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Indian E-music – The right mix of Indian Vibes… » Political Broadcasting

Moving Broadcast Political Advertising Rules to the Online World – NY State Adopts a New Law While Congress Considers Online Political Advertising Disclosures, and the FEC Considers Enhanced Online Sponsorship Identification

Delivered... David Oxenford | Scene | Mon 14 May 2018 5:15 pm

With high profile primaries in numerous states and similar elections last week, and more coming over the next few months in preparation for the November election, broadcasters are dealing with the legal issues that arise with on-air advertising that either promotes or attacks candidates and which addresses other important matters that will be decided in the election – including ballot issues in a number of states. While we have addressed many of the legal questions that arise with on-air political advertising in other posts on this blog and elsewhere (see, for instance, our Political Broadcasting Guide here and these slides from my recent presentation on the FCC political advertising rules for the Washington State Association of Broadcasters), we thought that it was worth discussing some of the efforts that are underway to bring FCC-like regulation to the world of online political advertising.

Thus far, the FCC has tended to stay out of the online political broadcasting world. As we wrote a decade ago, other than having to give some consideration to the value of online advertising thrown into a package with over-the-air ads, the FCC avoids regulation of ad sales on websites and advertising delivered solely through other digital media platforms. So a broadcaster who sells stand-alone online ads to political candidates or issue advertisers need not worry about questions of lowest unit rates, reasonable access, or the political file.

In some cases, there may be concerns in this regard. For over-the-air broadcasters, the content of a political ad cannot be censored, and therefore the broadcaster cannot be held liable for that that candidate says in its advertising (see our article here). But what happens if that broadcast programming is streamed on the Internet? The “no censorship” provisions of the Communications Act do not apply, by their terms, to the advertising streamed on the Internet. While one would think that courts would allow the immunity to carry over to simulcast ads, there have been no cases testing that issue. But, certainly, broadcasters should be concerned with on-line ads containing potentially libelous claims, just as they are when airing attack ads by non-candidate groups such as PACs, unions, and corporations to whom the “no censorship” rules do not apply, and where the station has theoretical liability if it has notice that an ad it is airing contains defamatory content or other legally actionable material.

While the FCC has not been regulating advertising that is run solely online, there are numerous attempts to impose FCC-like restrictions on such ads. For instance, the Federal Election Commission currently is accepting public comment on whether it should impose the same sponsorship disclosure obligations on online audio and video political advertising that are imposed on those ads when run on a broadcast television or radio platform (see its Notice of Proposed Rulemaking, here). This would include all the “stand-by-your-ad” disclosures (“I’m John Smith and I approved this message”) that the listening public has become accustomed to on broadcast stations for over a decade.

This would, at first blush, seem to be a common-sense approach to labeling online political audio and video advertising. Yet, in asking for comment on its proposed rules, the FEC advanced two alternative approaches to such regulation – one looking to adopt the broadcast-like disclosures and the other providing only more generalized disclosure obligations about the sponsorship of a political message. Why would that alternative approach be suggested when there are concerns that the very general FEC disclosure obligations that already are imposed on paid political ads are seen as being insufficient? Partially, the alternative has been advanced as there is a fear that the broadcast-like disclosures, while perhaps appropriate for broadcast-like content transmitted through digital channels, may not be appropriate for all audio and video delivered through digital platforms. One example given in the rulemaking is virtual reality games, where commercial content is sometimes embedded in the game itself. If a candidate was to pop up in some virtual world to give some sort of political sales pitch, would having that candidate’s avatar follow up the pitch with a statement as to who he or she is and that they have approved the message be appropriate, or even workable? Would an avatar of a candidate meet the requirement that a full–screen image of the candidate be shown while delivering the stand-by-your-ad disclaimers? Comments in this proceeding are due with the FEC by May 25. The FEC also plans a public hearing on the issues that these proposals raise on June 27.

Congress has also indicated interest in FCC-like regulation on online political and issue advertising. Senators Mark Warner, Amy Klobuchar and John McCain introduced legislation called the Honest Ads Act late last year, following some of the revelations about foreign influence on US elections and the political process through Facebook and other social media platforms. Their legislation would require clear and conspicuous sponsorship disclosures on all electioneering communications (setting out standards for such disclosures), and would impose regulations similar to the FCC’s political file obligations for the disclosure of purchases of more than $500 on political advertisements (including federal issue ads) on large digital media platforms. While introduced last year, that bill has not progressed in the Senate or the House.

Some state legislatures have taken an interest in the issue, and New York adopted its own political disclosure legislation mirroring many of the provisions of the Honest Ads Act. The New York Democracy Protection Act (see summary here and text of the bill as passed by the NY State Assembly here – the final text as signed by the governor apparently not available online) imposes sponsorship disclosure obligations on online advertising, including NY state ballot propositions, plus a requirement for an online repository of sponsorship information for online ads, similar to the FCC’s required online political file. It appears that this political file for online political ads in New York will be hosted by the New York State Board of Elections, similar to the hosting of broadcaster’s online public files by the FCC. The Board of Elections is supposed to come up with implementing regulations within 120 days from the recent passage of the Act, including a determination of which online platforms are subject to these rules. So, if you are selling online political ads in New York, or even if you have online users in New York State, look for those regulations before the November election to see how your activities may be implicated.

In light of all of this legislative activity, some of the big online platforms have voluntarily promised more disclosures. Facebook has reportedly even indicated support for regulation, and press reports indicate that Twitter has as well. Google, while not necessarily supporting regulations, has reportedly announced its own efforts to disclose the identity of political advertisers. So, even in the absence of legislation, it appears that there will be more transparency in online political advertising in time for the November election.

There are bound to be more efforts to regulate online political advertising – either before this election or afterward as a result of practices that could arise during the upcoming campaigns. All companies selling online advertising should be watching these developments carefully, as they may well affect their sales to candidates and issue advertisers – particularly under the already-adopted New York State law.

May Regulatory Dates for Broadcasters – FCC Meeting, FM Translator and LPTV Filing Windows, Political Windows and More Consideration of Music Reforms

Delivered... David Oxenford | Scene | Mon 30 Apr 2018 4:13 pm

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.

What Issues Should Broadcasters be Considering When Taking Advantage of New Rules Abolishing Main Studio and Staffing Requirements?

Delivered... David Oxenford | Scene | Wed 24 Jan 2018 6:25 pm

The FCC this week published a Small Business Compliance Guide for companies looking to take advantage of the FCC’s elimination of the main studio rules and the studio staffing requirements associated with those rules (see our articles here and here summarizing the rule changes). The Compliance Guide points out that stations looking to eliminate their main studios still must maintain a local toll-free telephone number where residents of the community served by the station can call to ask questions or provide information to the licensee. The Guide also references the requirement that access to the public file must be maintained. While, by March 1, all broadcast stations (unless they have obtained a waiver) will have their public files online (see our article here), it is possible that some stations may have a remnant of their file still in paper even after the conversion date. “Old political documents” (documents dealing with advertising sales to candidates, other candidate “uses,” and issue advertising) that were created before the date that a station activates its online file for public viewing need not be uploaded but can be kept in a paper file for the relevant holding period (generally two years). If the station decides not to upload those old political documents, or closes its main studio before they have gone live with their online public file, they will need to maintain a paper file in their community of license. The Guide also mentions how Class A TV stations, which are required to show that they originate programming from their local service area, will be treated since they will no longer have a legally mandated main studio. But are there questions that the Guide does not address?

We think that there are, and that broadcasters who are considering doing away with their main studio need to consider numerous other matters. First, and most importantly, the obligation for a station to serve its local community with public interest programming remains on the books. So stations need to be sure that they are staying in touch with the local issues facing their communities, and they need to address those issues in their local programming. Addressing these issues needs to be documented in Quarterly Issues Programs lists which are the only legally-mandated documents that demonstrate how a station has served its community. There are other issues to consider as well.

Stations need to notify the FCC if they are being controlled from a location other than their transmitter or main studio locations. So, if there is no main studio, and no one is physically at the transmitter site, the FCC needs to be notified of the remote control location for the station.

EAS still needs to be monitored for the local area served by the station so the station can originate and rebroadcast required EAS tests, and respond in the event of a real emergency. The station still is required to have a chief operator designated in writing, and that operator must routinely review station logs and certify certain operational requirements for the station, including the monitoring of tower lights. A station log needs to be maintained and produced when requested by the FCC – containing information about EAS tests, tower light monitoring, and any deviations in operation of the station from the authorized parameters specified by the station license.

