The FCC routinely, at the request of Congress, does a study of the Video Marketplace. That study is submitted to Congress so that Congress can use it as a factual basis for any legislative issues that may come up dealing with the TV marketplace. The FCC has not previously done this sort of routine study of the audio marketplace. However, in recent legislation, Congress included a requirement that the FCC, in the last quarter of every even numbered year, provide such a report. Yesterday, the FCC released a Public Notice asking a number of questions about the marketplace, to which they seek information to be included in the report.
The questions asked include:
The FCC is looking for data from 2016 and 2017, as well as any new information that is available from this year. What will this data be used for?
While this information is being requested for a report to Congress that may be used to craft legislation, the facts gathered for this report may well have a bearing on the FCC’s consideration of the radio ownership rules. As we wrote here, it is expected that the FCC will consider possible revisions to the radio ownership rules later this year as part of its next Quadrennial Review. The NAB, as we wrote here, has already weighed in with a proposal for a significant change in the local radio ownership rules. One of the principal issues in the debate about changes to the rules will be defining the appropriate market in which competition should be assessed. If the market is a broad one, in which all competitors for advertising dollars and listening time are assessed, ownership changes may well be justified. If radio is found to still compete only with other radio stations, then ownership rules may not be dramatically changed. This study would seem to be looking at exactly the same issues that the FCC will be considering in the Quadrennial Review.
Comments on the questions raised in this study will be due 30 days after the publication of notice of this study is published in the Federal Register. Reply comments will be due 45 days after Federal Register publication.
The FCC recently released a Public Notice reminding all EAS participants that they need to file ETRS Form One by August 27, 2018. This form needs to be filed by all radio and TV stations, including LPFM and LPTV stations (unless those LPTV stations simply act as a translator for another station). While the FCC has not announced another nationwide EAS test for this year, the FCC still requires that the form be updated on a yearly basis – with a separate Form One being filed for each encoder, decoder, or combined unit used by any station or cluster.
The Public Notice provides information about where to file the form, and also links to this help page on the FCC website that provides information about completing the form. These Frequently Asked Questions are also helpful. They note the information that needs to be submitted in the ETRS form, including the geographic coordinates of the station (with latitude and longitude in NAD83), and various information about the station’s “designation”, monitoring assignments and “geographic zone” – all information that should be set out in the state EAS plan for the state in which the station is located. As it may take some time to locate all of the required information to make sure that any station’s Form One is current and accurate, stations should not delay in beginning to work on this form.
The National Association of Broadcasters radio board last week voted on a proposal to revise the FCC rules limiting the number of stations that one company can own in a radio market. This proposal was forwarded to the FCC for consideration in the next Quadrennial Review of the FCC’s ownership rules, scheduled to commence at some point later this year, in a letter delivered to the FCC’s Chief of the Media Division. The NAB suggests that one party should be able to own up to 8 FM stations in any of the Top 75 Nielsen radio markets. It proposes that there should be no FCC ownership limits in markets smaller than the Top 75, and that AMs do not need to be counted against the ownership limits. Owners who incubate the ownership of stations by new entrants into broadcasting would be allowed to own up to two additional FM stations in a market. Why would the NAB take this position?
The letter sets forth many of the same issues that we cited in our article on radio ownership here. Competition is significantly different than it was in 1996, when the current rules setting limits at 8 stations in a market (only 5 of which can be AM or FM) in the largest markets, and in the smallest markets, only two stations (one AM and one FM). As we wrote in our April article, competition for listening like Pandora, Spotify or even YouTube did not exist in 1996 (not arriving on the scene for another decade). Changes in competition for local advertising has been even more dramatic, with some sources showing that over 50% of local advertising revenue (the bread and butter of local radio) is now going to digital competitors – with Facebook, Google, and even the digital music services selling advertising to local advertisers throughout the country, even in the smaller markets.
Obviously, a proposal like this one will be controversial – and the NAB notes that its Board’s decision was not unanimous. Proponents of more diversity in broadcast ownership will suggest that consolidation will hinder opportunities. Additionally, opponents will likely contend that consolidation since 1996 has not benefitted the economics of radio companies, but instead led to some being financially overextended.
