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Indian E-music – The right mix of Indian Vibes… » David Oxenford


FCC Releases Proposed Revised Rules for Resolving FM Translator Complaints – Order to be Considered at May 9 Commission Meeting

Delivered... David Oxenford | Scene | Mon 22 Apr 2019 5:00 pm

The FCC last week released a draft order (available here) in its proceeding looking at revising the procedures to resolve complaints of interference by translators (and certain LPFM stations) to existing FM stations. The draft order proposes many changes to the current process. For the most part, these changes will provide more certainty to translator operators as to whether the new translator they are constructing will be subject to being forced off the air, while making it somewhat more difficult for full-power stations to sustain a claim of interference from new translators. We wrote about the FCC’s initiation of this proceeding here and here.

The headline in many reports about this draft order is the FCC’s tentative decision to allow translators that do cause interference to move to any available FM channel to resolve that interference. In the past, channel moves have been limited to moves to adjacent channels that would be considered a “minor change” by the FCC. In many markets, this will provide the translator operator more opportunities to continue to operate its translator if it does in fact create areas of new interference. Of course, in some spectrum-limited markets, there may not be an alternative channel on which a new translator can be authorized if it has to move off its initial channel (and interference complaints may well be more likely in such spectrum-limited markets as the translator operator may not have had many channels that were clearly free from interference concerns from which to select). But the proposed new rules would also make objections harder to support.

Initially, the FCC plans to adopt the 45 dbu contour as the cut-off for interference complaints. A full-service station could not raise interference complaints from listeners outside its predicted 45 dbu contour except in the limited circumstance where there is a significant community outside that contour where numerous listeners to the station reside. If there is such a significant community where listeners reside, a full-power station may ask for a waiver of the cut-off on complaints from outside the 45 dbu contour. Currently, there is no contour limit on complaints.

The FCC also seems likely to significantly raise the number of complaints needed to sustain a complaint. Currently, a single complaint of interference that cannot be resolved will result in a translator being forced to cease operations. Under the proposed new rules, the number of complaints needed to support an objection based on interference complaints is based on the population within the protected contour of the complaining station. In small markets, a complainant would need at least 6 listeners within its 45 dbu contour to complain. In the largest markets, with over 6 million people in the complainant’s service area, 65 complaints would be required to support an objection.

The FCC’s draft order sets standards for disinterested listeners needed to support a complaint. Advertisers and underwriters are not considered disinterested, but social media contacts or members of station listeners clubs (or donors to non-commercial stations) are considered disinterested. If a sufficient number of disinterested complaints are received, the translator operator and the complaining station are to work together to resolve the complaints, using a neutral engineer to assess interference if the parties cannot mutually agree. The FCC will rely on reports from disinterested engineers to resolve complaints that the parties themselves cannot resolve – and will try to do so within 90 days.

This draft order is still subject to comment by interested parties until a week before the FCC meeting. The May FCC meeting is currently set to take place on May 9.

FCC Releases Notices on Radio License Renewal Process – New Form, New Database and More Scrutiny of the Public File

Delivered... David Oxenford | Scene | Tue 16 Apr 2019 4:05 pm

The FCC yesterday released two public notices about the procedures to be used in the upcoming radio license renewal cycle. These actions were previewed by the FCC at the NAB Convention last week (see our article here). As we wrote here and here, the license renewal cycle begins with the filing of license renewal applications by stations in Maryland, the District of Columbia, Virginia and West Virginia that must be submitted by June 3 (as the June 1 deadline falls on a weekend, the deadline is extended to the next business day). Stations in these states should already be running their Pre-Filing Announcements on the 1st and 16th of the 2 months preceding the renewal filing (see our articles here and here).

The first of yesterday’s notices announces that the renewals will be filed in the FCC’s LMS database which was first used by radio broadcasters in connection with the filing of their last set of Biennial Ownership Reports. In addition to the license renewal form (now FCC Form 2100, Schedule 303-S), broadcasters will also have to submit a Broadcast Equal Employment Opportunity Program Report (LMS Form 2100, Schedule 396). The Public Notice says that the forms will be available by May 1. It also notes that, over time, other radio forms will migrate to the LMS database as the FCC leaves behind CDBS, the database that it has used for broadcasting for well over a decade.

The second Public Notice provides some more details about the renewal process. It makes clear that all stations, whether or not they have 5 full-time employees, will need to file both Schedule 303-S and Schedule 396. In connection with the EEO filing, stations with fewer than 5 full-time employees are only certifying that they have that number of employees, and reporting on whether there have been any EEO proceedings filed against them. The FCC also reminds broadcasters of their pre-filing announcement obligations referenced above and of their general duty to keep their online public file complete and up to date, confirming that if the online file is not complete by renewal time, fines are possible (see our articles here and here). For stations in the first renewal group, applications can be submitted any time after May 1.

Radio station operators should carefully review these new forms and their revised instructions and familiarize themselves with the workings of LMS if they have not already used that system. The upcoming renewal period is rapidly approaching, and these public notices make clear that the FCC will be closely monitoring your compliance with its rules.