Obviously, stations also need to monitor and respond, if appropriate, to complaints about their operations, particularly technical complaints about the station not operating in compliance with its licensed facilities. And they need to be ready to respond to requests for political advertising time from local candidates, especially Federal candidates, because all commercial stations have an obligation to give Federal candidates reasonable access to all classes and dayparts of time on a station – even if that station has no local studio or local employees.

There are certainly may be other issues that are not on this list. But this list makes clear that a licensee can’t just close its main studio and get rid of all of its local employees and ignore its community. There are still has many FCC obligations that require licensees keep in touch with what is going on at their stations and in their local service areas. So discuss these issues with counsel and engineering consultants to make sure that you won’t miss anything when taking advantage of these rule changes.

Washington Legal Issues for TV Broadcasters – Where Things Stand in the New Year

Delivered... David Oxenford | Scene | Mon 15 Jan 2018 5:44 pm

It’s a new year, and a good time to reflect on where all the Washington issues for TV broadcasters stand at the moment, especially given the rapid pace of change since the new administration took over just about a year ago. While we try on this Blog to write about many of the DC issues for broadcasters, we can’t always address everything that is happening. Every few months, my partner David O’Connor and I update a list of the legal and regulatory issues facing TV broadcasters. That list of issues is published by TVNewsCheck and the latest version, published this week, is available on their website, here. It provides a summary of the status of legal and regulatory issues ranging from the adoption of the ATSC 3.0 standard at one end of the alphabet to White Spaces and Wireless Microphones on the other – with summaries of other issues including the Incentive Auction, Ownership Rule Changes, Media Regulation Modernization, EEO compliance, Political Advertising and Sponsorship Identification, along with dozens of other topics, many with links to our more detailed discussions here on the Blog. Of course, the status of these issues changes almost daily, so watch this Blog and other trade publications for the latest Washington news of interest to broadcasters.

Political Broadcasting and Programmatic Buying – Issues to Consider

Delivered... David Oxenford | Scene | Mon 11 Dec 2017 5:22 pm

The week before last, Bobby Baker, the head of the FCC’s Office of Political Programming and the acknowledged guru on political broadcasting issues, and I conducted a webinar for 20 state broadcast associations discussing the FCC rules regarding political advertising and related issues. We have done this seminar every other year for quite some time to help broadcasters prepare for an upcoming election year. Every time we conduct the session, we are faced with some new questions, usually not because the FCC rules have changed, but instead because new advertising practices have arisen in the industry. This year, one of the issues that prompted a question from the audience dealt with “programmatic advertising” – the question being how advertising bought through various programmatic platforms would play into the political broadcasting analysis that each station must conduct to prepare for the political season (including questions of political rates and access rights that might be affected by programmatic sales).

While most of the principles governing the FCC rules on political broadcasting are relatively established (and many are summarized in our Political Broadcasting Guide available here), new advertising practices and opportunities always raise questions as to how those established rules are to be applied. Programmatic buying of advertising time is one of those areas where these questions have arisen in recent years. In the last few years, programmatic buying has become the buzzword in broadcast advertising circles for both radio and TV. It is intended to make ad buying easier and more akin to the experience that ad buyers have when they place online advertising, allowing most of the buying process to take place from the buyer’s computer, anywhere and at any time, often without directly engaging with a station account rep.

While programmatic buying is becoming more and more common in broadcast circles, it is difficult to easily categorize it and describe how it affects a station’s political broadcasting obligations, as what is called “programmatic buying” comes in so many different flavors. Not only does the concept mean different things on different platforms, it is also being provided by all sorts of different companies, from rep firms, to broadcast technology companies, to companies that specialize in specific types of advertising – like remnant ad sales (i.e. sales of unsold advertising inventory on broadcast stations). And some station owners are signing up with multiple providers – sometimes using these multiple platforms for the sale of advertising at the same station. Depending on how the particular platform works, the effect on the station’s political advertising practices, including the lowest unit rates to be charged by the station for political time in the political windows (45 days before the primary and 60 days before the general election), can vary.

The computerized sale of remnant advertising – where the providers of the programmatic buying give advertisers the opportunity to buy left-over advertising on multiple stations so as to reach a total audience in the market in which the stations operate – is akin to systems developed years ago. We wrote about the FCC’s considerations of such remnant advertising platforms many years ago, here.   The sales of remnant ads packaged with remnant advertising on other stations tend to raise one set of issues. This kind of advertising – sold in packages, where advertisers are offered delivery of a certain number of advertising impressions in a given market, where that delivery comes from placement of ads on multiple stations – may be the least problematic for individual stations in their political broadcasting compliance.

Because the spots are usually packaged with multiple stations to give the advertiser the number of advertising impressions that they seek in a given market or markets, these ads have no impact on the lowest unit rate on any one station (as ads that are sold in a package on multiple stations do not affect the lowest unit rates on any individual station in the package, although such combination packages on multiple stations must be disclosed and made available to candidates by the company making such combination sales). Moreover, as remnant ads can usually run at almost any time in a broadcaster’s schedule (they are usually not run in fixed programs or at specific times), and are usually very preemptible, the ads are usually in advertising classes not very attractive to candidates who want certainty as to when their ads will run, further minimizing their impact on most station’s political broadcasting sales. But sellers of these packages of remnant advertising may themselves be subject to political rules (as the Commission has traditionally applied such rules to “unwired networks”), so the sellers need to be cognizant of their own political broadcasting obligations.

Other forms of programmatic buying can be more significant for political advertising and need to be carefully tracked by broadcasters. Some of the programmatic systems let advertisers use computerized systems to essentially buy any advertising time that is available in a station’s inventory. Advertisers can in effect have access to a station’s traffic system and schedule their own advertising schedules, and can pick and choose among the rates available to advertisers in a station’s traffic systems. It’s this ability to pick and choose what the advertiser wants that could raise political broadcasting issues. If the programmatic deals allow discounts off of a station’s rates for specific classes of time, either simply because they are booked through the programmatic system or because of the volume of spots bought by the advertiser, these discounts could affect the lowest unit rates of the stations in the classes of time bought by the advertiser using the programmatic system.

The ability of any advertiser to get access to the station’s ad schedule to schedule their own ads toward the end of an election season could also affect a station’s ability to squeeze in political ads as necessary to meet reasonable access and equal opportunities obligations. A commercial advertiser using a programmatic platform to place a big advertising buy scheduled to run in the last days before an election could disrupt the ability of a station to make time available to candidates that the station is obligated to provide because of equal opportunity and reasonable access requirements. And, if political advertisers themselves use the programmatic systems to buy and schedule advertising, all sorts of issues could arise, especially to the extent that such ads are bought with higher protection levels where they preempt political ads, or simply because they have other impacts on political schedules that stations need to be tracking.

The contracts and practices of providers of programmatic advertising need to be carefully reviewed to assess the potential for issues to arise in a political broadcasting context. If the programmatic network is used by political and issue advertisers, stations need to be sure that they are getting timely notice of the ad buys, and all the necessary paperwork about the buyer, so that the station can meet its political file obligations. As disclosures of political ad buys often require more information than that is received from the typical ad buyer (especially for third-party political ad buyers from whom information about their principal officer and directors is required, as is the identification of the political issue being addressed), the systems must be able to provide that information.

Generally, programmatic platforms should also be reviewed so that buys made through the system otherwise comply with all other station legal obligations that, once upon a time in the distant past when broadcasters used printed contracts, would have been expressed in the terms and conditions for sales which were often printed on the back of the sales contracts. We have written about the issues that can arise from the demise of the printed advertising contract. See for instance our article, here, where these issues were discussed in the context of the required FCC advertising non-discrimination certification, which also needs to be worked into the programmatic buying process.

We’ve worked with some providers of programmatic systems to help design their systems so that stations that use them can assure that their inventory can be controlled during the election season, and we have looked at agreements from providers for broadcast station clients. These are not simple deals that can be entered into without thought. Any broadcaster using any programmatic buying system needs to carefully review the system that they are using, and determine if there are any potential political broadcasting issues – and to assure that the contracts with the providers give stations the rights that they need to assure compliance with political broadcasting rules (and other FCC obligations).

As these programs and platforms can each pose their own issues, stations should consult with their communications counsel on how any program may impact their political obligations. The FCC’s Office of Political Programming, who gave me their thoughts on these issues as I was writing this article, are also very willing to discuss the issues, and are quite helpful in walking through the implications of any sales platform. Make sure that you understand the implications as you use these programs. This is certainly true for the upcoming busy 2018 election year and, with issue advertising becoming more and more a part of the broadcast landscape even outside of election years, these considerations can arise at any time. So look carefully at the legal issues that can arise from any programmatic ad platform.

