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


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.

Conclusion

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.

FCC Clarifies Public File Obligations for Identifying Issues and Sponsors for Political Ads – Admonishes Numerous TV Stations for Violations

Delivered... David Oxenford | Scene | Tue 10 Jan 2017 5:47 am

Late Friday, the FCC’s Media Bureau issued an order (at this time available in Word format only, here) clarifying its public file rules for political ads – both ads from candidates and from third-party groups.  The FCC’s clarifications require broadcasters who run candidate or issue advertising to include information about not only the candidates mentioned in an ad, but also any Federal issues that the ad addresses.  On sponsorship identification, the FCC focused on third-party ads, requiring that broadcasters make an inquiry as to the complete set of executive officers or the complete board of directors of any sponsor.  The FCC went on to admonish a number of stations for violating the rules but, as the rules were just clarified, only admonished these stations rather than issuing any fines. This decision was in response to complaints filed by the Campaign Legal Center and the Sunlight Foundation alleging the public file omissions of these stations – complaints that we wrote about here.

The FCC’s order interprets Section 315(e) of the Communications Act, which sets the rules for the disclosures required for political ads.  Under that Section, any political ad that deals with a legally qualified candidate, an election for a Federal office, or with any political issue of national importance, must disclose a variety of information.  That information requires that, in connection with any request for political time, the station must disclose in its public file (1) whether or not the request was accepted, (2) the class of time purchased, (3) the price at which it was sold, (4) the name of the candidate that the ad addresses or the election to which it is directed or the issue discussed, (5) if the ad was bought by a candidate’s authorized committee, the name of the committee and its treasurer, and (6) if the ad was not placed by a candidate’s committee, the name of the sponsor and, where the sponsor is not an individual, the name of the sponsor’s chief executive officers or its executive committee or its board of directors, plus the name, phone number and address of a contact person at the committee.  These requirements were clarified in several respects by the FCC’s order.

The specific areas dealt with by the clarifications were as follows:

  • The order required broadcasters to identify in its public file disclosure every issue and candidate that is addressed by an ad – the identification can’t just stop by naming the candidate or the principal issue addressed. The FCC rejected claims that this would be too much work for broadcasters saying that the spots are usually 30 seconds, and sometimes 60 seconds long, so that it should not take a broadcaster that much time to note all of the issues and candidates addressed.
  • The order made clear that the statute and rules require that licensees must disclose all of the chief executive officers or members of the executive committee or board of directors of any person seeking to purchase broadcast time. In cases where a station initially is given the name of a single official of a sponsoring entity, or where the station otherwise has a reasonable basis for believing that the information initially provided is incomplete or inaccurate, the station is obligated to inquire whether there are any other officers or members of the executive committee or of the board of directors of such entity.  When a sponsor fills out the station’s disclosure forms, or otherwise tells the station the name of only a single individual when asked for its chief executive officers or directors, the broadcaster must ask if that is really a complete list of the officers and, if assured that it is, seemingly need investigate no further.
  • The Commission made clear that a broadcast message must be “political” in nature and must be of “national importance” to trigger a licensee’s record-keeping obligations under the statute – giving the example of a car dealer who mentions in an ad that it is having an election day sale is not political in nature even though it mentions the election. The Commission did go on to say, however, that the issue need not be one that is currently encompassed in pending legislation to be considered a “national legislative issue of public importance.”  This term also encompasses other political issues that are the subject of continuing controversy or discussion at the national level – issues like the national debt, defense and abortion rights being the kinds of issues that are almost always subjects of national importance even if not in specific legislation at the time that the ad runs.

The requirement that a station include in its public file disclosures every issue and candidate that is addressed by a political ad seems to be the one most likely to cause stations the most problems.  One can easily think of some of the recent attack ads from the last Presidential campaign to recognize that one ad – even if it is only 30 or 60 seconds long – can easily require a laundry list of disclosures.  For instance, some ads from Republican groups attacking Hilary Clinton presumably would have required disclosures of issues including preserving government secrets (in connection with the alleged breach of security protocols by the private server), national security (in connection with attacks about Benghazi and the growth of ISIS), Supreme Court nominations and the abortion debate (given the open seat on the Court) and probably many other issues – as well as disclosing that the ad targeted the candidate and the race for President.  Similar lists can result from many other ads – and the sponsors may well be unwilling or untrustworthy about providing a complete list.  The Media Bureau made clear that it is the station’s obligation to make sure that issues are accurately identified for each political commercial.