FCC Seeks Comments on Proposal to Allow All-Digital AM Radio Transmission

Delivered... David Oxenford | Scene | Fri 12 Apr 2019 4:18 pm

The FCC yesterday released a Public Notice announcing the receipt of the Petition for Rulemaking asking that the FCC allow AM stations the option to operate an all-digital facility. We wrote about that Petition here. Currently, AM digital operations are allowed only in a hybrid mode – where the station transmits both an analog and a digital signal. Proponents of the all-digital operation argue that the full digital operation allows for better reception and increased stability of the transmission, and submit that it is time for stations that are willing to transmit in this better system to be allowed to do so without having to seek experimental authority – the only way in which an all-digital AM transmission is now allowed.

Some have suggested that, in order for the FCC to move this proposal forward on a timely basis, industry support is needed. Comments on this Petition for Rulemaking, specifically seeking comments on allowing operation in the MA3 All-Digital Mode of HD Radio, are due on May 13. If you are interested in having the option to operate an all-digital AM station, comments urging the FCC to move forward on this Petition should be filed by that deadline. Once comments are received, the FCC will consider them and, if they sense enough industry support, they will issue a Notice of Proposed Rulemaking seeking additional comments on rules for implementing this proposal. FCC approval for an all-digital AM service will not happen overnight, but this Public Notice and the comments due in May are certainly the first step in this evolution of AM radio.

Regulatory Issues from the NAB Convention: License Renewals, ATSC 3.0, Translator Interference, Ownership Rules, and Children’s TV

Delivered... David Oxenford | Scene | Thu 11 Apr 2019 3:47 pm

Questions about regulations from Washington don’t disappear just because you are spending time in Las Vegas, and this week’s NAB Convention brought discussion of many such issues. We’ll write about the discussion of antitrust issues that occurred during several sessions at the Convention in another post. But, today, we will report on news about more imminent actions on other issues pending before the FCC.

In his address to broadcasters at the conference, FCC Chairman Pai announced that the order on resolving translator interference complaints has been written and is now circulating among the Commissioners for review. The order is likely to be adopted at the FCC’s May meeting. We wrote here about the many suggestions on how to resolve complaints from full-power stations about interference from FM translators. While the Chairman did not go into detail on how the matter will be resolved, he did indicate that one proposal was likely to be adopted – that which would allow a translator that is allegedly causing interference to the regularly used signal of a full-power broadcast station to move to any open FM channel to resolve the interference. While that ability to change channels may not resolve all issues, particularly in urban areas where there is little available spectrum, it should be helpful in many other locations.

At another session, FCC Audio Division officials talked about the upcoming license renewal cycle. They announced that the renewal forms will be filed in the FCC’s LMS database, which was first used by radio broadcasters in connection with their Biennial Ownership Reports filed last year. The forms themselves will likely be available for completion on or before May 1 for the June 3 filing deadline for radio stations in Maryland, Virginia, West Virginia and the District of Columbia. Watch for an FCC public notice next week providing more details on the forms and filing requirements. And, in the interim, make sure that your online public file is complete and up-to-date (including the Quarterly Issues Programs lists – which, for the first quarter of 2019, should have been uploaded to the online public file no later than yesterday), as the online file will likely be reviewed by the FCC during the license renewal process. See our articles here and here on these issues.

On the TV side, the FCC said that the forms for filing for ATSC 3.0 facilities should be available shortly, so that applications can be accepted before the end of the quarter. At the conference, a consortium of stations pushing the ATSC 3.0 standard announced that they will be rolling out the new standard in 60 markets early in 2020.

Revisions to the children’s television rules relating to the amount of required educational and informational programming for children are also being considered. However, no time frame for the exact date by which any changes will be adopted was given. See our article here about the FCC’s pending review of the Children’s television rules.

The FCC Commissioners also discussed the current Quadrennial Review of the ownership rules – the proposed changes to the local radio ownership rules were a particular topic of conversation. See our post here on what changes to those rules are being discussed. All three Republican Commissioners made statements that the ownership rules need to reflect current marketplace realities. But it was also pointed out, particularly by the newest FCC Commissioner, Commissioner Starks, that the FCC principles of localism, competition and diversity need to be considered in any analysis of the ownership rules. Deadline for initial comments in the new Quadrennial Review is April 29.

These were but some of the legal issues discussed at the Convention. Clearly, no one wants to gamble on their regulatory future – so pay attention to the FCC decisions on these important upcoming matters.

FDA Schedules Hearing on Cannabis; FTC and FDA Send Cease and Desist Letters to Sellers of CBD Products – What is the Effect on Advertising?

