May is one of those months where there are neither deadlines for EEO Public File Reports nor for any of the quarterly filings of issues/programs lists and children’s television reports. But the lack of these routine filing deadlines does not mean that there are no dates of interest in the coming month to broadcasters and other media companies. As seemingly is the case every month, there are never times when Washington is ignoring legal issues potentially affecting the industry.
May 10 brings an FCC meeting where two items of interest to broadcasters will be considered. One is a proposal to abolish the requirement for posting licenses and other operating authorizations at a broadcaster’s control point and to eliminate the requirement that FM translators post information about the station’s licensee and a contact phone number at their transmitter sites (see our post here for more details). The second is a proposal to modify the processing of complaints about new or modified FM translators causing interference to existing stations. See our summary of that proposal here. If adopted at the May 10 meeting, these proposals will be available for public comment after they are published in the Federal Register.
The process that will lead to the issuance of construction permits to some of those new FM translators is still underway, as the window runs from May 24 through June 14 for filing settlements or engineering resolutions for mutually exclusive applications filed in the second window for AM stations to obtain authorizations for new FM translators (see our article here). Translator applications that cannot resolve their mutual exclusivity during this window will end up in an auction. Applications that were not mutually exclusive with any other application filed in this second window have until May 9 to file their “long-form” applications detailing the technical facilities that they plan to build out once their construction permit is granted (see our article here).
TV translators and Low Power TV stations also are in the middle of their own window for submitting displacement applications by those stations that either operate on TV channels above Channel 37 (which will no longer be part of the TV band after the repacking following last year’s incentive auction) or on channels subject to new interference from full-power and Class A TV stations that were repacked onto new channels. That window is now open, and TV translators and LPTV stations have until June 1 to find new channels and submit applications for those channels to the FCC. See our articles here, here, and here for more information.
Comments in another FCC rulemaking, the one looking to do away with the requirement for the filing with the FCC of the Form 397 EEO Mid-Term Report are due today, April 30, with replies due on May 15. The FCC suggested that this is no longer necessary, as all the information required by the Commission is already in station’s online public file. See our article here summarizing that proposal.
In May, there will also be activity at other government agencies that broadcasters and other media companies should be watching. On Friday, we summarized the Music Modernization Act passed by the House of Representatives last week. That bill is supposed to get a hearing in the Senate on or about May 16 looking toward the possible passage of that legislation by the Senate.
The Federal Election Commission, in a rulemaking that it is conducting, is looking at requiring sponsorship identification on online audio and video political ads in the same format as those found on radio and TV ads (including the “I’m John Smith and I approved this message”). Comments on proposals made in that rulemaking are due May 26. We’ll have more on that proceeding later this week. Speaking of political broadcasting, stations in many states will soon be in lowest unit rate windows, if they are not already, for primary elections occurring this summer (see our article here on your LUC obligations). Watch for those windows as they come up in your state, and remember all of the political obligations that arise not only during the window, but as soon as you have legally qualified candidates (see our article here). For more information on the FCC’s rules on political broadcasting, you can check out our Political Broadcasting Guide here.
For a month without any of the “standard” FCC obligations, there are still lots of issues for broadcasters to consider. Make sure you pay attention to any of these issues that may affect you, and to any that are unique to your own station.
The FCC yesterday issued an order granting 39 radio stations (almost all stations with very small staffs or those affected by recent hurricanes or otherwise non-operational) 60 days to comply with the requirement that all full-power radio stations complete the transition to the online public file by this past March 1. We wrote about this obligation for the March 1 transition to the online public file here and here. This decision highlights the requirement for stations to have complied with the requirement to transition to the online file by March 1.
We are still hearing reports that there are stations not on this waiver list that have not activated the public file. In a footnote in yesterday decision, the FCC notes that it orally denied an extension request filed a year ago, and that its staff had discussed concerns that other stations about meeting the deadline, noting that the FCC has “encouraged all of these stations to continue to work to complete the transition to the online file as expeditiously as possible.” Whether that suggests that the Commission might not strictly enforce the March 1 deadline is open to interpretation, but it is clear that, even if it has not reached that point already, at some point (likely soon) any station not in compliance with the requirements is looking at potential FCC penalties. Note that the license renewal cycle for radio stations begins next year. That 3-year cycle in which all radio licensees will file their renewal applications will present the FCC with the opportunity to monitor compliance with the public file rules, and to impose penalties on those who have not complied. So don’t get caught being noncompliant!