The clarification about the context of the ad is important too.  While the FCC staff gave the one example of the car dealer having an election day sale would clearly not be a political ad based on its context, there were a number of other examples where the context cut the other direction.  This would include the ubiquitous ads that talk about some political issue and how bad the arguments are for one side of that issue, and then end with the admonition that the members of the audience should “call Senator X” and tell them to vote a particular way about the issue discussed by the ad.  Even though the ad never mentions the election, the Media Bureau made clear that if Senator X is running for reelection at the time that the ad is run, one of the subjects listed in the ad should be his candidacy.  Stations will have to monitor this kind of ad, and know which Federal officials are running for office in their service area, to make sure that they catch these oblique references to an electoral campaign.

Sponsorship, too, must be complete and understandable to the station viewer or listener.  In a separate decision, issued at the same time as the more general order, the FCC staff admonished one station for listing an ad’s sponsor as the “DSCC-IE.”  Those initials stood for the Democratic Senatorial Campaign Committee – Independent Expenditure.  As those initials might not be recognizable to members of the general public, the FCC admonished the station for its incomplete disclosure.

The FCC staff also made clear that these kinds of objections can be raised not only by local citizens of the station’s service area, who normally are the ones thought to have “standing” to challenge a station’s action.  The Media Bureau said that the public file is required not just for local citizens, but for researchers, public interest groups and others who want to monitor what is going on at a station.  Thus, seemingly, any one in any of these groups would have standing to challenge a station for not having a complete file, not just in connection with the political file but for any other deficiency as well.  This may be one of the first times that the FCC staff has said that these kinds of distant organizations have standing to file complaints against broadcasters on a public file issue.  Did the FCC really mean for all of these disclosures to be for the benefit of researchers and public interest groups?  Is that really the purpose of a public file?   Should the FCC really be putting burdens on any business just to benefit researchers and public interest groups – or should those burdens be restricted to those which truly will lead to some benefit to local residents of a station’s service area?  Seemingly, this is the kind of question that some broadcasters admonished for their violations of this newly interpreted rule might want o raise on reconsideration of this order – one likely to be heard by the new FCC after the Presidential inauguration.  According to trade press, Republican FCC Commissioners indicated that they had no input into the final language of the decision and that they may want to review it after the inauguration.

In the meantime, these orders require careful review by broadcasters, as the nuances and examples provided by the order will give more guidance to stations as to what the FCC staff seems to be requiring by this decision.  We’ll also be watching to see what the parties admonished in these decisions do with this decision – whether it will be appealed to the new Commission to further address the matter and some of its implications for broadcasters in the future.

A Broadcasters Calendar of Regulatory Obligation for 2017

Delivered... David Oxenford | Scene | Mon 9 Jan 2017 6:12 pm

At the beginning of each year, we publish our broadcaster’s calendar of important dates – setting out the many dates for which broadcasters should be on alert as this year progresses.  The Broadcasters Calendar for 2017 is available here.  The dates set out on the calendar include FCC filing deadlines and dates by which the FCC requires that certain documents be added to a station’s public file.  These dates just recently changed for noncommercial broadcasters as the FCC suspended its requirement that noncommercial stations file Biennial Ownership reports every other anniversary of their license renewal filing (see our post here). Instead, their reports will be due on December 1 deadline which is the deadline for all stations, both commercial and noncommercial, to file these Biennial reports. That deadline is included on this calendar. In some states there are political windows even in what seemingly is an off year for elections (two governors and several big-city mayoral races are particularly noteworthy). The date for the beginning of the lowest unit rate window for the November general election is on the calendar, but stations need to check locally for primary dates and for any special elections that may be held in their service areas. Also included are some copyright deadlines, including dates to make payments to SoundExchange for Internet streaming royalties.

While the dates on this calendar may change, and new ones may be added, this at least gives you a start in planning your regulatory obligations. And, remember, you should always talk to your own attorney to make sure what dates are important to you.

License Renewal Shows FCC Does Not Regulate Content – Implications for Calls to Regulate Fake News?

Delivered... David Oxenford | Scene | Mon 19 Dec 2016 6:11 pm

Last week, the full FCC issued a decision upholding the license renewal grant of a Pacifica-owned radio station in New York. A listener was complaining that the station broadcast favorable statements about an individual who had shot a police officer. The FCC first noted that the listener had not provided details of the statement, but further stated that the FCC is not allowed to censor the content selected by broadcasters to air on their stations. Specifically, the FCC said: “A licensee has broad discretion — based on its right to free speech7 — to choose, in good faith, the programming it believes serves the needs and interests of its community of license.” The FCC is bound by the First Amendment to not judge the subject-matter content of what broadcasters broadcast. Instead, it regulates structurally, in a content-neutral manner through rules like the multiple ownership requirements, to avoid second-guessing the decisions of broadcasters as to what is said on the air.