Delivered... David Oxenford | Scene | Thu 4 Apr 2019 11:29 pm

The developments surrounding the regulation of cannabis products, and the impact of that regulation on the ability of broadcasters and other media companies to run ads for these products, continue on an almost daily basis.  Of course, the developments don’t all point in a single direction.  As described below, at the same time as the FDA schedules a hearing to look at cannabis products and the rules that should apply to them, the FTC and FDA together have written warning letters to CBD marketers advising them to stay away from making specific health claims about their products and to avoid promoting edible products.  What does this mean for media companies that have been approached to advertise these products?

We very recently wrote about the murky state of the law on CBD advertising (mentioning our continuing concerns about marijuana advertising even in states where it has been “legalized”).  In that article, we warned that broadcasters should be particularly concerned about selling advertising that markets CBD products to be ingested, or advertising which makes unsupported health claims.  In a joint action announced last week, the FTC and the FDA wrote letters to three sellers of CBD products, warning those companies that their marketing raised legal issues.  In these letters, the FTC expressed concern that the marketing contained health claims that could not be substantiated, and the FDA was concerned about the marketing of supplements and other CDB products to be taken orally that had not been approved by the FDA as either foods or medicines.  At least one of the letters cited a “salve” that presumably was not to be ingested, so the concern there seemed to be solely the specific health claims made for the product.  These letters reinforce the concerns that we expressed about advertising that contains specific health claims or which deals with products to be taken by mouth (either as dietary supplements, medicines or in other foods) – so stations should be especially wary of such ads. 

In our article we also mentioned that the FDA was expected to hold a hearing soon to look at the issues of regulating CBD and other cannabis products – looking at labeling and purity standards as well as other issues involved in the marketing of such products.  A notice was published in the Federal Register this week announcing that the hearing will be held on May 31, and written comments will be accepted through July 2.  It will be interesting to watch this proceeding to see the issues that are of concern to the FDA in marketing these cannabis products.

Together, these actions reiterate the ambiguous status of CBD sales.  As we detailed in our prior article, while the 2018 Farm Act seems to legalize the production and sale of hemp-based CBD products, that production and sale is only supposed to be done pursuant to federal and state laws that have not yet been approved.  Some production is also legal under the 2014 Farm Act, but it is difficult to determine whether what is being sold has really been legally produced.  But CBD products seem to be ubiquitous – I even recently received an ad from a well-known national chain of beauty spas from which I had once purchased a gift certificate advertising their new CBD oil treatments.  And even big chain drugstores like CVS and Walgreens seem to be getting into the sale of at least some CBDs.  Broadcasters and other media companies nonetheless need to move slowly and talk with counsel about ways to minimize risks in accepting advertising for what has become a fast-growing product category for all sorts of businesses.

Music Rights Suit by Radio Music License Committee Against GMR Moved to California Courts – No End in Sight?

Delivered... David Oxenford | Scene | Thu 4 Apr 2019 4:24 pm

This week, the lawsuit brought by the Radio Music License Committee (RMLC) against new performing rights organization GMR (Global Music Rights) for alleged violations of the antitrust laws was determined by a court in Pennsylvania to have been brought in the wrong place – and transferred to a court in California.  This case has been on hold for well over two years while this procedural question was ironed out.  Now that the case has been transferred to California, the litigation that has been on hold while the jurisdictional issue was resolved can begin – but don’t expect quick results as these complicated cases can take years to resolve.  What is involved in this case?

Back in 2016, when RMLC concluded that it was not likely to reach a negotiated royalty rate for radio’s use of the musical compositions controlled by GMR songwriters and publishers, it brought the Pennsylvania court action.  In that action, it argued that the rates that GMR wanted were an abuse of the market power that GMR was able to exercise by banding these songwriters together and offering a license to radio stations on an all-or-nothing basis (see our articles here and here for more on the initial suit).  As it had done successfully with SESAC (see our article here), and as has been the case for decades with ASCAP and BMI, RMLC had hoped to have the court declare that GMR’s unrestrained royalty demands were contrary to the antitrust laws, and that some limits should be imposed on those rates.  The RMLC suit against GMR was brought in the same Pennsylvania court in which RMLC had sued SESAC, which led to the settlement subjecting SESAC rates to arbitration if the parties could not voluntarily agree on rates (and the arbitration process ultimately resulted in significantly lower rates for commercial radio than SESAC had previously received – see our article here on the results of the arbitration).

GMR countered by suing RMLC in a California court (California being where GMR is headquartered) arguing that RMLC was a buyer’s cartel – using an antitrust argument in defense by arguing that RMLC should not be able to negotiate on behalf of virtually all of the commercial radio industry even though that is what it does with ASCAP, BMI and SESAC (see our article here on the countersuit).  GMR also argued in the Pennsylvania court that the court had no jurisdiction over GMR, as GMR had not taken any actions in that state other than to offer music licenses to radio station owners that happened to have stations there.  While RMLC contended that that the music licenses (and some other actions taken by GMR) were enough to make it subject to the federal court in Pennsylvania, the court disagreed, sending the case to California.