We wrote last week about one broadcast issue to be considered at the FCC’s May 10 meeting, amending the procedures for resolving complaints about interference by new FM translators to other existing FM stations. At that same meeting, the FCC is planning to adopt another item in its Modernization of Media Regulation Initiative – a Notice of Proposed Rulemaking (see a draft of that item here) to eliminate the FCC rules that require broadcast stations to post physical copies of their license (and other instruments of authorization such as STAs or renewals), or to keep physical copies of these documents in a binder, at their control point.
The FCC also asks whether translator operators should continue to have to post information at their transmitter sites as to the name, address and telephone number of the licensee and where station records are maintained. Given that all of this information is in the FCC’s database and accessible to anyone with Internet access (and as the licenses posted at the control point are not even accessible to the public), the draft NPRM, if adopted at the May 10 meeting, would propose to eliminate these rules. Watch for the adoption of this proposal at the May 10 meeting, and the comments dates on the proposal that will be set after the meeting.
The FCC yesterday released a draft Notice of Proposed Rulemaking, to be considered at its open meeting on May 10, seeking to add more specificity to its rules for the resolution of interference by new FM translators. The FCC attempts to set out new procedures that it would use to decide if applications for new translators can be granted, and if new translators already granted and constructed can continue to operate, when there are complaints that the new translator will cause interference to existing FM stations and to pre-existing translators and LPFMs. Under current rules, the FCC will deny the application of a new translator if there are regular listeners of another station within the 1 mv/m of the proposed new translator, and a newly constructed translator will be required to cease operations if it cannot resolve complaints of interference to the regularly used signal of any other operating station – even outside of that station’s protected contour. Even a single listener complaint of interference that cannot be resolved from a listener who is not affiliated with the station can cause the FCC to order that a new translator be shut down.
In response to petitions filed by the NAB and a Philadelphia-area translator operator (see our summary of those filings here), the FCC has drafted this NPRM that, if adopted at its May 10 meeting, will put forward for public comment a series of proposals to make the interference complaint resolution process quicker and more objective. There is a general perception, both among full-power broadcasters who have complaints about translator interference, and among translator operators whose operations may be in limbo if subjected to interference complaints, that the current FCC process simply takes too long and is subject to manipulation and unforeseeable outcomes. With over 1500 new translators for AM stations likely to start operations shortly, with many potentially subject to interference complaints, many broadcasters have suggested that the FCC needs to act quickly to make the current system more objective – and to allow it to resolve complaints more quickly.
The FCC has proposed to revise its policies in several ways. First, it suggests that, if a new translator is subject to interference complaints, it can seek to move to any available FM channel to resolve the interference – not just to the three adjacent channels and those channels on which IF interference would be caused. The current rules restricting the choice of new channels provides a very limited selection of alternative channels that could be used to resolve interference complaints. Allowing such moves would be consistent with the practice for LPFM stations and TV translators for resolving similar interference issues and with informal FCC policy when an existing translator suffers interference from a new FM station. Thus, the FCC will seek comment as to whether this is a good idea.
Perhaps more controversial is a proposal to require that there be at least 6 complaints from listeners unaffiliated with any complaining station (e.g. not employees, owners, or contractors of the complaining station or their family members) before a complaint will be processed. The idea is to make sure that there is a real widespread interference issue – so that a unique listener with some unusual affinity for a distant station can’t block the service from a new translator. But the FCC asks if 6 complaints is the right number, or if that number should vary depending on market size or population covered. Questions about affiliation of listeners with the station are also addressed, as are details of the information that complaining listeners need to supply for their complaint to be considered. The FCC tentatively finds that a listener will need to state that they have listened to the complaining station at least twice in the month before the complaint to be considered a regular listener. The FCC also tentatively finds that stations can reach out to its listeners to see if they are getting complaints from new translators – it does not need to sit back and wait for complaints to roll in.
