Archive for David Oxenford

FCC Approves Ownership Rule Changes and Next-Gen TV ATSC 3.0 Standard

At its meeting yesterday, as expected, the FCC approved significant changes to its broadcast ownership rules and also approved the roll out of ATSC 3.0 – the next generation television transmission standard. While any change in ownership rules is always a contentious issue, and thus the 3-2 strict party-line vote approving the ownership changes might not have been surprising, the television technology change adopted yesterday proved to be controversial as well, also being approved by a 3-2 vote.

As of the writing of this article on Friday morning, the final texts of these decisions have not been released, so the details of these actions are not available. We will write further about the decisions next week when we have had a chance to digest the final orders. But summaries of both decisions, and the texts of the Commissioner’s statements on the issues, were released late yesterday.

On ownership, the summary of the FCC decision says that the FCC made several changes to its rules, reconsidering the FCC ownership decision made in August of 2016 when Chairman Wheeler left most of the existing ownership rules in place. The changes adopted include:

  • Eliminating the newspaper-broadcast cross-ownership rule
  • Eliminating the radio-television cross-ownership rule
  • Allowing the combination of two TV stations in a market even if there are not 8 independent owners and operators of full-power TV stations in the market after the combination
  • Permitting case-by-case consideration of combinations of two of the Top 4 TV stations in a market. Any such combination is prohibited under current FCC rules
  • Giving a presumptive waiver to owners of radio stations in “embedded markets” allowing them to acquire stations in other embedded markets in the same metropolitan area without evaluating the ownership combination in the parent market (for more details about this issue, see our article here).
  • Eliminating the attribution for ownership purposes of TV Joint Sales Agreements (meaning that JSAs between 2 TV stations will be allowed even if the party selling advertising time on another TV station could not own that station under the local TV ownership rules)
  • Providing for the filing with the FCC of Shared Services Agreements – agreements between TV stations that provide for some sort of joint operations less than a JSA or Time Brokerage Agreement.

The initial draft of the FCC Order (see our article here) said that these rule changes would be effective 30 days after they are published in the Federal Register. We will see if that timing is also adopted in the final order. It also must be noted that many of these changes may well be subject to appeal – perhaps back to the US Court of Appeals for the Third Circuit which has questioned FCC decision making on these issues in the past (see, for instance, our articles here and here). And, while this may mark the end of the 2014 Quadrennial Review of the FCC’s Ownership Rules, the Chairman noted that the 2018 review of the rules will begin soon, perhaps bringing more review of the radio ownership rules, including a potential review of radio subcaps (called for by Commissioner O’Rielly in his statement on the rule changes).

On ATSC 3.0, the FCC press release stated that the following rules have been adopted for the transition to the new transmission standard:

  • Requires broadcasters that use Next Generation TV to partner with another local station in their market to simulcast their programming in the current DTV standard, called ATSC 1.0, so that viewers can continue to receive their existing broadcast service without having to purchase new equipment;
  • Subjects Next Gen TV signals to the public interest obligations that currently apply to television broadcasters; and
  • Requires broadcasters to provide advance on-air notifications to educate consumers about Next Generation TV service deployment and simulcasting.

There are many more detailed obligations that are imposed on the transition which we will address when the FCC’s final order is released.

The Democratic Commissioners objected to this transition based on concerns for consumers – believing that the transition will impose costs on consumers to transition to the new television standard (which will require a new TV or converter to be received) which will not be reimbursed, that the transition has not been approved by Congress, and that there are no privacy protections for consumers given that the new TV standard will allow targeted advertising and programming. See the dissenting statements of Commissioner’s Rosenworcel here and Commissioner Clyburn here. Of course, mobile phone technology has upgrades all the time which often require new equipment with little regulatory concern for consumers, but there has always been greater concern about the protection of consumer’s access to television, as reflected in these dissenting statements.

Despite the controversy, the FCC meeting yesterday marked significant changes for broadcasters that will no doubt cause important changes in the industry in the short term. We will be watching as these changes play out in the coming months.

FCC Waives December 1 Filing Requirement for TV Stations Ancillary and Supplementary Revenue Report for Stations with No Such Revenue

The FCC’s Media Bureau, as a result of an FCC vote at its meeting last month to look at doing away with the requirement that all TV stations file a report by December 1 of each year detailing their revenue from ancillary and supplementary services – i.e. data and other non-broadcast services offered by the TV station through their digital transmissions – issued an Order suspending the December 1 filing requirement this year for all TV stations that have no such revenue. TV stations that have such revenue must file the report and pay to the government 5% of all of the revenue they receive from offering these non-broadcast services. As we wrote here, the FCC voted last month to start a rulemaking proceeding, as part of its proceeding to look at the Modernization of Media Regulation, to limit the filing requirement to only those stations that actually have ancillary and supplementary revenues – approximately 15 TV stations nationwide.