That does not, by any means, suggest that the case is over for the radio industry.  Instead, the issues that had been raised by RMLC can now be heard in the California court, along with the issues that GMR has raised in defense.  Antitrust cases can take years to try, so there may not soon been a resolution of these issues.  In the interim, we expect that the current interim licenses (see our article here) will be extended while these issues are litigated unless, at some point, a settlement is achieved.  Keep watching the developments in this litigation to see what royalties will finally be due to this organization.

April Regulatory Dates for Broadcasters – Radio License Renewal, Quarterly Issues Programs Lists and Children’s Television Reports, Repacking and EEO Dates, and Comments on the Quadrennial Review

Delivered... David Oxenford | Scene | Fri 29 Mar 2019 4:58 pm

April, as we wrote last month, begins the start of the radio license renewal process, with stations in Maryland, Virginia, West Virginia and the District of Columbia having to run on the 1st and 16th of the month public notices of the planned filing of their license renewals at the beginning of June.  As we also noted last month, April also brings a requirement that, by the 10th of the month, stations add to their online public file Quarterly Issues Programs Lists for the prior quarter, setting out the most important issues facing their communities in the prior quarter, and the programming that they aired to address those issues.  We have written about the importance of these quarterly reports to the FCC to show how you served the public interest and the fines that can be imposed at renewal time if the lists are not properly prepared and uploaded to the online public file.  So don’t forget the obligation this obligation that applies to all full-power stations (and Class A TV stations).  We expect that the FCC will be watching (and in fact already is, as evident from some of their recent warnings to stations)!

In addition, April 1 brings the obligation for radio and television stations in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas that are part of an Employment Unit with 5 or more full-time employees, to add to their online public inspection file their Annual EEO Public Inspection File Report.  This report documents the full-time employment openings at the station in the prior year, the recruitment sources used to fill those positions, and the non-vacancy specific outreach efforts (the menu options) that stations use to inform their community about broadcast job openings and the efforts they make to train their staffs to assume more involved roles at their stations.  TV stations in Pennsylvania and Delaware will also file with the FCC their Form 397 EEO Mid-Term Reports – likely the last mid-term reports to be filed as the FCC’s order abolishing these reports should become effective before the next such reports are due to be submitted (see our articles here and here on the FCC’s abolition of the Mid-Term Report and its continued enforcement of the EEO rules through EEO audits).

Quarterly Children’s Television Reports are also due by the 10th of the month, reporting on the educational and informational programming directed to children broadcast on each stream that a TV station broadcasts (the obligations of TV stations to broadcast educational children’s TV programming is under review – see our post here – but that does not affect this upcoming filing obligation).  The 10th is also the date for TV stations affected by the repacking to give the FCC a status report on their repacking efforts, though the FCC just agreed to waive that requirement for TV stations in repacking Stage 3 as they have an April 12 deadline for their “10 Week Report” – due 10 weeks before the date on which their transition should be complete – and these reports are seen as essentially duplicative.

On April 29, comments are due in the FCC’s Quadrennial Review of its ownership rules.  This review will principally look at radio ownership rules (see our article here).  But the FCC will also be looking at trying to provide more definition as to when they will allow the common ownership of two of the top 4 TV stations in any market, and also at whether one party could own 2 of the top 4 broadcast TV networks.

Thus, as always, April will be a busy regulatory month.  Consult with your own counsel about dates we may not have highlighted here, and for dates that may apply specifically to your station.  For more information about upcoming regulatory dates, see our Broadcaster’s Regulatory Calendar, here.

April Fool’s Day is Monday – Don’t Let the Joke Be on You by Forgetting the FCC’s Hoax Rule

Delivered... David Oxenford | Scene | Thu 28 Mar 2019 5:36 pm

It’s that time again.  If you are planning any on-air pranks on that air on Monday for April Fools’ Day, think twice.  As we do every year about this time, we need to play our role as attorneys and ruin the fun by repeating our reminder that broadcasters need to be careful with any on-air pranks, jokes or other bits prepared especially for the day.  While a little fun is OK, remember that the FCC does have a rule against on-air hoaxes. While issues under this rule can arise at any time, broadcaster’s temptation to go over the line is probably highest on April 1.

The FCC’s rule against broadcast hoaxes, Section 73.1217, prevents stations from running any information about a “crime or catastrophe” on the air, if the broadcaster (1) knows the information to be false, (2) it is reasonably foreseeable that the broadcast of the material will cause substantial public harm and (3) public harm is in fact caused.  Public harm is defined as “direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties.”  Air a program that fits within this definition and causes a public harm, and expect to be fined by the FCC.

This rule was adopted in the early 1990s after several incidents that were well-publicized in the broadcast industry, including one case where the on-air personalities at a station falsely claimed that they had been taken hostage, and another case where a station broadcast bulletins reporting that a local trash dump had exploded like a volcano and was spewing burning trash.  In both cases, first responders were notified about the non-existent emergencies, actually responded to the notices that listeners called in, and were prevented from responding to real emergencies.  In light of this sort of incident, the FCC adopted its prohibition against broadcast hoaxes.  But, as we’ve reminded broadcasters before, the FCC hoax rule is not the only reason to be wary on April 1.