The FCC also is ready to propose that, instead of interference being determined subjectively by the ears of a listener, interference would be measured by objective criteria. Interference that occurs outside a station’s 54 dbu contour would not be protected at all. Other complaints would be resolved through the application of formulas that the FCC uses in other contexts to determine interference based on the ratio between “desired” and “undesired” signals (the desired signal being the station that the listener wants to hear and the undesired one being the translator) based on standard coverage prediction methodology, with perhaps “on/off” tests (where the translator is periodically shut off to see the signal level it produces at a given location) to assess real-world interference. The FCC asks if such objective criteria accomplish its goals of protecting full-power stations and determining where real interference is created.
There is significantly more detail with many more questions asked in the draft NPRM. It should be required reading for both translator operators and licensees of full-power stations, as it raises many issues that this proceeding will attempt to resolve in the near term. Watch to see if this proposal is adopted at the May meeting, and when comments are due after its publication in the Federal Register.
At this week’s NAB Convention, issues about FM translators and pirate radio dominated the radio news from the sessions that featured FCC speakers. On the translator front, FCC Chairman Pai, in his speech to the convention, announced that there is a Notice of Proposed Rulemaking that has been drafted and is being considered by the FCC Commissioners, looking to make changes in how complaints about interference to full-power stations from translators would be handled. Currently, a single complaint from a regular listener to a full-power FM station, even if that listener listens outside of the full-power station’s protected contour, is enough to shut down the new translator if the translator licensee cannot resolve that complaint. This policy has prompted a number of battles between translators and full-power stations over whether complaints have come from bona fide listeners (as opposed to employees or others with close connection to the complaining station) who are receiving real interference, and whether or not that interference truly exists (e.g., whether it has been caused by the new translator) and whether or not such interference has been remediated by actions taken by the translator licensee. Last year, the NAB proposed a number of fixes to the policy – suggesting that more than one complaint should be required to prove true interference and that, if interference is found, that the translator be allowed to relocate to any available channel on the FM band to remediate that interference, not just to adjacent channels as a “minor change” as currently required (see our summary of the NAB proposal here). It is anticipated that the FCC’s proposed rulemaking will contain some of the NAB’s suggestions.
Pirate radio was also on the Chairman’s agenda, and was discussed in a panel of other FCC officials at the convention. The Chairman highlighted the recent seizure of a pirate radio operator’s equipment in the Boston area, mentioning that two other such actions had also been taken. The discussion in other panels highlighted the FCC’s willingness to pursue not only pirate operators themselves, but also their landlords where the landlord appeared to be actively involved with the pirate’s operation (see our article here). The FCC is also looking for legislative assistance to broaden that authority to undertake enforcement actions against those who make possible pirate radio operations through providing space, services, or other assistance (see our article here). Watch for further actions on both issues in the near future.
With the NAB Convention upon us, and much of the talk being centered on television issues including the repacking of the TV band after the incentive auction, the conversion to the next-generation of TV transmission as allowed by the new ATSC 3.0 transmission standard, and the effects of the FCC’s changes in the local television ownership rules and the reinstatement of the UHF discount in connection with the national ownership cap, it almost seems like radio is an afterthought. The FCC is considering some matters of interest to radio, including how to revitalize the AM band, and it has taken steps to revitalize individual AM stations through the use of FM translators. And the FCC is apparently considering changes in FM through the creation of a new class of C4 stations (see our post here). Yet, in recent ownership orders from the FCC, while TV ownership rules have been dramatically relaxed in the face of new video competition so that local TV owners can more robustly address their challengers, there were no corresponding changes in the radio rules. In the last ownership proceeding (which we summarized here), other than making changes to the embedded market rules (potentially affecting only radio stations in the suburbs of New York and Washington), and allowing ownership joint ownership of radio with TV and newspapers through the abolition of the cross-ownership rules that had limited or prohibited those combinations, radio ownership rules themselves have not been subject to any real changes in ownership limits since those limits were set in the wake of the 1996 Telecommunications Act. The FCC did make some changes early in this century when it adopted Arbitron (now Nielsen Audio) markets as the way in which competition in rated markets is defined, but the numbers of stations that one party can own has not changed since those numbers were established in the 1996 Act – even though Congress gave the FCC the authority to review and revise the rules to insure that they remained in the public interest.