Parties will have plenty of time to comment on these issues and the various suggestions as to how the rules should be changed. While some radio trade publications have been suggesting that a Notice of Proposed Rulemaking in the Quadrennial Review was imminent, in fact we are hearing that the Notice may not be out until significantly later in the year. That NPRM will set out tentative findings of the FCC and proposals for reform of the rules. The public will likely have at least 60 days to comment on any proposals, and then there will be a period for replies. After that, the Commission will take the issues under consideration, and no doubt interested parties will meet with the decision makers to argue their positions, with no decision likely until at least late in 2019.
So any changes to ownership rules for a new radio industry will take some time to implement –if any of them are implemented at all. Watch as these issues are argued over the course of the next year.
On Friday, the Audio Division of the FCC’s Media Bureau released a letter decisionrejecting an objection filed by three groups advocating on behalf of LPFM stations against almost 1000 FM translator applications – most of which were filed to provide FM translators for AM stations in the most recent window for the filing of such applications. We wrote about the grounds for the objections here, which included claims that Section 5 of the Local Community Radio Act, an act setting some ground rules for the relationship between LPFM stations and translators, mandated that the FCC evaluate each of these applications for its individual impact on LPFM opportunities in the future. Once the objection was rejected, the FCC resumed processing of pending applications.
The letter decision found numerous issues with the objection. It noted that 55 of the applications had already been granted when the objection was filed, and 35 had been dismissed, thus the objection came too late. Additionally, a number of the applications to which the objection was directed were mere minor changes in existing translators. The Audio Division noted that the Section 5 of the LCRA, which says that translators and LPFMs are equal in status and that the FCC needed to provide opportunities for each of those classes of stations, did not apply to evaluations of modifications of existing translators, but instead only to applications for new translators.
As to the objections to the remaining applications for new translators, the FCC found that the objections did not even purport to give any details as to how the vast majority of the translator applications had any impact on any specific LPFM opportunities. Moreover, the decision noted, that nothing in the statute required that the FCC, every time it processed applications for either LPFMs or translators, to assure that there was room for stations of the other service. The services are processed under different standards and at different times. The FCC just recently had a filing window reserved for LPFM applicants – where it granted applications for about 2000 of those stations, so plenty of opportunity had been provided for LPFM stations. Nothing in the LCRA mandates that each translator application be evaluated for impact on LPFM opportunities. While the FCC did not explicitly say it, if the objection’s contention that treating LPFM and translators equally and providing opportunities for each required that each translator application be evaluated for its preclusive impact on LPFM, that same evaluation would seemingly have to be in connection with each LPFM application, assessing its impact on translator availability – in which case in some locations nothing would ever get granted as the grant of an application for one could preclude opportunities for the other.
So the objection has been resolved, and given the informal nature of the objection, appeal rights are somewhat limited. It appears that now the translator application processing will continue. So look for further action on pending applications soon.
The FCC today published in the Federal Register a summary of its proposed rules for resolving complaints of interference to existing full-power stations or other existing FM services from new or relocated FM translators. We summarized the FCC’s proposals in its Notice of Proposed Rulemaking here and here. The publication in the Federal Register triggers the 30 day comment period. Comments are due by July 6 with reply comments due by August 6. There are certain to be many broadcasters expressing their views on the FCC’s proposals in this proceeding. Expect final FCC action late this year or sometime in 2019.
In 10 days, we’ll mark the 12th anniversary of my first post welcoming readers to this Blog. I’d like to thank all of you who read the blog, and the many of you who have had nice words to say about its contents over the years. In the dozen years that the blog has been active, our audience has grown dramatically. In fact, I’m amazed by all the different groups of readers – broadcasters and employees of digital media companies, attorneys and members of the financial community, journalists, regulators and many students and educators. Because of all the encouragement that I have received from readers, I keep going, hopefully providing you all with some valuable information along the way.