The interplay between the First Amendment and FCC rules has been the seen in the handling of many issues by the FCC. We’ve written about it in the context of the abolition of the Fairness Doctrine, and when the FCC in 2014 officially abolished the last vestige of that doctrine – the Zapple Doctrine. We’ve also written (here and here) about that in connection with calls for the FCC to ban attack ads which can sometimes make over-the-top claims about political candidates – the truth or falsity of which broadcasters are sometimes required to determine when the attacked candidate challenges those ads and threatens to sue the station that is running them. Why doesn’t the FCC make those determinations? Because we don’t want the government deciding what can and cannot be run on the air. There are of course libel laws that can be used to crack down on false statements – even those in political ads – but standards for finding liability against public officials and other public figures are set high to block those laws from being used to suppress valuable debate on the issues (see our article here ).

We’ve recently heard much about the need to crack down on “fake news.” There have even been calls for Congress or the FCC to hold hearings about potentially doing something to combat these fallacious stories that may be having an impact on our political process, and are certainly having an impact on some people’s perception of reality (like when fake news brings guns to a local DC pizza restaurant that is quite familiar to many communications lawyers). But having the government put into the position of trying to decide, in the first instance, what is true and what is not is a recipe for government overreach – and also one which is almost impossible to enforce. Practically speaking, how would the government decide what is true or false? When courts are called on to decide in libel and defamation cases, trials can last weeks, with all sorts of witnesses trying to put claims in context. Any government agency trying to make such determinations, to ensure fundamental fairness, would have to go through a similar exercise, and by then the story is already out in the world and, in today’s world, potentially read by millions.

So does that mean that nothing can be done? The communications tools in today’s world are incredible – allowing content to flow from innumerable sources to millions of people in a moment. Just as the FCC and other government agencies have relied on the “marketplace of ideas” to come to a conclusion through robust debate as to veracity of political claims that are made, the press and the public generally can use the same modern communications tools to fight back against fake news – and can use the libel and defamations laws, as necessary to put some teeth in the fight. Voluntary efforts by private companies (e.g. Facebook) are also to be encouraged. But putting the government in the position of determining the truth of political speech of any kind just invites too much risk of partisan subjectivity invading broadcast and other media decisions.

As in the Pacifica case decided last week, keeping the government out of subjective judgements on broadcast content may mean that some things we don’t like are broadcast. But better that some things that we can criticize get aired, then risking not having the right to criticize at all.

What Broadcasters Can Learn from the Rolling Stone Defamation Case

Delivered... David Oxenford | Scene | Mon 7 Nov 2016 6:17 pm

At the end of last week, the press reported on the jury verdict finding Rolling Stone magazine to be liable for defamation for its story, later retracted, about a gang rape at the University of Virginia. The case was brought by a University administrator who was portrayed negatively, including making her sound as if she had been indifferent or dismissive of the alleged rape, which evidence later showed to be untrue. Even though the court deemed the administrator to be a “public figure,” the jury nevertheless found that there was sufficient “malice” on the part of Rolling Stone to merit the finding of liability. While this decision may well be appealed, it nevertheless is a finding of which broadcasters and other media companies need to take note, as it demonstrates that a sloppy review of the facts of a news report can lead to liability – even when reporting on public figures and important issues of wide public concern.

Under the NY Times v Sullivan Supreme Court precedent, the decision in defamation cases quite often depends on the determination of whether the person who was allegedly defamed is a public figure. The thinking of the Supreme Court in adopting the distinction between public figures and private individuals is that the public has more interest in vetting public figures, and by becoming a public figure, individuals expect that their conduct will be under scrutiny. To adopt a strict liability standard for public figures would mean that, if any mistake is made in reporting on their actions, a press outlet could find itself facing defamation liability, even if that mistake was made in good faith after reasonable reporting had been done. To avoid this strict liability, the Supreme Court decided that, if the victim is a public figure, to find liability, the jury must find not only that the statement made by the defendant was false, but also that it was made with “malice.” What does that mean?