FCC Political Broadcasting Rules for Write-In Candidates

Delivered... David Oxenford | Scene | Thu 19 Oct 2017 3:22 pm

In these last few weeks before the many municipal elections that will be occurring in November in states across the country, I have recently received several questions about a broadcaster’s legal obligations toward write-in candidates who want to run advertising on a radio or television station. Under FCC precedent, all legally qualified candidates (including those running for state and local offices, see our article here) must be provided lowest unit rates, equal opportunities to purchase advertising time matching purchases by their opponents and, when they do buy time, the no censorship rules apply to their ads. For Federal candidates, they also have a right of reasonable access. But is a write-in candidate a “legally qualified candidate?” 

In most cases, the question as to whether a candidate is legally qualified is relatively easy.  The station looks at whether the person has the requisite qualifications for the office that they are seeking (age, residency, citizenship, not a felon, etc.), and then looks to see whether they have qualified for a place on the ballot for the upcoming election or primary.  In most cases, qualifying for a place on the ballot is a function of filing certain papers with a state or local election authority, in some places after having received a certain number of signatures on a petition supporting the candidacy.  Once the local election authority receives the papers (and does whatever evaluation may be required to determine if the filer is qualified for a place on the ballot), a person is legally qualified and entitled to all the FCC political broadcasting rights of a candidate: equal opportunities, no censorship, reasonable access if they are Federal candidates, and lowest unit rates during the limited LUC windows (45 days before a primary and 60 days before a general election).  But, for write-in candidates, there are different rules that are applied, as there is no election authority to certify that the requisite papers have been filed for a place on the ballot.  Instead, in these situations, a person claiming to be a candidate must make a “substantial showing” that he or she is a bona fide candidate – that he has been doing all the things that a candidate for election would do. What does that mean?

Section 73.1940(f) of the Commission’s rules sets out what a substantial showing needs to include.  The rule states:

The term substantial showing of a bona fide candidacy as used in paragraphs (b) of this section means evidence that the person claiming to be a candidate has engaged to a substantial degree in activities commonly associated with political campaigning. Such activities normally would include making campaign speeches, distributing campaign literature, issuing press releases, maintaining a campaign committee, and establishing campaign headquarters (even though the headquarters in some instances might be the residence of the candidate or his or her campaign manager). Not all of the listed activities are necessarily required in each case to demonstrate a substantial showing, and there may be activities not listed herein which would contribute to such a showing.

Stations are entitled to ask a purported candidate to make that substantial showing before they accord the candidate all the rights that he or she might be entitled to under the rules.  Stations will looks at factors including whether the candidate has had campaign rallies. Is the candidate making speeches and campaign appearances throughout the area where the election is being held? Is there campaign literature that is being distributed on his or her behalf? Does the candidate have any campaign offices or campaign workers?  Is the campaign more than a website?  A station is entitled to ask for this evidence, and then needs to review the evidence, probably with the aid of counsel and possibly with the informal advice of the FCC (whose Political Broadcasting Office is usually quite helpful in working through issues like this), to determine whether the write-in candidate meets the substantial showing test.

The determination is very fact based. A few years ago, an individual from a fringe group launched a write-in campaign for Congress in a Missouri district where he resided. As he made speeches in the district, had an office there, and put up signs and passed out literature there (and his campaign was covered by the local print publications), many stations deemed him to be a legally qualified candidate and ran his advertising. A few years later, that same individual purportedly launched a campaign for an open US Senate seat in the same state. But that candidate did nothing to show that he was a bona fide state-wide candidate – showing no evidence of a statewide election campaign. Given the different factual circumstance, the Commission informally determined in that case that he was not a bona fide candidate for the Senate as he had not made a substantial showing of his candidacy for the statewide office.

If the candidate does pass the substantial showing test, then all of the political broadcasting rules apply – just as if the candidate had qualified for a place on the ballot. But if the purported candidate has done nothing more than say “I’m a candidate” and then decided to buy advertising time on a broadcast station, it is likely that the station need not sell him or her advertising time. Again, it depends on the facts of the situation, so analyze those facts carefully and discuss these issues with counsel familiar with the precedent in this area. For more information about political broadcasting rules, see our Guide to Political Broadcasting, here.

FCC Releases Draft Order to Abolish Main Studio Rule – To Be Considered at its October 24 Meeting

Delivered... David Oxenford | Scene | Wed 4 Oct 2017 4:40 pm

The FCC yesterday released the agenda for its October 24th Open Meeting, as well as draft orders of the matters to be considered at that meeting. For broadcasters, the single most significant proposal was a draft order (available here) to abolish the requirement that a broadcast station maintain a main studio in close proximity to its city of license that is open to the public and staffed during normal business hours. The FCC’s draft order determines that, in today’s modern world, where much communication with broadcasters is done by phone or electronically, and as stations either have or soon will have their public files available online, there was no longer any need to maintain the rule mandating the main studio. So, if the Commission adopts the draft order at its October 24th meeting, the requirement which has been on the books since 1939 will be eliminated.

Together with the main studio rule, the FCC order would also eliminate the requirement that the station have staff members available at that studio. Instead, the licensee, to maintain contact with their community, must maintain a toll-free number accessible to residents of the station’s city of license. That number must be answered during normal business hours of the station – but the person answering the phone line need not be in the city of license. The FCC urged, but did not require, that the phone line be monitored during other hours as well. The phone line can be shared with multiple stations – so an “800” number available nationwide would seem to meet the requirement.

The FCC also would eliminate local program origination obligations. So station owners need no longer have some physical presence in their community where they can originate programming. The FCC said that technology allows stations to put callers on the air from anywhere, and even to do video through Skype and other similar technology providers. Stations do, however, still need to serve their communities. They still need to maintain Quarterly Issues Programs lists (which, as we wrote here, are due to be placed in a station’s file this quarter by next week). These lists require that the station list the most significant issues facing its community in the past quarter and the programs broadcast by the station addressing each of those issues. Thus, a station will need to continue to monitor, in some way, the issues in their community and broadcast programming addressing those issues – but how they accomplish those requirements, and the location from which they do so, is up to them.

Stations that have fully transitioned to the online public file need no longer keep any physical documents in their communities of license. But stations that have not yet made that transition (with the transition deadline for radio stations in smaller markets, and smaller groups in large markets, being March 1, 2018) must maintain a paper public file in their city of license until all of the documents required to be in the file are transitioned to the online public file. The file must be maintained at a location in their community of license that is open during normal business hours (e.g. a public library or an office for some local business). Small market stations can transition to the online public file now (they need not wait until March 1), so they can eliminate the need to maintain a paper public file in their community if they decide to eliminate their main studio once this rule is adopted and becomes effective.

Note, however, that even for stations that transition to the online public file, there may be some residual paper file obligations. While the FCC eliminated the need to maintain letters from the public, which had to be kept in a paper file, earlier this year (see our article here), for most stations, after March 1 of next year, the only documents not in the online public file will be documents from the political file – as stations need only include in the online public file political documents created after the transition date (see our article here about the new online public file obligations for radio). Older political documents need not be placed in the public file. Those documents need to be kept for 2 years from the date of their creation. For all stations, by March 1, 2020, there should be no need for a physical file at all. For stations that do have “old” political documents, to avoid having to maintain a paper public file in their community, they can upload all old political documents to their online file, even though they are not required to do so.

The rule changes will become effective, if adopted, when they are published in the Federal Register, except for the rules dealing with the public file. Those rules will be effective upon their approval by the Office of Management and Budget under the Paperwork Reduction Act.

If the FCC acts as expected to approve this rule on October 24, many changes in broadcast operations will become permissible. While the changes may allow broadcasters to recognize significant cost savings, we reiterate the FCC’s warning that stations, no matter the physical source from which their programming originates, need to remember that they still have an obligation to serve the interests of their communities. Public interest groups will, no doubt, be watching – so broadcasters beware.

What to Do With the On-Air Employee Who Becomes a Candidate for Elective Office?

Delivered... David Oxenford | Scene | Wed 20 Sep 2017 4:20 pm

It seems like about this time as we begin to near the end of the year that broadcasters contemplate their future. And it seems like that brings many to contemplate moving from behind the microphone to being in front of it – by running for public office. Perhaps because next year will likely be a very active one with Congressional elections and elections in many states, I have had a number of calls from broadcasters in the last few weeks asking what they should do with the on-air employee who is contemplating making that move by jumping into politics. We have written about this issue many times before, including coverage of when well-known local or national personalities have contemplated runs for office – see our stories here, here and here. In 2010, we wrote an article that provided a discussion of this issue, which remains valid today, and which I edited and reposted in 2016 here. An updated version of that article is below.