While there have been no changes in the ownership rules for radio, think about the changes that have taken place in the competitive environment since 1996. At that point, streaming was something only a few technologically-forward people even knew existed. Pandora did not launch its streaming service for another decade, and Spotify was even further behind – not launching in the US until 2011. Even those few people who knew that audio streaming existed in 1996 would never have thought that they could listen to a streaming service in their cars. Apple was not offering a streaming music service – in fact it had not even introduced the iPod (introduced in 2001) or the iTunes store (2003) – both now about to become technological relics themselves because of technological changes. Given that there was no iPod, there were obviously no podcasts to bring audio storytelling to the millions who now listen to their favorite programming through the multitude of services that provide podcasts on almost any subject. There was no Alexa to bring Amazon and other music services into the home – in fact Amazon itself had only begun selling books online in 1995. Even Sirius XM (then Sirius and XM as two competing companies) had not initiated their services at the time of the 1996 Act – as XM did not start providing service to consumers for another 5 years (with Sirius launching a year later). And the pace of change for audio technology is not slowing.
Obviously, streaming to cars – radio’s most important listening venue – is already a reality. Between streaming and satellite radio, an unlimited number of audio channels is available to most Americans. Even drivers in rural areas with little or no mobile coverage providing sufficient bandwidth to deliver streaming services can receive Sirius XM service, and podcasts and cached content from certain subscription streaming services provide additional audio options in the car. And, over time, with driverless cars on the horizon, video may too become a competitor to radio in the car.
Radio reception in the home, too, is changing. Alexa, Google Home, and Apple HomePod provide direct voice-activated access to audio content that does not include traditionally-delivered over-the-air radio. Here, too, the number of channels of programming available from these services is effectively unlimited. These digital giants providing new audio competition – including Facebook, Amazon, Google and Apple – all have market capitalizations at or well above 500 billion dollars, dwarfing the total capitalization of the radio industry of less than 10 billion dollars.
The competition for radio revenue has also dramatically changed since 1996. In 1996, local advertising competitors were the local newspaper, some TV ads, and direct mail. Local cable TV ad insertion networks were in their infancy. And digital advertising competition really did not exist. Facebook did not launch to the general public until 2006 (being available to college students two years before), and Google wasn’t launched until 1998. Analysts say that digital services now take over half of the local advertising in most radio markets.
The fact that over-the-air radio continues to command a significant audience share is no doubt attributable to the quality and relevance of the content that it provides to local listeners, its ease of access, the lack of subscription fees and habit. But with all the competition now in the radio marketplace, rules that were written when the only competitive mobile audio content was from the cassette player would seem ripe for review. So are there regulatory changes on the horizon?
FCC Chairman Pai has promised to initiate the next Quadrennial Review of the FCC’s ownership rules at some point this year. In the 1996 Act, Congress charged the FCC with reviewing the ownership rules, including the radio ownership rules, on a regular basis to see if they were still in the public interest. Initially, that review was to be done every other year, but as these reviews tend to take significant time to complete, the law now requires a Quadrennial Review. Radio will no doubt be part of this upcoming review.
The real question will be what changes in the ownership rules the FCC is prepared to make to address the seismic shift that has occurred in the audio marketplace. Will the FCC recognize that radio is no longer an island unto itself? Will they recognize that radio no longer is a separate market where radio stations only compete with other radio stations? That is a real question, as sometimes the government is slow to recognize the transformation of the marketplace. For instance, in its consideration of the Entercom-CBS merger, the Department of Justice looked only at the radio marketplace in determining which stations Entercom would have to divest to complete the merger – not considering all of these other sources of audio competition in making its judgement.
One would think that an expert agency like the FCC, which will assemble input on the current state of competition from the entire spectrum of the media industry in connection with the upcoming Quadrennial Review, will be able to assess the true state of competition in today’s marketplace. But what would change look like?