I want to thank those who have supported me in being able to bring this blog to you. My old firm, Davis Wright Tremaine LLP helped me get this started (and graciously allowed me to take the blog with me when I moved to my current firm six years ago). My current firm, Wilkinson Barker Knauer LLP, has also been very supportive, and I particularly want to thank several attorneys at the firm (especially David O’Connor and Kelly Donohue) who help catch, on short notice, my typos and slips in analysis for articles that I usually get around to finishing shortly before my publication deadline. Also, a number of other attorneys at the firm including Mitch Stabbe, Aaron Burstein, Bob Kirk and Josh Bercu have contributed articles, and I hope that they will continue with their valuable contributions in the future. Thanks, also, to my friendly competitors at the other law firms that have taken up publishing blogs on communications and media legal issues since I launched mine – you all do a great job with your own take on the issues, and you inspire me to try to keep up with you all.
I’ve posted over 2000 articles in the last 12 years. That works out to almost an article once every other day. But there never seems to be any shortage of topics to write about. In fact, what is in short supply is time – as clients and life need to come first, and blogging gets worked into the schedule when it fits. But writing this blog has become an important part of my legal practice. It has, I think, helped make me a better lawyer, as it has given me an incentive to keep up to date on developments in the law and in business that affect broadcasters and other media companies. The articles, and the opportunities that the articles have opened for speaking and otherwise contributing to industry discussions, have introduced me to many people in the industry who are there pushing these developments. Interacting with those actually in the business trenches provide even more to write about.
When we first started the blog, I don’t think that I was sure how it would turn out. But, among the many goals that I set in my first post, was the following:
So some days, the blog may just report on FCC actions. Other days, we may link to interesting or provocative news stories that we see in the trade or popular press. But sometimes, we will tackle more fundamental issues. For instance, one of the first questions we’ll have to address is just what the broadcast industry is today. While we could limit the stories in this blog to just matters about the over-the-air broadcast industry, that narrow view would be far too limiting. Broadcasting is no longer an island unto itself. Instead, each day it becomes more and more clear that the world that traditional broadcasting inhabits is one that goes far beyond those narrow areas that the FCC has traditionally defined as a broadcast service. Thus, we will be pointing out developments and legal decisions that impact not only traditional over-the-air radio and television stations, but also those in the myriad “new media” that are now so crucial to any understanding of the broadcast industry. Media “convergence,” which has for so long been nothing more than a buzz word thrown around to make it seem like we’re thinking about the future, is finally here, and cannot be ignored in a discussion of the broadcast industry.
Looking back, that may have been an ambitious goal, but it is one that we continue to try to achieve. In fact, in the last couple of months, we published articles on the Music Modernization Act, legal issues for broadcasters in digital and social media advertising, a Supreme Court decision that may provide broadcasters with new revenue from advertising for sports betting, efforts to regulate online political advertising, and potential reform of the radio ownership rules based on the plethora of new media outlets for audio entertainment. It is clear that the initial vision of a broadcasting industry that has expanded far beyond its traditional over-the-air bounds was not just the first question that we would address, but it is one that we address every week.
And there still is an inexhaustible supply of issues that we need to follow. Of course, the current FCC is very active reforming the regulatory landscape for broadcasters, which will no doubt prompt many articles. Copyright issues are also more important than ever – look for articles in the near future on what’s next for the Music Modernization Act and on how Alexa, Google Home and other voice-activated legal assistants raise royalty considerations for program providers. Expect more coverage of changes in the broadcast ownership rules, and in many areas affecting the advertising landscape, including legal issues raised by programmatic buying (about which we have written before – see for instance here and here).
Thanks again to all our readers. Keep reading, tell your friends about the blog, let me know if I can ever help you (I am, of course, a lawyer whose clients provide the resources to track all of these issues), and we’ll see what happens as we celebrate future anniversaries of the Broadcast Law Blog.
For radio and television stations with 5 or more full-time employees located in Arizona, Idaho, Maryland, Michigan, Nevada, NewMexico, Ohio, Utah, Virginia, WestVirginia, Wyoming, and the District of Columbia, June 1 brings the requirement that you upload to your online inspection file your Annual EEO Public Inspection File Report detailing your employment outreach efforts for job openings filled in the last year, as well as the supplemental efforts you have made to educate the community about broadcast employment or the training efforts undertaken to advance your employees skills. For TV stations that are part of Employment Units with five or more full-time employees and located in Arizona, Idaho, Nevada, New Mexico, Utah, and Wyoming, you also need to submit your EEO Form 397 Mid-Term Report. See our article here on the Mid-Term Report, and another here on an FCC proposal that could lead to the elimination of the filing of the form.