Beyond potential FCC liability, any station activity that could present the risk of bodily harm to a participant also raises the potential for civil liability.  In cases where people are injured because first responders had been responding to the hoaxes instead of to real emergencies, stations could have faced potential liability.   If some April Fools’ stunt by a station goes wrong, and someone is injured either because police, fire or paramedics are tied up responding to a false alarm, or if someone is hurt rushing to or from the scene of the non-existent calamity that was reported on a radio station, the victim will be looking for a deep pocket to sue – and broadcasters can become the target.  Even a case that doesn’t result in liability can be expensive to defend and subject the station to unwanted negative publicity.  So, have fun, but be careful how you do it.

 

Time for All-Digital AM?  Petition for Rulemaking Asks that the FCC Allow It

Delivered... David Oxenford | Scene | Wed 27 Mar 2019 4:34 pm

For decades, the FCC has been attempting to solve problems with AM reception – in the 90s looking to protect AMs from each other, and today trying to assist them in overcoming the effects of background “noise” coming from the proliferation of electronic devices in the environment which make AM reception, particularly in urban areas, very difficult. Even a number of car makers have announced plans to remove AM radios from new vehicles – particularly electric ones – given these stations’ susceptibility to interference from in-car electronics. Is there a solution?

Bryan Broadcasting (a long-time client that I assisted with its pleading) thinks it is time that the FCC do something dramatic to give AM a long-term future. This week it filed a Petition for Rulemaking asking the FCC to allow any AM to go all-digital in its operation.  The pleading does not suggest that any AM be forced to convert to an all-digital operation – instead it proposes that stations be given the option to make that conversion whenever they want. This is not a new concept, the FCC having considered it in the past and, in its 2015 AM Revitalization Order and Further Notice of Proposed Rulemaking, discussed listed it as an issue on which they wanted comments so that they could consider such a transition at some point in the future (that discussion principally advanced in the FCC’s questions about the future use of the expanded band – see our post here on that 2015 Order).  Already, there is one AM station in Maryland operating full-time with all-digital facilities under experimental authority, and several tests have been conducted across the country on this all-digital operation.  While these tests have shown many positive results, why suggest this option for AM stations to make this digital conversion now?

The petition says that this proposal is just a recognition of the reality for AM broadcasting.  The electronic noise in the environment is not going away no matter what tinkering is done with the current AM transmission standard.  Music programming, and probably much other programming as well, simply will not be of acceptable quality when subject to this interference.  An all-digital signal can overcome this noise, and an all-digital signal is much more robust than the digital operation allowed by the hybrid digital-analog system currently permitted by the FCC.

While FM translators have provided relief to some AM stations, they have not solved any reception issues with the AM signal – they have just given the stations that were fortunate enough to get a translator a lifeline until a real solution comes along.  Plus, not all AM stations, particularly those in large markets, were able to be awarded a translator license.  For those AM stations that did not get a translator, or for those whose AM signal reaches farther than a translator can, other solutions are needed.  Bryan Broadcasting argues that this market-based approach – a voluntary transition to AM digital – may provide the answer for AM stations.

This is just a Petition for Rulemaking.  The FCC is likely to ask for comments on the Petition, then consider whether to issue a formal Notice of Proposed Rulemaking.  If the proposal gets to an NPRM, then more comments will be taken before this proposal could be adopted.  Thus, this permission will not happen overnight, although additional stations could ask for experimental authority in the meantime.  But if Bryan Broadcasting has its way, this option will be open to AM broadcasters soon so that they can adapt to modern marketplace conditions.

Advertising for CBD – Safe for Broadcasters?

Delivered... David Oxenford | Scene | Mon 25 Mar 2019 4:52 pm

In the last few months, we probably have had more questions about advertising for CBD products than any other topic. At this point, CBD products seem to be sold in nearly every state in the country, and discussions about CBD’s effectiveness seem to be staples on national and local television talk programs. Broadcasters naturally ask whether they can advertise these seemingly ubiquitous products. Unfortunately, the state of the law on CBD at the current time is particularly confusing, as discussed in this article.

First, a primer on terminology. CBD, short for cannabidiol, is a derivative of the Cannabis sativa plant. Industrial hemp is produced from portions of a strain of the same plant containing low concentrations of the psychoactive chemical known as THC, or tetrahydrocannabinol, and hemp can also be used to produce CBD. In contrast, recreational and medical cannabis, derived from the dried flowers, leaves, and stems of the female Cannabis plant (which we’ll call marijuana to distinguish it from hemp), contains higher concentrations of THC and lower concentrations of CBD. Preliminary clinical research has shown the potential benefits of using CBD to treat anxiety, cognition, movement disorders, and pain, and certainly these properties are attributed to the substance in popular culture. But is it legal?