This FCC Form, Form 2100, Schedule G (formerly Form 317), based on this Media Bureau action, will not be required this year by stations with no ancillary and supplementary revenue while the FCC determines whether to abolish the requirement permanently. Of course, today the FCC will be acting on the proposal to adopt ATSC 3.0, a new TV transmission system which, among other benefits, will allow TV stations to increase their data transmission capabilities. So, even though initially stations that take advantage of this waiver will not have to file the report on ancillary and supplementary revenues this year, that obligation may well arise in the future if they recognize the benefits of ATSC 3.0 by offering non-broadcast services using their TV spectrum.

Two Updates – Effective Date of Noncommercial Fundraising and EAS Form 3 Filing

We wanted to remind you about two recent regulatory dates in case you have overlooked them. A number of trade press articles reminded broadcasters that yesterday was the due date for the filing of Form 3 of the ETRS reporting system, reporting on the results of this year’s Nationwide EAS tests. If you did not file, get that information on file now so that you are no later than necessary, and hope that the FCC cuts you a break on any late-filing. See our article here about that obligation.

Second, the new rules about noncommercial fundraising (about which we wrote here) went into effect yesterday, permitting noncommercial broadcasters who are unaffiliated with NPR and CPB to raise funds for nonprofit third parties for a limited amount of their broadcast time, even if such fundraisers interrupt their programming. If you are a noncommercial broadcaster, you can utilize these new rules to fundraise for charitable groups.

FCC Announces Window for TV Stations to File Minor Change Applications – Between November 27 and December 7

The FCC yesterday released a Public Notice announcing the opening of its window for full-power and Class A TV stations not repacked during the incentive auction to improve their facilities – the first opportunity to do so since the FCC froze TV minor change applications in 2013 in anticipation of the incentive auction. We wrote about the coming of this window in our article here. The window will be open from November 27 through December 7.

The idea with the opening of this window is for full-power TV stations to get an opportunity to do upgrades now, to essentially get them out of the system before the window for LPTV stations to file for displacement channels takes place (see our article here on the LPTV displacement window). The fear was that, if this window did not give full-power stations an opportunity to file, LPTV stations displaced by the auction and repacking of the TV spectrum could end up being displaced after their displacement window on any new channels that they obtain by full-power stations seeking new facilities. While, certainly, LPTV stations can be displaced in the future, the hope is that this window will drain some of the demand out of the marketplace to hopefully limit LPTV displacements in the future.

FCC Makes Clear By $1,500,000 Penalty, and Cancellation of Station Licenses, that Sequential Minor Change Applications with Temporary Construction of Facilities to Move LPTV Stations Great Distances Not Allowed

Last week, the FCC issued an Order and Consent Decree agreeing to end an investigation of a big operator of LPTV stations that had allegedly applied for new LPTV stations in a 2009 FCC filing window where applications were restricted to rural areas, obtained construction permits for those stations, and, through a series of minor change applications, moved a number of those stations to larger markets. The FCC stated that the licensee would temporarily construct a station and file an application for a license, and, when the license was granted, the station would go off the air. Then applications for minor changes to move these stations up to 30 miles away would be filed, when the process was repeated, allowing some stations to move hundreds of miles from where they were initially granted, to larger more urban communities where applications could not have been filed in the initial application window. The Commission noted that the applicant maintained permanent facilities for only about 50 of over three hundred authorizations received.

In connection with a sale of the licensee company, the FCC required that the licensee pay a penalty of $1,500,000 and forfeit about 30 licenses to settle the case finding that the certifications in license applications that stations were constructed in accordance with their construction permits was not accurate when these stations were not permanently constructed. The successive applications were also found to frustrate the limits on site moves and on the limitations imposed in the 2009 window. This holding is similar to one made in a radio case about which we wrote here where the Commission required permanent construction to meet construction deadlines.  The Commission also has found that multiple or serial hops of an FM translator station to be an abuse of process where the station was never meant to be operated on any permanent basis at any of the intermediate sites (see our articles here and here). So, if you are building a station, build it permanently, and not as a means to moving it to some greener pasture 100 miles away.