June 1 should also serve as a reminder to radio stations in Maryland, Virginia, West Virginia and the District of Columbia that your license renewal will be filed a year from now, on or before June 1, 2019. So, if you have not done so already, you should be reviewing your online public inspection file to make sure that it is complete, and otherwise review your station operations in anticipation of that filing. We wrote about some of the issues of concern for the upcoming license renewal cycle in our article here. TV stations in those same states will start the TV renewal cycle two years from now.This month also brings to the end a number of filing windows. LPTV and TV translator stations displaced by the incentive auction have until June 1 to complete and file displacement applications, specifying a new channel for their post-repacking operations. See our articles here and here. AM stations that filed for a FM translator in the most recent window who ended up mutually exclusive with other applicants have until June 14 to file amendments to their applications to resolve the mutual exclusivity or otherwise reach a settlement, or they will end up in an auction at some point in the future. For more information, see this article. Such an auction will be held for translator applicants from the 2003 translator window that were not able to resolve their mutual exclusivity in a long-ago translator window – that auction to be held starting June 21. See this article.
June will also bring a hearing at the Federal Election Commission on the required sponsorship identification for online political ads. See our article here for more information on this FEC hearing and other activity to regulate online political advertising.
And broadcast stations using C Band earth stations to receive programming or for other uses should consider registering these dishes with the FCC, as the FCC is considering repurposing the band for other uses or allowing other wireless uses in the band used by these dishes. The FCC needs to know what users need protection or other accommodation in that band. While there is no requirement that receive-only dishes be registered, no protection will be afforded to those that do not register by July 18. See the FCC public notice on that issue here.
As always, there are plenty of other legal and regulatory issues that may affect broadcast stations – including political lowest unit rate windows in many states in anticipation of primary elections. So stay alert for those dates, watch alerts from broadcast associations, and consult your attorney to make sure that you stay on top of all of your regulatory obligations.
Earlier this week, the full FCC issued a decision denying a Petition for Reconsideration of the FCC’s 2017 decision to relax the rules on the permissible locations of FM translators for AM stations, allowing them to locate anywhere within the greater of the AM station’s 2 mv/m contour or a circle with a 25 mile radius from the AM station’s transmitter site. The rule had previously required that translators be located within the lesser of those two limiting factors. See our summary of that decision here. As we wrote here and here, Prometheus Radio Project, an LPFM advocacy group, had petitioned for reconsideration of that rule change and asked for a stay of its effect, arguing that the change would impact the area in which LPFM stations could locate their stations if a need to change transmitter sites arose. Prometheus also raised procedural objections about the way in which the order was adopted. In this week’s decision, the FCC rejected the Petition for Reconsideration, finding that it was properly adopted, and that Prometheus had not demonstrated that the change in the area in which translators could be located would have a significant impact on LPFM site availability. The Commission came to the same conclusion that we did in our articles on the Prometheus petition, that the change in the area to locate did not necessarily have an impact on LPFM site availability – as translators could just as well move further from LPFM sites as they could move closer.
This decision was one that addressed pleadings filed back in 2017. Several broadcast trade press articles suggested that this decision was one resolving an Informal Objection filed last week by Prometheus and other LPFM advocacy groups against almost a thousand pending translator applications – both applications filed in the latest FM translator window for AM stations and other minor change applications filed by existing translator operators. While that Informal Objection raised many of the same arguments that had been raised in the 2017 Petition for Reconsideration (and in fact cited to the pendency of that Petition as one of the reasons to deny the pending translator applications), it is a different pleading that has not yet been resolved by the FCC. As the issues are similar, one would expect a similar result – but broadcasters who received the Informal Objection should not start celebrating yet. This week’s decision was certainly good news – but it has not resolved all the issues raised by the LPFM advocates.
At yesterday’s FCC open meeting, the Commission commenced two proceedings of interest to broadcasters. The first deals with the processing of complaints of interference caused by new FM translators. The second proposes to eliminate the need for the posting of station licenses and other FCC authorizations at the control points of broadcast stations. Comments dates in each proceeding will be computed from the publication of these orders in the Federal Register, which will occur at some point in the future.