Having an on-air employee who runs for political office – whether it is a federal, state or local office – does give rise for equal opportunities for competing candidates whenever that employee’s recognizable voice or picture appears on the air, even if the personality never mentions his or her candidacy on the air, and even if they appear in what is otherwise an exempt program (e.g. a newscaster who runs for office triggers equal time when he delivers the news even though a candidate’s appearance as a subject of that news program would be exempt). Stations need to take precautions to avoid the potential for owing significant amounts of free time to competing candidates, where those candidates can present any political message – if they request it within 7 days of the personality’s appearance on the air.

Once a candidate becomes “legally qualified” (i.e. he or she has established their right to a place on the ballot by filing the necessary papers), equal opportunities rights are available to the opposing candidates.  What this means is that, if the on-air broadcaster who is running for political office stays on the air, any opposing candidate can come to the station and demand equal opportunities within seven days of the date on which the on-air announcer/candidate was on the air, and the opponent would be entitled to the same amount of time in which they can broadcast a political message, to be run in the same general time period as the station employee/candidate was on the air.  So if your meteorologist decides to run for the city council, and he appears on the 6 o’clock news for 3 minutes each night doing the weather, an opposing city council candidate can get up to 21 minutes of time (3 minutes for each of the last 7 days), and that opposing candidate does not need to read the weather, but can do a full political message.  So what is a station to do when an on-air employee decides to run for office?

In some cases, stations do nothing, and no one seems to mind.  I’ve known broadcasters who appeared on-air every day, particularly in small towns, while they were serving as mayor or on the city council, and no opposing candidate ever bothered to ask for equal opportunities – either because they did not know the rules, or because they would have received bad publicity forcing the on-air employee/candidate out of his job during the election season.

But sometimes competing candidates do insist on their rights, especially less well-known candidates who may not have any other way to get their message out and want the free time that they can get because of the on-air employee’s appearances.  Thus, many stations play it safe and don’t allow a candidate to continue to stay on the air once they become legally qualified (and sometimes even before they are legally qualified to even avoid the appearance of unfairness).  But there are other alternatives that can be pursued that lie between taking the risk of having to meet equal opportunities claims and taking the employee off the air.  These include:

  • Obtaining waivers from the opponents of the station employee, allowing the employee to continue to do his job, perhaps with conditions such as forbidding any discussions of the political race
  • Allowing the candidate to continue to broadcast in exchange for a negotiated amount of air time for the opponents.

Obviously, consult counsel to get the wording right on any waiver, but waivers are an option.

Another alternative is to give the on-air employee/candidate other duties that don’t trigger equal opportunities.  If the candidate’s voice or likeness does not appear on-air, then there is no equal opportunities right.  Right now, the political rules do not apply to Internet appearances, so website work is a possibility. Also, a move to a sister station with a service area that does not reach the district in which the candidate is running is another alternative.

Finally, remember that equal opportunities are only available to the opponents of the employee-candidate.  In a primary, the opponents are only those candidates who are running for the nomination of the same party.  Thus, if your on-air employee is running in the Republican primary, you only need to worry about his or her Republican opponents for equal time purposes.  The Democrats don’t get equal time until the nominees of each party have been selected.

For more on the political broadcasting rules, check out our Guide to Political Broadcasting, available here.

Washington Issues for TV Broadcasters – Where Things Stand at the FCC

Delivered... David Oxenford | Scene | Mon 11 Sep 2017 5:13 pm

There is never a shortage of Washington issues for broadcasters to consider, and the rapid pace of change since the new administration took over in January has made it even more difficult to track where all the issues stand. While we try on this Blog to write about many of the DC issues for broadcasters, we can’t always address everything that is happening. Every few months, my partner David O’Connor and I update a list of the legal and regulatory issues facing TV broadcasters. That list of issues is published by TVNewsCheck and the latest version, published last week, is available on their website, here. It provides a summary of the status of legal and regulatory issues ranging from the adoption of the ATSC 3.0 standard at one end of the alphabet to White Spaces and Wireless Microphones on the other – with summaries of other issues including the Incentive Auction, EEO compliance, Political Advertising and Sponsorship Identification, along with dozens of other topics, many with links to our more detailed discussions here on the Blog. Of course, these issues change almost daily, so watch this blog and other trade publications for the latest Washington news of interest to broadcasters.

September Regulatory Dates for Broadcasters – Including Reg Fees, Nationwide EAS Test, Must-Carry Letters, Lowest Unit Rate, Translator and Repack Deadlines and GMR License Extension

Delivered... David Oxenford | Scene | Fri 25 Aug 2017 4:27 pm

Summer is coming to an end, but the legal obligations never take a vacation, and September brings another list of regulatory deadlines for broadcasters. While the month is one of those without the usual list of EEO Public File obligations or quarterly FCC filing obligations, there still are a number of other regulatory deadlines for which broadcasters need to be prepared.

For commercial broadcasters, the September date that should be on everyone’s mind is the deadline for the payment of annual regulatory fees. As we wrote here, there is an FCC order circulating among the Commissioners that should be released any day, setting the amounts of the regulatory fees and the deadline for their payment. These fees will almost certainly be due in September, prior to the start of the government’s fiscal year on October 1. So stay alert for the announcement of the window for paying these “reg fees.”

Broadcasters will also be dealing with the Nationwide EAS Test scheduled for September 27, though as we wrote here, it could be pushed back to October if there is a real emergency that is pending near the September 27 deadline. By Monday, stations need to have completed the ETRS Form One to be prepared to report on the results of the test (see our article here).

TV stations’ must-carry and retransmission consent letters must be received by cable or satellite carriers by October 1 of this year – so these letters should be going out by certified mail to MVPDs soon if they have not already been sent. By October 1, copies of the election letters sent to all the MVPDs need to be uploaded to the station’s online public file.

For those stations serving states with off-year elections on November 7 (including governor’s races in New Jersey and Virginia and a host of state and local elections in other states), lowest unit rates go into effect on September 8. As we have written before, candidates for state and local offices do not have reasonable access rights – meaning that they cannot demand access to all classes and dayparts of advertising available on a station. But if a station makes time available to one candidate in a race, it must treat all candidates for the same race equally by making time available to them, and starting on September 8, that time must be sold at lowest unit rates. See our articles here and here on this issue.

We would expect that the next steps in the processing of the FM translator applications filed last month by AM stations will take place in September, with the FCC giving notice of which applications are mutually exclusive (and setting dates for a settlement window when resolutions of any conflicts between such applicants can be negotiated). Notice will also be given as to which applications are “singletons” – or not in conflict with any other applications. Those singleton applications will have to file the remainder of FCC Form 349 and will be subject to petitions to deny before they can be granted. Look for more on the processing of these applications next month. For more information, see our article here.

Other deadlines this month include the end of the first window to file construction permit applications for new facilities by certain TV stations affected by the incentive auction that are not able to build or to replicate their current signals on their new channels assigned by the FCC. Shortly after the September 8 end of this first window, the FCC will announce another window for all other repacked stations to seek improvements in their facilities (see our post here). Watch for those deadlines.

Commercial radio stations will also need to elect whether they want to accept GMR’s offer of an extended interim license to play GMR music through March of next year (see our article here). That election is due by the end of September.

And, as always, watch for other deadlines that may affect your operations. Even in a deregulatory time such as what we seem to be in, there still are many legal and regulatory deadlines and obligations that broadcasters must observe. Make sure you pay attention to the ones that affect your stations.

Complaints Filed Against TV Stations for Public File Violations on Political Issue Ads

Delivered... David Oxenford | Scene | Wed 23 Aug 2017 3:15 pm

Earlier this week, the Campaign Legal Center and Issue One, two political “watchdog” organizations, filed FCC complaints against two Georgia TV stations, alleging violations of the rules that govern the documents that need to be placed into a station’s public inspection file regarding political “issue advertising” (see their press release here, with links to the complaints at the bottom of the release). FCC rules require that stations place into their public files information concerning any advertising dealing with controversial issues of public importance including the list of the sponsoring organization’s chief executive officers or directors. Section 315 of the Communications Act requires that, when those issues are “matters of national importance,” the station must put into their public file additional information similar to the information that they include in their file for candidate ads, including the specifics of the schedule for the ads including price information and an identification of the issue to which the ad is directed. The complaints allege that, while the stations included this additional information in their public file, the form that was in the public file stated that the sponsors of the ads did not consider the issues to be ads that addressed a matter of national importance, despite the fact that they addressed candidates involved in the recent highly contested election for an open Congressional seat in the Atlanta suburbs.