Although recreational marijuana use is now legal in 10 states and the District of Columbia, and medical marijuana is legal in 33 states, it remains an illegal Schedule I drug under the federal Controlled Substances Act. Possession and distribution is a felony under federal law, as is the use of radio, TV or the Internet to facilitate that distribution. Because marijuana is still illegal under federal law, we have written repeatedly that it remains a product that broadcasters are taking significant risks in advertising – even if it is legal in a particular state for medical or recreational purposes (see, for instance, our articles here and here). But now CBD is in a different category, at least if it is hemp-derived CBD with low levels of THC.

The Farm Act, passed in late 2018, removed hemp (and thus hemp-derived CBD) from Schedule I, so its possession is no longer illegal under federal law as long as the THC level is less than 0.3%. But CBD derived from marijuana remains an illegal Schedule I drug, so it is important to know how the CBD is being produced, as it helps determine whether the CBD is legal or illegal. Making the law surrounding CBD even more confusing is that, while there is no longer a federal ban on the possession of hemp-derived CBD, there is not yet a legal mechanism for widespread commercial production of CBD, except in limited circumstances, and whether the production fits under these limited circumstances is difficult to discern when a broadcaster is approached to advertise a CBD product. Moreover, other issues must be weighed in any advertising decision.

The 2018 Farm Act sets out a process for the legalization of the production of hemp products, including CBD. But, under the Act, any industrial manufacture of CBD products can only be done through state plans to regulate the sale and distribution of these products, or pursuant to a federal plan to be adopted by the US Department of Agriculture.  The state plans also must be approved by the USDA before production begins.  At least two states have filed requests with the USDA for approval of their state plans. Unfortunately, the USDA has not yet adopted rules for approving these programs. It held a “listening session” earlier this month on proposed rules for processing requests for approval of state plans (see the transcript of the listening session here), but it does not seem likely that rules will be adopted until much later this year, as there was much discussion during the session of trying to have the rules ready for the 2020 growing season. But there were also calls for quicker action, and more clarity on the current state of the law, including one from a representative of a trade association for supermarkets and drug stores, which face the same issues as do broadcasters – is it really legal to sell the CBD products that are already on the market?

Until the USDA has adopted rules for processing state plans, and has approved some of those plans (as well as a federal plan for states that do not act), the only manufacturing of CBD that is permitted is production authorized under a prior Farm Act from 2014.  The 2014 Act only permitted hemp production projects authorized by a state or a university as part of a research program, and no widespread commercial exploitation of CBD under the 2014 Act was supposed to happen except under pilot programs as part of a research project. From some of the testimony given at the recent USDA listening session, it appears that some of the state plans for production on an experimental basis allowed for some serious operations – one company representative talking about how it had over 200 employees producing legal hemp products pursuant to one of these supposedly experimental state projects.  While federal authorities may not have envisioned such large commercial production under the 2014 Act, it does not appear that there have been any federal efforts to reign in these producers.

The reason for regulatory oversight of hemp production by the USDA and the states appears to be to make sure that consumers are actually getting what they think they are buying, and also to make sure that producers take steps to reduce the risk that marijuana products (or hemp products with greater than .3% THC) become available for public consumption.  See the USDA statement of principles here. In recent years, there have been numerous articles and statements from regulators suggesting that CBD products are often not what they claim to be – some allegedly having more THC than advertised, others having little or no actual CBD.  The FDA is supposed to hold hearings in April about its authority over CBD, and part of that process seems to be geared toward gathering evidence as to what products are safe and what limits to put on the purity and potency of such products, and the disclosure of their contents.

Some broadcasters, after (1) discussion with their counsel, (2) investigation with the advertiser, and (3) some degree of reasonableness (avoiding sales that are done in some dark garage or from the back of a truck on one hand, to possibly being more comfortable with products sold at a big national retailer where there is some expectation that the advertiser has done some of its own due diligence), may be able to satisfy themselves about the question of whether the CBD product that they are being asked to advertise was legally produced and is otherwise lawful. After all, there are plenty of products being advertised on the radio where the broadcaster has never thought to inquire as to whether the product was legally manufactured. But that does not end the broadcaster’s consideration as to whether to run a CBD ad. In fact, there may be far more serious questions to consider, given that a particular type of CBD may be illegal under federal law.

Even though the USDA is moving to implement the provisions of the Farm Act that legalize the production and commercial distribution of hemp products with low THC levels, the FDA retains jurisdiction to prohibit uses of any cannabis product as a pharmaceutical product or food additive.   Under this authority, the FDA has made clear that it still prohibits the sale of CBD (hemp-derived or otherwise) as a food additive or oral supplement (see its statement here, issued after the adoption of the 2018 Farm Act).  In fact, this year, after the adoption of the Farm Act, the FDA has raided stores selling CBD as a food additive, and health authorities in several states have followed suit.  As noted above, the head of the FDA announced in recent Congressional testimony that it would hold hearings on CBD, but he soon thereafter announced his resignation, leaving that timetable up in the air. Edibles and dietary supplements containing CBD will likely be a principal topic that will be considered at the FDA hearing whenever it is finally held.