Malice is not used in the way that most people may think of it (as an act intended to do evil or done with ill intent), but instead it looks at whether the outlet that distributes the false content did so either knowing that it was not true, or with reckless disregard for the truth of the statements made. In other words, the media outlet being sued either had to know that what they were saying was false, they simply didn’t bother to consider the truth, or they published it knowing that there was reason to believe that the statements being made might not be fully truthful. This kind of decision – whether or not to run something on the air where the content attacks the character or integrity of some identifiable individual – is the kind of decision made by broadcasters virtually every day in all sorts of situations, including in deciding whether to run political ads by non-candidate groups, when the truth of those ads has been questioned (see, for instance, our articles here and here). Not investigating the truth of allegations, especially when questions have been raised about their truth, can lead to issues like those that resulted in the finding of liability for Rolling Stone.

The Rolling Stone case shows that, despite an individual being found to be a public figure, liability is still a possibility where a judge or jury finds that the facts show that a media company was too lax in its reporting, and that it either ignored evidence that a report was incorrect, or started its investigation with such a preconceived notion of the end result that it simply did not bother to fully investigate the story it disseminated, even if any reasonable investigation would have revealed significant questions about the “confirmation” of the alleged facts that it was conveying. In today’s political climate where the media and the press have come under much scrutiny about their fairness and thoroughness, juries may be even more willing to second-guess whether any news investigation was reasonable or whether there were warning signs that were ignored by the media company so that it published the information with reckless disregard for its truth.

Media companies of course must be careful in their news productions to not make claims about individuals that cannot be substantiated. But, even more important, they need to caution all on-air employees, not just those in the news, to be alert to these concerns. A wild statement made on the spur of the moment by some on-air personality, that sounds like a factual assertion about a named individual’s character or integrity, can just as easily land a station in hot water as a news report gone bad. Or the continued broadcast or dissemination of a claim made by a third party (as in a political ad), whose truth has been called into question, can even give rise to potential liability. So, as in so many other areas, proceed with caution.

November Regulatory Dates For Broadcasters – Incentive Auction, EAS, Political and More

Delivered... David Oxenford | Scene | Mon 31 Oct 2016 5:33 pm

November is one of those few months where there is a very light load of routine regulatory filings for broadcasters.  This is a month with no routine FCC ownership or children’s television reports.  There are no routine EEO reports for the public file, and no other FCC regularly-scheduled deadlines.

Of course, there are several other dates that broadcasters need to be aware of.  October 31 is the end of the FM translator window to move translators up to 250 miles to serve AM stations – so November 1 will likely bring lessened demand for any translator that did not find a new AM home during the window that has been open to various groups of AM stations since January. Those looking for translators to operate with FM stations may find opportunities now less expensive, but harder to move, so opportunities will be limited to stations near to areas where the translators already are located.

Once the FCC’s Broadcast Incentive Auction for television has concluded, the FCC will announce two windows for new FM translators.  These windows (the first for Class C and D AM stations only, and the second for Class A and B AM stations) will only be open to AM licensees that did not participate in the 2016 windows.  See our article here for more information. 

November also brings the start of Stage 3 of the Reverse Auction, where TV broadcasters will again be bidding to give up their spectrum to wireless users starting on November 1.  See the FCC Public Notice here.  On Sept. 30, the FCC released a proposed Post-Incentive Auction Repacking plan for TV stations. Comments are due today, Oct. 31, on the FCC’s proposal for conducting the repacking in 10 different transition phases over 39 months. Reply comments on this proposal are due on Nov. 15.

The FCC also released a public notice asking for beta testing of its post-auction system to be used by TV stations applying for reimbursements of expenses they incur after being repacked following the incentive auction. Comments are due on the beta system by Nov. 4. See the Notice here for more details.  November 14, 2016 is the deadline for filing comments on the FCC’s proposed updates to the catalog of expenses that will be reimbursable for eligible TV stations.  (A link to the Public Notice regarding these updates can be found here.)  Reply comments will be due on November 29, 2016.

Also due in November is the Form Three filing reporting on the details of the results that a station had during the nationwide EAS test that was held on Sept. 28. Broadcasters and others have an obligation to file test result data electronically through the FCC’s new Electronic Test Report System (ETRS). EAS Participants were required to complete Form One before the nationwide test, and Form Two immediately after the test. Form Three must be filed within 45 days of the test, by Nov. 14.

Finally, in the week leading up to the election on November 8, broadcasters need to keep charging lowest unit rates to political candidates.  For more ideas on political broadcasting issues that broadcasters need to consider in the last week before the election, see our article here.

As always, there are lots of other dates that may be relevant to your station, so make sure that you consult with your broadcast attorney to stay on top of your regulatory obligations.  And watch at the end of the month for the December preview, as December is one of those months where all the routine regulatory filings return.

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