In the past, some radio companies have suggested a lifting of the “subcaps” in the radio ownership rules that limit the number of AM or FM stations that can be owned in a single market (see our article here). Right now, in the largest markets, one party can own up to 8 stations, but no more than 5 can be in one service – AM or FM. Some fear that lifting the subcaps will mean that the big players will all migrate to FM, further damaging the already-ailing AM band. The FCC will need to address whether this artificial support for the AM band is still in the public interest – and consider whether, even if the big radio owners move to FM, that won’t create more opportunities for niche programmers on the AM dial.
A more far-reaching question is whether the lifting of the subcaps goes far enough to allowing radio owners to develop the synergies to compete with the plethora of new audio competitors. Some suggest that radio owners need to be able have a marketplace presence that is even deeper than 8 stations to compete in the radio marketplace itself, much less in the greater marketplace for audio entertainment and local advertising. For instance, in a market like New York City, BIA Kelsey (the broadcast analysis service on which the FCC relies to determine which stations compete in each market) says that there are 154 radio competitors serving all or part of the market. In Los Angeles, they say that there are 93 stations that compete in the market. Are 8 stations enough to really compete in the media marketplace in those markets?
Others worry that more concentration will shut out potential new owners, and believe that new technologies still don’t provide an equivalent means to reach the radio audience. Fearing that new entrants, diverse owners, and niche programmers will be priced out of radio ownership if more consolidation is allowed, some are likely to oppose any change in the radio ownership rules.
Small market radio provides its own challenges. In markets not rated by Nielsen, the FCC looks at the overlap of radio station’s service contours to determine which stations compete, and how many radio stations are in any market. In the smallest markets, a broadcaster can own up to 5 stations, no more than 3 or which can be in any service, and in no case can the broadcaster own more than half the stations in a market. Some small market broadcasters suggest that these limits often leave one or two weak stations in a market – stations that provide little local service. Just as many markets have a single newspaper (if they even have one); some argue that some smaller markets simply cannot support multiple commercial radio operators. Should the more successful stations in the market be allowed to own some of these orphan stations, or would further consolidation in the small markets foreclose service from some operator who might come up with a unique idea that could revive an otherwise failing station?
These will all likely be considerations for the FCC in the next Quadrennial Review. Radio broadcasters who have thoughts on these issues should start to convey those thoughts to the FCC now, so that the Commission can craft the appropriate questions to be asked in the Notice of Proposed Rulemaking that it will issue to start that proceeding at some point, likely later this year.
The FCC yesterday issued a Public Notice announcing a window for mutually exclusive applicants filed in the second translator window to attempt to resolve the interference conflicts that the FCC found to exist between certain applications. The conflicting applications are listed on the Excel spreadsheet found here. These are translator applications filed in the second translator window in late 2017 which was opened primarily so that Class A and B AM stations could seek authority to rebroadcast their signals on new FM translators that would be tied to those AM stations. While mutually exclusive parties can start discussions now about resolving the conflicts between their applications, engineering amendments resolving the problems or other settlement agreements can only be filed in a window open between May 24 and June 14.
As we wrote here, applications filed in this second translator window that are not mutually exclusive have already been told to file their “long-form” applications detailing their technical proposals by May 9. The FCC has also recently scheduled auctions for mutually exclusive applicants in the first 2017 translator window who were not able to resolve their mutual exclusivity in the settlement period opened in connection with those applications (see our article here). An auction of mutually exclusive applications left over from the 2003 translator window has also been scheduled (see our post here). So, all in all, the FCC is moving rapidly to authorize many new FM translators in the coming months.
April brings with it a milestone – as it is the end of the first quarter since all radio stations have had to have their online public inspection file “live” so that anyone, anywhere, can view a station’s compliance with rules that previously could only be judged by going to the station and reviewing the paper public file. April 10, in particular, is important, as it is when Quarterly Issues Programs Lists, summarizing the most important issues facing the community which the broadcaster serves and the programs that the broadcaster aired to address those issues, must be in the online public file for all full-power radio and TV stations. We wrote about the importance of these sometimes overlooked documents here, as these are the only FCC-mandated documents that reflect how a station has served the needs and interests of its community. We have also noted that, in the past license renewal cycle, missing Quarterly Issues Programs lists were the source of the most fines issued to broadcasters. Now that compliance can be judged at any time by the FCC, their importance is only magnified. So be sure that you get these documents into your online public file by April 10.
