations. The FCC is exploring allowing additional users into this spectrum, and has warned that only registered users of the spectrum will be entitled to any protections against any new users who may be authorized. In Friday’s public notice, the FCC also noted that those being protected not only need to have been operating by April 19 and registered by October 17 to be protected, but those entities will need to certify that the information in their registrations is correct on a form that will be made available at some point in the future. Users who have already registered are urged to make sure that their registrations are accurate by October 17, as certain corrections will not be allowed after that date. So broadcasters using this spectrum to receive satellite-delivered programming should heed the FCC’s advice and register by October 17.