In each case, the FCC essentially adopted without significant revision the draft notices that were released several weeks ago. The Notice of Proposed Rulemaking (available here) on translator interference standards sets out proposals for the minimum number of listeners who would have to complain before an interference complaint would be processed, and suggests limiting complaints of interference to those that arise within the 54 dbu contour of the primary station complaining about the interference. We wrote in more detail about the FCC’s proposals in our summary of the draft notice, here.
The Notice of Proposed Rulemaking on eliminating the posting of FCC authorizations (available here) suggests that posting the FCC authorizations at a station’s control point serves no real public interest purpose, as members of the public are unlikely to have access to that location, and as all the information in those authorizations are available on the FCC’s website. The FCC also proposed to eliminate the requirement that FM translators post information about the licensee of the translator at the transmitter site for the station. Our article about this proposal when the draft was released of this action being taken as part of the FCC’s Modernization of Media Regulation Initiative is available here.
Comments on each proposal will be due 30 days after that proposal is published in the Federal Register. Reply comments on the translator interference proposals will be due 60 days after Federal Register publication. Only 15 days will be provided for reply comments on the posting of licenses – making those comments due 45 days after Federal Register publication.
Starting June 1, 2019, just over a year from now, the next broadcast license renewal cycle will begin. By that date, radio stations in DC, Maryland, Virginia and West Virginia must file their renewal applications. Every other month for the next 3 years will bring the filing of radio license renewals in another set of states. And television stations will begin their renewal cycle a year later (June 1, 2020). The FCC’s schedule for radio license renewals can be found here and here. For TV stations, the schedule of renewal filings by state is in the same – just one year later than for radio. Every eight years, broadcast stations have to seek the renewal of their licenses by the FCC by demonstrating their continuing qualifications to be a licensee, including showing that they have not had a history of FCC violations and that they have otherwise served the public interest.
We have already written several times about how, with all broadcasters – both radio and TV – now required to have an online public file, it is important for stations to make sure that those files are complete and are kept up to date on a regular basis (see our articles here, here and here). Given that the contents of the online public file can be viewed by anyone, anywhere, just by launching an Internet browser, we would expect more complaints about incomplete files, and more scrutiny by the FCC of the contents of files that rarely were subject to FCC review in the past. FCC staffers can review public file compliance from their offices or homes, and do not have to rely on the rare field inspection to discover a violation. Thus, stations should be reviewing the contents of their files now to be sure that they are ready for the scrutiny that they will receive in the upcoming renewal cycle. But that is not the only issue about which stations need to be concerned, as illustrated by a decision released by the FCC yesterday, deciding to hold an evidentiary hearing as to whether the license renewal of a broadcast station that had been silent much of the last license renewal term should be granted.
In the Hearing Designation Order released yesterday, the FCC went through the history of a Wyoming radio station that had operated for only days during its last license term, and since then had each year operated for only a few days each year to avoid forfeiting its license under Section 312(g) of the Communications Act (which says that the license of a station that is off the air for more than a year is forfeited unless the FCC finds that the public interest calls for an exception – see our articles here and here). Only since last August, well past the end of the license renewal term under review, did the station come back on the air on a full-time basis. The FCC asks the station’s licensee to produce all records of how it served the public interest during the renewal term (including all logs and records of EAS tests) and otherwise provide evidence as to why its renewal should be granted.
We wrote here about the FCC launching a similar hearing proceeding for another station last year, and about a number of other cases where the FCC has imposed short-term renewals or other penalties on stations that had a history of long periods of silence during the license term (see our articles here and here). While the FCC’s dividing line between stations that get a short-term renewal and those that get designated for hearing and possible loss of license is not entirely clear, yesterday’s decision reinforces the warning to broadcasters who currently have silent stations that they need to get those stations operational as soon as possible so as to be able to demonstrate a record of public service during the current license term so as to justify a renewal when their applications are filed during this upcoming renewal cycle.
The renewal cycle starts next year. The time for getting into compliance is now, as last minute fixes may not solve all problems – and that last minute may already be upon or be imminent for many stations.