Until the FDA acts, and regardless of what the USDA does with respect to hemp production, it seems to still be a federal offense to sell any CBD product that is to be ingested – whether it is as a dietary supplement or as an additive to foods and beverages – unless the FDA has approved those products. Late last year, the FDA approved the use of a CDB-based product (sold under the brand name Epidiolex) as a drug to control epilepsy seizures, but that is a very limited exception at this point. Note, again adding to the confusion, the FDA has also approved the use of certain hemp products in food, but only where they have negligible levels of CBD and THC (see, e.g. the FDA notice here). The approval of hemp as an addition to foods confuses many in the public, as hemp is often seen as the equivalent of CBD (or marijuana) so, when they see it advertised in foods or beverages, they believe it to the be the same as CBD. The FDA, however, sees these products as legally different.

Similarly, both federal and state authorities warn about making unproven health claims about any of these substances. The FDA and FTC have informally suggested that they may be concerned about any health claims made for any CBD products not backed by academic studies.  With these warnings from government agencies about CBD products that make health claims or which can be ingested, and the broadcaster’s status as a federal licensee, it would seem as if steering clear of the promotion of products that are still prohibited under federal law would make sense.

But even if a broadcaster can satisfy itself that the CBD comes from legal sources, is not to be ingested, and does not make unverifiable health claims, this does not end the inquiry. The various states have differing laws on hemp products generally and CBD specifically. Some states still have not liberalized their laws along the lines of the 2018 Farm Act, and thus are still taking a hard line on any sales of hemp or CBD. Others, even including some states that have legalized recreational or medical marijuana, have rules that appear more restrictive of hemp and CBD products than of “legal” marijuana. Others have already amended their laws to effectively legalize these products. Even then, most states restrict sales to minors (and some specifically address advertising restrictions), so it would make sense for stations to observe the same kinds of rules that they do for alcohol advertisements, by keeping ads out of programming where a high percentage of the audience may be under the legal age (see our articles here and here). Stations need to do a thorough check of their state’s laws and the regulations of their state agencies to see what other rules might apply to these sales.

After all that, we are back to where we began. There are no clear answers on CBD advertising yet. Consider these factors, consult with your own attorney and give some careful thought as to whether or not to accept CBD advertising on your station, and watch for developments as they occur in the coming months.

FCC Adopts Rules for Reimbursement of LPTV, TV Translators and FMs Displaced by Incentive Auction; Releases Catalog of Reimbursable Expenses; and Lifts Filing Freeze

Delivered... David Oxenford | Scene | Thu 21 Mar 2019 4:27 pm

In a flurry of actions in the last week, the FCC has acted to assist LPTV stations and TV translators displaced by the TV incentive auction.   It also adopted rules to assist FM stations (including FM translators and Low Power FM stations) that were adversely affected by tower work caused by the incentive auction on the towers they share with TV stations. At the FCC meeting last week, the FCC issued its Report and Order agreeing to reimburse LPTV and TV translator stations for the expenses that they incur in changing channels to accommodate the shrinking of the TV band and the repacking of primary TV stations, as long as those expenses were not reimbursed by other parties (certain wireless carriers have reportedly reimbursed some of these stations for moving quickly to vacate their old channels). FM stations will also be reimbursed for their expenses incurred by tower work by TV stations involved in the repacking that displaced the FM station’s operations. The FCC did not adopt proposals for only partial reimbursement of expenses dependent on the length of displacement (see our article here for more on what those proposals were) – good news for FMs affected by these changes.

The FCC subsequently released a catalog of the types of expenses that would be reimbursed, with estimates for the expected range of those expenses. While displaced stations can seek reimbursement for other expenses that were incurred as a direct result of the incentive auction (excluding any reimbursement for lost sales or employee time), and for expenses that proved to be greater than the FCC’s expectations, the station seeking such reimbursement will need to prove that the expenditures were reasonable and justified. As noted in the Public Notice accompanying the catalog of reimbursable expenses, the FCC will be, at a later date, announcing when eligible stations can start filing for reimbursement. So if you are expecting reimbursement, watch for that notice.

Finally, the FCC this week lifted a filing freeze and announced that LPTV stations and TV translators – even those not affected by the incentive auction and repacking – can now file displacement applications and digital companion channel applications. Such applications were frozen to allow stations affected by the repacking a stable database of channels to which they could move. The lifting of the freeze will be effective April 18, so get your applications ready if you need a change, as these applications are processed on a first-come, first-serve basis. Plenty of actions for LPTV stations and TV translators to digest – and some for FM stations too.

Comment Dates Set on Proposed Rule Changes for Reviewing New Noncommercial and LPFM Applications

Delivered... David Oxenford | Scene | Tue 19 Mar 2019 3:58 pm

As we wrote here, the FCC recently adopted a Notice of Proposed Rulemaking to consider changes to its rules dealing with applications for new noncommercial educational stations and LPFM stations. The FCC plans to publish that Notice of Proposed Rulemaking in the Federal Register tomorrow, making comments due May 19, 2019, with replies due on June 18 assuming publication takes place as planned. The changes proposed are set out in our article summarizing the FCC’s NPRM when the draft was first released.   They would affect everything from requirements for the governing documents of applicants for new stations to holding periods for new stations to the length of LPFM construction permits. If you are interested in applying for a new noncommercial station at some point in the future, or in the rules that govern those that do apply, watch this proceeding very carefully.