Section 315(e)(1)(b) states that an issue of national importance includes any advertising communicating any message directed to “any election to Federal office.” The stations against which the complaints were filed used the NAB form that asks political and issue advertisers to provide the information necessary for the public file, as do many broadcast stations. The FCC does not require that the NAB form be used but, as it is designed to gather the required information, many stations use it. Some simply take the form and place it into their public file with a copy of their advertising order form specifying the rates and advertising schedule and assume that their FCC obligation is complete. But, here, the complaints allege that the advertisers, in response to a question on the form that asks whether the advertising was directed to an issue of national importance, checked the box that said that the ad was not a Federal issue ad despite the fact that the ad addressed candidates or issues involved in the election for the open Congressional seat. The form was apparently then simply put into the public file in that way without additional notation or correction by the station.

So, basically, the complaints do not appear to allege that the stations failed to put information into their file sufficient for the public to evaluate who was sponsoring the ads, what the sponsors were paying, or how many ads were being run – information only required for Federal issue ads (ads of national importance) and not ads that addressed local issues. Instead, the complaints allege that the stations were in violation of the rules because a box on a form that is not even required by the FCC was checked incorrectly.

These complaints seem to harken back to a set of similar complaints resolved by the FCC last year, admonishing a number of TV stations for not inquiring more when incomplete information was provided by issue advertisers on a political disclosure form (see our article here on that decision). The new Commission, as one of its first acts, rescinded that decision seemingly because it was made by the Media Bureau and not the full Commission (see our article here). Since the rescission, the FCC has not issued further guidance on the issues raised in the complaints. Perhaps these complaints will trigger action on those pending matters from the FCC. But, regardless of the outcome, the complaints teach broadcasters two things – first, they need to be questioning the information provided by issue advertisers on their advertising disclosure forms to make sure that information is accurate and complete, and second, that stations political files are being watched. With the political file being online for all TV stations and for big market radio stations (and, by March 1 of next year, for all radio stations – see our article here), any of these watchdog organizations can scan the public file for inconsistencies and inaccuracies from the privacy of their own home or office, without the station ever knowing. This places a premium on stations being complete and accurate with all of their disclosures.

For more information about political advertising issues, see our Guide to Political Advertising Issues, here.

Modernization of Media Regulation – What Rule Changes Should Broadcasters be Requesting?

Delivered... David Oxenford | Scene | Mon 19 Jun 2017 5:33 pm

It is not every year that the FCC seriously asks broadcasters for suggestions as to what rules it should abolish or modify, but that is exactly what the FCC is doing in its Modernization of Media Regulation proceeding (about which we wrote here and here). Comments due the week after next, on July 5, and broadcasters should accept the invitation and suggest rules that are ripe for repeal or amendment. I recently spoke at the Wisconsin Broadcasters Association’s annual convention and the broadcaster who chaired the association’s Federal legislative committee urged all broadcasters in attendance to register their ideas for reforms. That comment made me realize that many broadcasters may not be taking this invitation seriously.

The number of changes already made in broadcast regulations in the less than 6 months that Chairman Pai has headed the agency (e.g. reinstating the UHF discount, abolishing the requirements for letters from the public in the public file, allowing online recruitment to be the sole means of EEO wide dissemination of job openings, relaxing the location restrictions on FM translators for AM stations, relaxing the limitations on noncommercial fundraising, abolishing the obligation for noncommercial stations to report the social security numbers of their board members, the rescission of FCC enforcement actions for political violations, and the revocation of a policy statement against shared services agreements) demonstrate that this Commission is serious about deregulation. There has perhaps never been as real an opportunity as now to make your voice heard about the broadcast rules that should be relaxed as part of this proceeding. What rules should be examined by the FCC?

The proceeding does not cover multiple ownership rules, which are being considered in multiple other proceedings (see, e.g. our article on the UHF discount and our articles here and here on other ownership issues being considered). But that still leaves a plethora of broadcast rules that could be eliminated or trimmed. Some have suggested further reductions in EEO obligations (see our article here about some of the remaining obligations under those rules). Related rules requiring advertising nondiscrimination and nondiscrimination in the sale of broadcast stations have never resulted in any enforcement action by the FCC, and I find that their intent and meaning are not uniformly understood by either the regulated or the regulates. They might be ripe for action.

Some have suggested Children’s Television rules or rules mandating certain accessibility obligations could be paired back. Many of these obligations are imposed by statute, so the FCC cannot totally eliminate the obligations, but some interpretations as to how the statutes are implemented could be addressed by FCC action. Political broadcasting rules are in the same category – mandated by statute, so the FCC is limited in what they can do to change those rules.

There are lots of old policies that are on the books, often not addressed by statute or rule. For instance, the FCC has had a policy against the sale of a “bare license,” meaning that a seller of a station needs to be able to convey some identifiable other assets when selling a station. In many ways, the FCC has seemed to have moved away from that policy (for instance, by allowing the sale for profit of an unbuilt construction permit), but it has never officially reputed the policy. This might be a time to do so. Similarly, the FCC has a policy against taking a security interest in a broadcast license, which some have suggested scares away certain lenders who might otherwise be interested in providing financing for broadcast deals. From time to time in the past, attempts have been made to eliminate that policy. Perhaps this is the time to address this issue, too.

On the engineering side of things, the FCC’s rural radio policy seems to be one that prevents stations from making changes that could improve coverage and bring more competition into markets where the most people live. But that has been hindered by a policy preserving program choice in rural markets where it may not be economically supportable. Some FCC environmental requirements might also be ripe for review. Many other technical reporting and recordkeeping rules are also likely to be up for review.

But, before the FCC can make any such changes, someone needs to ask to alert the Commission of the need for change. Given the invitation to broadcasters to suggest rules that can be changed, and the deadline on July 5, this is your opportunity to be heard. Think about regulatory issues that your station has faced, and where rules make little sense in today’s competitive media marketplace, and make your suggestions by July 5.

Reminder – FCC Political Rules Apply to Off-Year Elections for Vacant Congressional Seats, and for State and Local Offices

Delivered... David Oxenford | Scene | Thu 4 May 2017 3:25 pm

In odd years like 2017, most broadcasting stations don’t think about the FCC’s political broadcasting rules. But they should – both for special elections to fill open seats in Congress, and for state and local political offices.  Recently, I have received a number of calls about elections to fill seats in Congress that were vacated by Congressmen appointed to positions in the Trump administration. For instance, the race in Georgia to fill HHS Secretary Tom Price’s seat has received much national attention. But there is also a race being fought now to fill Interior Secretary Ryan Zinke’s seat in Montana. Obviously, for Federal elections like these, broadcast stations serving these districts need to offer candidates the full panoply of candidate rights – including reasonable access, lowest unit rates, and equal opportunities. But in other parts of the country where there are no special Congressional elections, there are all sorts of political races taking place in this off year and, as we have written before, most of the political rules apply to these state and local electoral races as well as to the few Federal elections that are taking place to fill open Congressional seats.

Some of these races will be high-profile, like the governor’s elections in Virginia and New Jersey and several big-city mayoral races. Some races may be much more locally focused on elections to school boards or town councils. Stations need to be prepared. Candidates for state and local elections are entitled to virtually all of the political broadcasting rights of Federal candidates – with one exception, the right of reasonable access which is reserved solely for Federal candidates. That means that only Federal candidates have the right to demand access to all classes and dayparts of advertising time that a broadcast station has to sell. As we wrote in our summary of reasonable access, here, that does not mean that Federal candidates can demand as much time as they want, only that stations must sell them a reasonable amount of advertising during the various classes of advertising time sold on the station. For state and local candidates, on the other hand, stations don’t need to sell the candidates any advertising time at all. But, if they do, the other political rules apply

That means that if a broadcast station decides to sell advertising time to one candidate in a state or local political race, they must sell it to all candidates for the same race – and be prepared to make available equal amounts of time in equivalent time periods. Stations can decide to make available advertising only in certain dayparts (or on certain stations in a cluster) to state and local races, and can even make different dayparts (or stations) available for different political races, as long as all candidates for the same race are treated the same. So, for instance, a station could decide to offer only spots during weekend and overnight time periods to candidates for the city council, while offering candidate for governor time during all dayparts. They just need to treat all candidates (including independent and fringe party candidates) for the same state or local race in the same way.