EEO Public Inspection File Reports, summarizing a station’s employment record for the prior year, are also to be uploaded to a station’s online public file. For radio and TV stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, these reports need to be completed and included in the public file by April 1 by all stations that are part of employment units with 5 or more full-time (30 hours per week) employees. In addition, radio stations in employment units with 11 or more full-time employees in Delaware and Pennsylvania, and TV stations in Texas with 5 or more full-time employees, also need to file EEO Mid-Term Reports, commonly referred to as FCC Form 397 applications. While the FCC is considering the abolition of the Mid-Term Report (see our article here), the obligation is still in place so, for now, stations must comply.
TV stations also must file with the FCC, by April 10, their Children’s Television Reports, detailing the amount of educational and informational programming that they have broadcast on each of their subchannels. Here, again, there are proposals at the FCC for reform of this requirement (see our post here), but as no action has yet been taken, this report must still be filed. In addition, TV stations must include in their public file documentation showing that they complied with the advertising limits in children’s television programming.
April also brings various filing deadlines for various groups of stations. TV stations changing channels as a result of the incentive auction must file a Transition Progress Report by April 10. This is filed on FCC Form 2100 – Schedule 387 (see our article here).
Low Power TV stations and TV translators displaced by the repacking of TV stations following the incentive auction can file for “displacement channels” (channels that are in the new core TV band and not blocked by full-power stations) in a window that opens on April 10 and runs through May 15. See our article here about that window.
Radio stations involved in the recent translator filing windows have some important dates in April. April 18 through May 9 are the dates for the window for long-form applications by AM stations that filed applications for FM translators in the second FCC window that was open late last year for Class A and B AM stations to seek FM translators (see our article here). Applications that were not found to be singletons in that auction (in other words, those applications that did conflict with other applications filed during the window) should be looking for the announcement in the near term by the FCC of a filing window for amendments to applications to resolve their mutual exclusivity.
Responses to the FCC’s latest EEO audit are due by April 12. See our article here about that audit, which notes that responses are to be posted in a station’s online public file, not filed directly with the FCC.
A number of reply comments in pending FCC proceedings are due in April. Reply comments in the FCC proceeding to abolish the filing requirements for certain FCC contracts are due by April 2 (see our summary of the FCC proposals here). Reply Comments on the FCC’s inquiry into the national cap on TV ownership are due April 18 (see our summary here). And, finally, comments on the FCC’s proposals for an incubator program are due April 9 (see our summary here).
Another busy month in regulation for broadcasters seems to be in store. Always remember to check with your counsel for other dates that we may have missed here that are important to your station.
It appears that the FCC is attempting to clear its backlog of pending translator applications – and moving quickly to do so. On Friday, it released a Public Notice announcing a new auction beginning on May 15 for the small set of mutually exclusive applications left from last year’s window for the filing of FM translator applications by Class C and D AM stations, and setting the rules and procedures for that auction. While only 26 applications (in 12 groups of mutually exclusive applications – see the list in this Excel file) are involved in the auction, it shows that the FCC is trying to rapidly clear its decks of all remaining translator applications. Already on the FCC’s schedule, as we wrote here, is an auction of mutually exclusive translators left over from its 2003 FM translator window (for the rules adopted for that auction, see the FCC notice here). The FCC has also scheduled the filing of long-form applications for “singleton” applications (ones that are predicted to not cause interference to any other translator application or any existing station) from the window opened late last year for Class A and B AM stations to file for FM translators (see our post here on the opening of the long-form filing window for the translator applications), and long-form applications for applicants who were able to work out mutually exclusive situations in the first window so that they did not need to go to auction (see our post here). Still to be announced for applicants in that Class A and B window is the settlement period for applications that are mutually with other applications. Expect that announcement soon.
In September 2017, the FCC adopted new rules making AM proofs of performance easier to conduct for many stations. We summarized the changes here, and wrote about the FCC’s adoption of these changes here. The FCC yesterday released a Public Notice announcing that these rules have completed the review process under the Paperwork Reduction Act, and are now effective. Thus, stations can now take advantage of the simplified proofing options provided under these new rules.