Comment Dates Set on Proposed Rule Changes for Reviewing New Noncommercial and LPFM Applications

Delivered... David Oxenford | Scene | Tue 19 Mar 2019 3:58 pm

As we wrote here, the FCC recently adopted a Notice of Proposed Rulemaking to consider changes to its rules dealing with applications for new noncommercial educational stations and LPFM stations. The FCC plans to publish that Notice of Proposed Rulemaking in the Federal Register tomorrow, making comments due May 19, 2019, with replies due on June 18 assuming publication takes place as planned. The changes proposed are set out in our article summarizing the FCC’s NPRM when the draft was first released.   They would affect everything from requirements for the governing documents of applicants for new stations to holding periods for new stations to the length of LPFM construction permits. If you are interested in applying for a new noncommercial station at some point in the future, or in the rules that govern those that do apply, watch this proceeding very carefully.

FCC Issues Reminder on Upcoming License Renewal Cycle: Begins with Radio in Maryland, Virginia, West Virginia, and the District of Columbia in June and Pre-Filing Public Notices on April 1

Delivered... David Oxenford | Scene | Mon 18 Mar 2019 3:09 pm

The FCC on Friday issued a Public Notice reminding radio stations that the license renewal cycle begins in June, when all stations in Maryland, Virginia, West Virginia, and the District of Columbia are due to electronically file their license renewal applications, along with the Broadcast Equal Employment Opportunity Report on Form 396 (the 396 being required of all full-power stations, even those with fewer than 5 full-time employees). It is still unclear whether these applications will be filed using the current electronic database for radio (called CDBS), or whether the FCC will require radio stations to use the new electronic database that TV stations have been using for several years now (called LMS).

The renewal filing obligation applies to LPFMs and FM translator stations, as well as full-power stations. As we have written many times in recent months (for example here and here), after the June filing deadline for these Mid-Atlantic states, the renewal cycle moves south – with stations in the Carolinas filing by August 1. Every other month for the next 3 years, radio stations in other states will file their renewal applications. The order in which stations file is available on the FCC’s website, here. The TV renewal cycle starts one year later, beginning in June 2020.

The Public Notice reminds stations whose renewals are approaching that they must give public notice of the upcoming renewal filing on the 1st and 16th days of the two months preceding the renewal filing. We noted in our most recent post on upcoming regulatory dates that this pre-filing notice for stations in the Mid-Atlantic states with the June filing deadline must start running on April 1. The FCC’s Public Notice notes that the pre-filing notices should follow the format set out in the rules, even though that format is outdated, as it assumes a paper public file and a manned main studio, even though neither continue to be required by the FCC. Unfortunately, the FCC has not yet managed to update the public notice rule to take these changes into account.

The Public Notice also reminds stations of the importance of the online public file, and the documents that are required to be in that file. Last week, we wrote about an inquiry that came from the FCC addressed to many stations that either had not activated the file or which had incomplete online public files. This notice seems to confirm our concerns that the FCC will be reviewing the public file at license renewal time, and that stations that have not complied with the public file rules may be facing substantial penalties. As we wrote in the last license renewal cycle, stations that were missing Quarterly Issues Programs Lists for several quarters were receiving fines of $10,000 or more (see our articles here, here, here, here and here). This kind of penalty highlights the cost of noncompliance.

So the next license renewal is quickly becoming a reality for radio stations. Be ready to file when your turn comes, and keep up to date on new information from the FCC, including what database to use in order to file your renewal application. Finally, be sure that you are in compliance with the online public file rules and other compliance requirements to avoid big penalties during the renewal cycle.

Transfer of FCC EEO Branch from Media Bureau to Enforcement Bureau Now Effective

Delivered... David Oxenford | Scene | Sun 17 Mar 2019 2:56 pm

In July, we wrote about the FCC’s plan to transfer the responsibility for EEO enforcement from the Media Bureau, where it has resided, to the Enforcement Bureau which the FCC suggested would have more resources and experience to aggressively enforce the FCC’s EEO rules and policies.  That transfer was effective on Friday (see the FCC public notice here).  So expect future correspondence on EEO matters to come from the Enforcement Bureau, rather than the Media Bureau, though we expect that the people actually processing the day-to-day activities of the EEO Branch (like the recent EEO audit we wrote about here) to remain largely the same.  So, while there is a new cop in town, this shows that the FCC continues to take EEO enforcement seriously, as should you at your broadcast station.  See our article here on the basics of broadcasters EEO obligations, as updated here by the FCC’s changes in its requirements for the wide-dissemination of information about station job openings.

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