If the time is sold to state and local candidates during the 45 days before a primary, or the 60 days before the general election, the time must be sold to the candidate at lowest unit rates. See our summaries of the rules relating to equal time here, and to lowest unit charges here. Similarly, if a station air personality decides to run for state and local office (anything from the school board or local planning commission to governor or state legislature), the station needs to consider whether to take that personality off the air, or risk having to provide equal time to all competing applicants – for free – in amounts equivalent to the amount of time that the employee-candidate appeared on the air, even if the employee never mentions his or her candidacy at all. See our article about this choice here.

For more about the political rules, see our Broadcaster’s Guide to Political Broadcasting here. Don’t forget about these political advertising rules – even though this is an odd numbered year!


What’s Up for Broadcasters in Washington Under the New Administration – A Look Ahead at TV and Radio FCC Issues for the Rest of 2017

Delivered... David Oxenford | Scene | Wed 15 Feb 2017 10:51 pm

A new President and a new Chair of the FCC have already demonstrated that change is in the air in Washington. Already we’ve seen Chairman Pai lead the FCC to abolish the requirement that broadcasters maintain letters from the public about station operations in their public file (which will take effect once the Paperwork Reduction Act analysis is finalized), revoke the Media Bureau guidance that had limited Shared Services Agreements in connection with the sales of television stations, and rescind for further consideration FCC decisions about the reporting of those with attributable interests in noncommercial broadcast stations and the admonitions given to TV stations for violations of the obligation for reporting the issues discussed in, and sponsors of, political ads (see our article here). Also on the table for consideration next week are orders that have already been released for public review on expanding the use of FM translators for AM stations and proposing rules for the roll-out of the new ATSC 3.0 standard for television. Plus, the television incentive auction moves toward its conclusion in the repacking of the television spectrum to clear space for new wireless users. Plenty of action in just over 3 weeks.

But there are many other broadcast issues that are unresolved to one degree or another – and potentially new issues ready to be discussed by the FCC this year. We usually dust off the crystal ball and make predictions about the legal issues that will impact the business of broadcasters earlier in the year, but we have waited this year to get a taste for the changes in store from the new administration. So we’ll try to look at the issues that are on the table in Washington that could affect broadcasters, and make some general assessments on the likelihood that they will be addressed this year. While we try to look ahead to identify the issues that are on the agenda of the FCC, there are always surprises as the regulators come up with issues that we did not anticipate. With this being the first year of a new administration that promises a different approach to regulation generally, what lies ahead is particularly hard to predict.

But, we’ll nevertheless give it a try – trying to guess the issues that we will likely be covering on the Blog and dealing with on behalf of our clients this year. We’ll start today with issues likely to be considered by the FCC, and we’ll write later about issues that may arise on Capitol Hill and elsewhere in the maze of government agencies and courts who deal with media issues.  For information about standard filing dates for broadcasters, see our calendar of regulatory deadlines for broadcasters published last month.

So here are some issues that are on the table at the FCC. The aftermath of the TV incentive auction may well suck up much of the attention, especially in the first half of the year, and we’ll write about that separately. But there are many other issues to consider. We’ll start below with issues affecting all stations, and then move on to TV and radio issues in separate sections below.

General Broadcast Issues

Issues likely to be considered this year that could affect both radio and television broadcasters, include:

Multiple Ownership Rules Review: Last year, the FCC addressed its long outstanding Quadrennial Review of the broadcast multiple ownership rules by declining to make any changes in its ownership rules except to effectively ban new Joint Sales Agreements in television except between two stations that can be commonly owned under the multiple ownership rules, and requiring more reporting on various forms of shared services agreements (see our articles here and here). Despite calls for reform and relaxation of the rules, no changes were made in the local TV ownership rules nor in the ban on the cross-ownership of newspapers and broadcast stations. Both of the Republican Commissioners dissented from that decision, suggesting that times had changed and the rules needed to adapt.

Now those same Republicans are in the majority at the FCC, and broadcasters are expecting things to change. Already, petitions for reconsideration of this decision have been put on public notice for comment, with comments by broadcasters and newspaper companies supporting reconsideration, and public interest groups and some cable associations (with respect to loosening of the local television ownership rules) questioning the need for changes in the rules adopted last year. Issues to be considered on reconsideration include revisions to the local ownership limits for TV (including loosening or abolishing the ownership caps for TV stations in individual markets), elimination of the newspaper-broadcast cross-ownership rule, and elimination of the FCC’s recordkeeping requirements for stations operating with Shared Services Agreements. For radio, a request is on file to change the Commission’s treatment of the ownership attribution of stations in embedded markets. We would expect FCC action this year on these proposals (any appeals of which would likely be consolidated with appeals of last year’s decision which are pending in the US Court of Appeals).

Also under consideration is whether the FCC should continue to apply “the UHF discount” in assessing compliance with national ownership caps for TV, an issue which is discussed in more detail in the Television section, below.

In short, given the past statements of the two Republican commissioners who now form the majority at the FCC, expect to see deregulation in these ownership rules. Fast consideration can be given to those issues that are already before the FCC on reconsideration. It may be a longer time before we see other changes, e.g. changes in the local radio ownership rules, But we expect change are coming.

General Regulatory Underbrush: The new Administration, and both of the Republican commissioners, have indicated a real interest in doing away with rules with little real public interest benefit that require the time and resources of broadcasters to achieve regulatory compliance. We would expect action in this area this year, with new proposals being advanced to cut down on the regulatory burden of broadcasters and other FCC regulates. Already eliminated is the requirement that broadcasters retain letters from the public about station operations – the last vestige the paper public file for many stations. Some broadcasters suggest that the FCC go even further and reduce other public file requirements. When the file was on paper and stored at the station (as it still is for many radio licensees), broadcasters were almost unanimous in stating that the file was virtually never visited – except perhaps when a competitor sought to stir up trouble, or when a local university broadcasting professor assigned a class project requiring students to visit stations and ask to view their public files. Now that these are online and hosted by the FCC, viewership statistics for these files might be very illuminating to see just how often they are visited by the public.

The main studio rules themselves are viewed by some as being an anachronism by many broadcasters. Over the years, the FCC has eliminated rules that require specific amounts of programming originated from main studios. Now that the public file has gone online, all of the theoretical reasons for mandating access to the studio has disappeared. While it may still be important that local residents be able to communicate with their local stations to report matters of public interest and to comment on station operations, do these matters really require a local main studio manned during all business hours? As much communication already takes place by electronic means, and face-to-face meetings can easily be set up by making appointments, the costs of manning a main studio could be eliminated. Especially given the security concerns noted in the proposals on the elimination of the paper public file, we would expect the FCC to review the main studio rule, and perhaps many other rules, in the near term. Many other similar areas may be ripe for review in the coming months as well as the FCC looks to abolish unnecessary regulation.

EEO Rules: One of those other areas ripe for the review that take up significant amounts of broadcaster’s time and resources is EEO. There are fundamental issues about the FCC’s EEO policies that have not been addressed in the 12 years since these rules were first adopted. Already teed up to the Commission is a proposal that would make the EEO rules comport with today’s business reality by allowing required EEO recruiting outreach to be conducted solely through online sources, a reversal of the position taken in several recent cases (see our post here). As Commissioner O’Rielly has been a big proponent of online recruiting (see our article here), we would not be surprised to see this proposal to move quickly through the FCC.

One question that has arisen since the election is whether EEO reform should go even further. The new administration has floated ideas about transferring FCC oversight of certain activities from the Commission to other agencies specialized in handling such issues. Some broadcasters have noted that the EEOC and state employment agencies are charged with overseeing all employers to assure that they do not discriminate in hiring. Is there really a need for the FCC to impose additional EEO burdens on broadcasters on top of the paramount requirement that they don’t discriminate? At the same time, many equal employment advocacy groups argue that these rules are still important, and even that they should be more stringent in certain areas. Time will tell whether the FCC takes further steps to review the regulatory burdens on broadcasters in this area, but we would expect that the issue will be raised with the FCC.

FCC Reform. While Congress is considering its own proposals for regulatory reform of the FCC, one issue that has been mentioned in many articles on the new administration has been the proposal to reduce the scope of the issues considered by the agency – leaving many issues to other agencies with more expertise. Leaving merger review to antitrust authorities, leaving sponsorship and contest issues to the FTC, and moving authority for EEO to the EEOC and state employment agencies would be some examples of where power could be devolved from the FCC. Will it? It certainly would be a process that would take more time than many of the other changes mentioned in these pages so it will be something to watch.

Political Rules: We just saw the new FCC rescind the decision of the old one – a decision which had attempted to clarify its political disclosure rules by requiring broadcasters disclose in their public files a list of all issues addressed by any political ad, and all executive officers or directors of third-party groups buying political advertising time. The decision was rescinded, but the issues remain pending. The two Republican commissioners expressed concern that they had not approved the final decision in these cases. Some clarification of this decision is likely, if only to address whether, in candidate ads, stations really need to look at each candidate ad and identify all of the specific issues addressed. Look for further action on these issues to come quickly.

While there have been calls for even more disclosure since the Supreme Court’s Citizens United case allowed for more significant political spending on broadcast commercials by corporations and other third-party organizations, that traditionally has not been an issue that the current majority political party has wanted to tackle. Another area that loomed large with the last administration was in the area of sponsorship identification. We saw the FCC impose a large sanction – $540,000 – on a radio operator for not fully identifying the sponsor of an issue ad. Plus there are complaints pending against many TV stations for not identifying the “true” sponsor of a PAC ads, where the PAC was principally funded by a single individual. We are still looking at other outstanding issues pending before the FCC from previous elections – including appeals of the decision of the FCC, issued just before the 2012 Presidential election, holding that TV stations have to give candidates equal access to certain single-issue candidates – even though such candidates are qualified only in the distant reaches of the station’s coverage area, and even when such candidates are “running” for office not with any expectation that they will be elected, but instead simply so that they can get access to television stations to run some controversial commercials not primarily intended to promote their candidacy, but instead to promote their position on some other issue. The FCC also asked about the “last in, first out” policies that some stations use to determine which ads to preempt when they have too many preemptible ads, and whether such policies, when applied to political candidates, are an issue.   While these questions are outstanding, they would not seem like high priority issues for this new administration, so we’ll have to see if they are even addressed in the coming year. Given that this is an off-year in the election calendar, perhaps it would be a good time for all sorts of political broadcasting issues to be tackled by the FCC, but we are not sure if it will be a priority.

Foreign Ownership of Broadcast Stations.  In late 2013, the FCC issued a statement clarifying its policies on the foreign ownership of broadcast licensees, making clear that what was thought to be an absolute prohibition on the ownership of more than 25% of the stock of the parent company of a licensee by non-US citizens was in fact only a guideline that could be exceeded if proposed greater foreign ownership of a station would not adversely affect the public interest.  While many thought that this would bring an influx of foreign investors to the US broadcast marketplace, the first company to file an application seeking FCC consent under this new policy was Pandora, and not because it believed that its foreign ownership exceeded 25%, but instead because, as a public company, they could not absolutely prove the citizenship of all of their shareholders using standards that the FCC adopted in the 1970s, long before many of the current ways of trading public securities came into being.  Last year, the FCC simplified rules for public companies to assess their foreign ownership, and early this year approved two transactions involving Spanish-language broadcasters allowing foreign ownership to exceed 25%, and this week approved another application allowing a Cayman Islands-based company to increase its investment in Pandora. Still pending, however, is a case where foreign owners seek to acquire 100% of a radio company, as well as other cases involving other foreign ownership combinations in excess of 25%. While the Republican Commissioners were fully supportive of the liberalization of the foreign ownership rules that have occurred thus far, we wonder if the political rhetoric about foreign trade will inhibit the FCC from taking the next step to approve 100% foreign ownership of a broadcast station. Given the number of pending cases, some indication should come relatively soon (or if they are not approved in the next few months, that alone may provide some indication there as to the new administration’s view on these issues).

Indecency: After the Supreme Court decision in June 2012, upholding the FCC’s right to regulate indecency but questioning the current procedure for doing so, the FCC’s regulation of indecency has been up in the air. In 2013, the FCC took public comments asking how it should proceed in this area, suggesting that it reserve enforcement actions for egregious violations – and asking for comments on how such complaints should be identified.  While 2015 brought a $325,000 fine for a violation of the indecency rules (the first fine of that magnitude issued by the FCC), in general, the FCC has been quiet in enforcing its indecency rules since the Supreme Court decision. As the FCC’s 2013 proposals drew many agitated comments and prompted much media attention, we question whether a clarification of these long-ambiguous rules will be in the cards in the first year of this new administration.

Public Interest Programming Reports: In a proposal released in 2011, the FCC issued a Notice of Inquiry to look at the adoption of a new form on which broadcasters would report the public interest programming that they do. This form would replace the Quarterly Issues Programs list, and the Form 355 adopted in 8 years ago for television but never implemented. The proposal was simply a Notice of Inquiry, meaning that the FCC would need to adopt a Notice of Proposed Rulemaking to move further on this proposal. We have not heard much about the status of this proposal lately.  As no Notice of Proposed Rulemaking has yet to be released, before any new rules were adopted a whole new set of comments would need to be received. Given the inclinations of the current majority of Commissioners, we would not expect any action on this matter this year (except to, perhaps, close the book on the proposal).

Television Issues

The Incentive Auction has been the dominant concern for TV broadcasters for several years now, and, barring any last minute glitches, this will be the year that it concludes. The Reverse Auction is now closed, and the Forward Auction only has to finalize the allocation of particular channels to winning bidders to close the book on the auction itself, a process that the FCC has said will conclude by the end of March. But then will come reality – the repacking of the remaining TV stations into a much smaller TV band during a 39 month transition period. This smaller band, until the next generation of digital television through ATSC 3.0 becomes a reality, will have less room for new television stations, and may result in the loss of some LPTV and TV translator operators.

While the repacking will be the center of attention for many television stations, there are many other issues before the Commission that could also have a significant impact on the operation of the remaining TV stations.  But there are perhaps not as many issues as in years past, as the FCC concluded the proceeding last year dealing with the relationship between television and MVPDs, and also seemingly decided to not pursue any expansion in the definition of an MVPD to include online video providers. So what is left for TV stations to deal with this year? The two big issues are likely to be the review of last year’s decision on the UHF discount and how it is applied for multiple ownership purposes, and implementation of ATSC 3.0. Review of local TV ownership rules and the treatment of Joint Sales Agreements are also likely on the table for FCC consideration this year. Specific issues for TV include:

UHF Discount:  Last year, the FCC voted 3 to 2 to eliminate the UHF Discount which counts a UHF station as reaching only half of a TV market’s population in assessing a television company’s compliance with the current rules that limit any company to at most stations reaching 39% of the US TV households.  The FCC had concluded that the digital conversion made the discount counterproductive as UHF stations have better coverage in a digital world, instead of suffering from the coverage issues that they faced in analog TV at the time that the rule was adopted.  The Republican Commissioners, who are now in the majority at the FCC, have suggested that the rule should not have been repealed without Congressional authorization, and that any review needs to be tied into a review of the local TV ownership rules. As the local TV rules are now themselves subject to review (as described below), and a petition for reconsideration of the abolition of the UHF discount has already been published in the Federal Register, received comments pursuant to that notice and is now ripe for action, we would look for some reexamination of last year’s decision at some point relatively early this year.

Local TV Ownership Rules: Last year’s FCC ownership decision did not seriously review the local TV ownership rules. Many TV station owners argue that these rules are outdated.  In a multichannel universe, most households have access to dozens, sometime hundreds of nationwide or worldwide networks; many of the most watched channels are commonly owned with no harm to the public. Yet the FCC’s local television ownership rules prohibit the combination of two local stations in all but the largest TV markets (those that will have 8 independent broadcast television owners after the combination) and prohibit the combination of two top-4 stations in any market. As then-Commissioner (now Chairman) Pai once noted, the FCC will allow Charter and Time Warner Cable to combine, but won’t let two TV stations in a small market merge. Moreover, especially in small markets, where the operational costs of running a TV station with local programming is not much different than the costs in large markets but the potential economic return is vastly smaller, having multiple commonly owned stations may be the only way to insure that a market has multiple over-the-air programming options.   While a year ago, reform of these rules may have seemed far-fetched, today they seem very possible.

ATSC 3.0: A year ago, ATSC 3.0 was not even on our list of issues for the coming year. Today, it looks like it could become a reality this year. At next week’s FCC meeting, we are going to see a decision starting the formal rulemaking to adopt technical standards for the voluntary new transmission standard, and looking to set the rules of the road for that conversion. Given the promises of the new standard’s ability to integrate into today’s online digital media world while transmitting multiple programming steams and all sorts of IP-compatible data, many broadcasters see their economic future tied up in the new standard. Given the need to re-engineer so many TV stations as part of the incentive auction repack, this seems to be the time to adopt and implement the new standard – so watch for quick action on the rulemaking that is being put forward by the FCC.

Accessibility: In the last few years, many new rules on making video programming accessible to hearing or visually impaired viewers have come into effect. These include rules mandating the quality of closed captioning, the captioning of online video clips, and rules about making available audio versions on TV stations’ SAP channels of emergency warnings carried in crawls and otherwise visually presented during entertainment programming. The latter issue is still not totally resolved, as there is no technical methodology for easily converting visual images (such as weather maps) into speech for broadcast on the SAP channel (see our post here). Also pending is the resolution of remaining issues relating to the repurposing of captioned broadcast video onto the Internet.  The FCC left open certain issues about the new captioning requirements for video clips – including whether to require that they be captioned when used on third-party websites, and how to deal with “mash-ups” of video clips taken from TV programs with video that comes from other sources.  These issues have not been ones of partisan contention in the past, but whether they will be a high priority for the new Commission remains to be seen.

Radio Issues

Many of the issues for radio are occurring outside the jurisdiction of the FCC, as they deal with copyright issues – especially in the area of music licensing. These issues are considered in Congress and in the Courts, and we will discuss them in a separate article. Other issues affecting radio – like EEO and other possible FCC deregulatory actions, were discussed above in the section on issues affecting all stations though, in many cases, they may affect radio operators more directly than other services. But there are some other radio-specific issues that the FCC will likely consider this year. These include:

AM Radio:  Late in 2015, the FCC finally took its first steps to help revitalize AM radio.  The first effort to assist AM owners began last year, when the window for filing to move FM translators as much as 250 miles to serve an AM station opened. Hundreds of FM translators around the country were moved to serve AM stations. At the FCC meeting next week, we expect the FCC to adopt the order that it put out for public review last month, allowing greater latitude for the location of FM translators for AM stations.

But issues still remain. The FCC has promised to open another window this year, where AM stations that could not buy translators during last year’s windows can file for new translators to rebroadcast their AMs, if there are frequencies available in their community. Other fundamental AM issues, like lessening protections of clear channel stations or, more dramatically, moving to a fully digitized transmission system, are contentious and a resolution seems far off. Chairman Pai has been a big proponent of the rescue of AM, so look for some attention to these issues in the coming year as the Chairman spearheads efforts to find solutions to these difficult issues.

FM Translator Issues: Believe it or not there are still FM translator applications left from the 2003 FM translator window that have not been disposed of. While most of the mutually exclusive applications settled, and thousands of new FM translators from that window were granted in 2013 (see our articles here and here), there are still applications that are mutually exclusive that remain to be processed.  Look for an auction for these final applications to be announced after the incentive auction has been completed.

Local Radio Ownership Rules: While review of the local TV ownership rules is an issue pending before the FCC right now in petitions for reconsideration of the FCC decision on those rules from last year, review of the radio rules (except for the limited issue of how these rules are applied in embedded markets) is not directly on the table. Yet, more and more, broadcasters are talking about whether those rules need to be examined. The issue of whether the sub-caps still make sense, limiting the number of AM or FM stations that one owner can hold in a given market, will be an issue that will be debated more and more in the coming year. While a broadcaster can own up to 8 stations in the biggest markets (those with at least 45 radio signals), they are limited to owning only 5 FM stations. As the audio marketplace is no longer one where radio dominates as it once did in the past, and as the competition only seems likely to increase as the connected car becomes more common, it seems like it is time for these rules to be re-examined.

Other Technical Rules: While not specifically teed up for consideration, we would not be surprised if the FCC looks at other technical rules that have posed issues for radio broadcasters in the past. One area of concern has been the rural radio rules that have restricted the movement of stations to areas where they can serve the most people. Could this policy be up for review? Are there other processing issues that have slowed the provision of service and the highest and best uses of radio facilities? Broadcasters have an FCC that seems much more receptive to business concerns. Thus, we would expect that there will be more proposals that are brought forward in the coming months to lessen the regulatory burden on broadcasters, and to create more opportunities for them to thrive in the coming years.


These are but some of the legal and regulatory issues that will be facing broadcasters in the upcoming year. There are many other issues that can pop up at any time – especially in the unpredictable atmosphere of a new administration. And there are many issues in Congress or at other agencies that could affect broadcasters.  We will write about those issues in other articles in the near future.  But, just from the list here, you can see that there is plenty of change on the regulatory horizon for broadcasters likely for 2017 – probably more than we’ve seen in decades.  So pay attention as the issues arise – as, in the coming months, there may be many business opportunities that arise from regulatory changes. Be ready to take advantage of them!

Undoing the Past – New FCC Rescinds Rulings on Noncommercial Ownership Reports, Political Broadcasting Sponsorship Disclosure and Shared Services Agreements

Delivered... David Oxenford | Scene | Sun 5 Feb 2017 6:17 pm

With the change in administration at the FCC, there are opportunities for certain actions to be taken very quickly, without going through the full process of a rulemaking requiring public notice of the proposed rule change and time for public comment.  At the end of this last week, we saw the FCC’s Media Bureau take actions in three different proceedings directly applicable to broadcasters to undo what had been done during the prior administration – rescinding actions with respect to noncommercial ownership reports, the disclosure of information about the sponsor of political advertisements, and on the treatment of TV assignment and transfer applications for television stations where shared service agreements are involved.  Below, we’ll give a few details about each of those actions.

Two of the rescinded actions were January rulings by the Media Bureau which, at the time they were issued, drew statements of concern from then-Commissioners Pai and O’Rielly.  The Republican Commissioners argued that the actions should have been taken by the full Commission, not the Media Bureau.  As these decisions were not final (appeals can be taken or reconsideration requests can be filed within 30 days of an action, and the full Commission, on its own, can set aside a staff action within 40 days), the Media Bureau, presumably at the urging of the new Chairman, set these actions aside for further consideration by the full Commission.

The first action set aside on Thursday evening was the denial of reconsideration of the requirement that every individual who is deemed to hold an attributable interest in a noncommercial broadcast station licensee get an FRN – an FCC identification number that requires the submission of a Social Security Number to the FCC (the rule does provide an alternative to the FRN which also requires the submission of significant personal information).  As we wrote here, in early January, the Media Bureau denied a request for reconsideration of these new ownership requirements (even though the reconsideration request was filed with the full Commission) – finding that the appeals raised no new issues and thus could be summarily rejected by the Media Bureau.  Noncommercial licensees had objected to these requirements as they could be seen as invasive by Board members of public institutions that hold FCC licenses – especially by Board members at state universities.  The requirements could require that licensees gather this information from state governors or other prominent citizens who are on university boards – even though these Board members have little or no direct contact with the stations themselves.  Both Republican Commissioners objected to the Bureau’s dismissal of the reconsideration request (both indicating that the information gathering was unnecessary, and that they would review the matter once they became the majority), and a bill was even introduced in Congress to overturn the requirement (see our article here).  While the order on Thursday simply overturns the Media Bureau decision denying reconsideration of the order, meaning the original order itself still stands, we would certainly expect that the reconsideration petition will now be reviewed by the Commissioners and, given the prior statements of the now-majority Republican Commissioners, will likely not be long for this world, and may well be acted on before the Biennial Ownership Reports requiring this information are due on December 1.

The second area for rescission dealt with January orders by the Media Bureau issuing admonitions to numerous TV licensees for purported violations of the FCC’s public file rules for political and issue ads.  We wrote about those decisions here.   The Media Bureau admonished numerous stations for not identifying in their public files all issues mentioned in political ads, and not inquiring about the full list of executive officers or directors of the sponsor (information also required to be in the public file).  While the Republican Commissioners had indicated that they thought that they could have reached an agreement on the issues addressed in these cases, their belief was that the issues should have been tackled by the Commissioners, not by the Media Bureau.  By rescinding the Media Bureau orders, that is apparently what will happen with these issues now.

The final broadcast issue that was undone on Friday was a Media Bureau policy statement, which we wrote about here and here, issued in 2014, that set processing standards for television acquisitions that included stations involved in any sort of sharing agreement with other local stations, including any form of Shared Service Agreement.  These standards were adopted by the Media Bureau and had the effect of prohibiting certain Shared Services Agreements, even though the Commissioners themselves had not determined what was permitted and what was forbidden.  In fact, even in the 2016 ownership decision, the Commission still did not adopt any blanket prohibition against any type of Shared Service Agreement – instead deciding to further study those agreements (and to require the filing of such agreements, an obligation that the NAB has asked the FCC to reconsider).  As the 2014 processing standards were adopted by the Media Bureau without Commission vote, and were merely processing standards not rules, the new administration apparently concluded that they could be rescinded in the same way that they had been adopted – by the Bureau with no public input.

These actions make clear that things are moving fast at the new FCC.  We’ll be watching to see what is next.

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