FCC Announces Dates for “Long-Form” Applications by AM Stations that Filed for New FM Translators

The FCC yesterday released a Public Notice announcing a filing window from December 1 through December 21 for “long-form” applications for new translators that were filed in this summer’s window for Class C and D AM stations to seek new FM translators to rebroadcast their stations. The Public Notice also sets the procedures for filing in this window. The window is for the filing of complete Form 349 applications by applicants who were deemed to be “singletons,” i.e. their applications would not cause interference to any other translator applicant. The list of singletons is here. The long-form application requires more certifications and technical information than that which was submitted during the initial filing window.

After the long-form application is submitted to the FCC, the application will be published in an FCC public notice of broadcast applications. Interested parties will have 15 days from that publication date to comment or object. If no comments are filed, and no other issues arise, the FCC’s Audio Division is known for its speed in processing translator applications so that grants might be expected for many of the applications late this year or early next.

Not specifically addressed is whether the applications that were not singletons (and were listed on the list of mutually exclusive applications about which we wrote here)but that manage to reach a settlement or file a technical solution before the November 29 deadline, will have the opportunity to file their long-form applications. According to the Public Notice announcing the settlement window, the FCC will request long-form applications after settlement agreements are filed. So, seemingly, they will be requested one by one as settlements are reviewed.

In any event, it appears that a number of AM stations will soon be able to start service with their new FM translator stations. And Class A and B AM stations should watch the FCC releases for their opportunity to file for new translators, likely coming after these translators are processed – sometime in early 2018.

November Regulatory Dates for Broadcasters – Including Broadcast Ownership, ATSC, Main Studio, EAS, TV Improvements and FM Translator Settlements

While November is an odd numbered month in which there are no deadlines for EEO Public File or Mid-term Reports, and it is not the beginning of a new calendar quarter when Quarterly Issues Programs Reports are added to a station’s public file and Quarterly Children’s Television Reports are filed with the FCC, that does not mean that there are no dates of interest to broadcasters this month. In fact, there are numerous policy issues that will be decided this month, and filing dates both for television broadcasters and AM broadcasters seeking FM translators for their stations.

The biggest policy dates will be November 16, when the FCC holds its monthly meeting, with two major broadcast items on the agenda. As we wrote here, the FCC will be considering both the adoption of ATSC 3.0, the new television transmission system promising better mobile reception and more data transmission capabilities for TV stations, and the reconsideration of last year’s decision on the ownership rules, where the FCC is expected to repeal the broadcast-newspaper and radio television cross-ownership rules and loosen the restrictions on TV duopolies in markets where such duopolies cannot now be formed.

Last month’s decision by the FCC to abolish the main studio rule is likely to be published in the Federal Register this month. That decision (see our articles here and here) becomes effective 30 days after its publication in the Federal Register so, while it will not take effect this month, we can expect some broadcasters to initiate their plans to immediately take advantage of this significant rule change when the effective date arrives.

There are also filing deadlines this month for stations looking to improve their technical coverage of their markets. TV stations that were repacked following the incentive auction have until tomorrow, November 2, to file minor change applications to increase power on the new channels to which they were assigned by the Commission (see our article here). Soon thereafter, the FCC will open a first-come, first serve window for other television stations not repacked by the FCC to file minor change applications (see our article here).

For AM stations that filed FM translator applications that ended up being in conflict with other applications filed in the window that was opened this summer for such filings, November 29 is the deadline for submitting technical solutions or other settlements that resolve these mutual exclusive situations. See our article here for more information.

Also in November is the date for comments on the FCC’s proposal to abolish the requirement that some licensees maintain paper copies of the FCC rulebook. This is one of the FCC’s first proposals stemming from its Modernization of Media Initiative. Comments are due on November 13, with replies due November 27. See our article here.

Finally, November 3 is the date by which broadcasters are supposed to report to their State Emergency Coordinating Committees on whether they broadcast multilingual EAS messages on their stations and whether they plan to do so in the future. See our article here. This process is being implemented in different ways in different states – so you should check with your state SECC to see how it is being handled where your stations are located.

As in any other month, there are other deadlines, including station specific ones, which you should be aware of and discuss with your own counsel.

FCC Announces Information Session on Revised Biennial Ownership Reports

The FCC yesterday released a Public Notice announcing that it will be holding an information session on November 28, 2017 at 1 PM Eastern Time to familiarize broadcasters with the new Biennial Ownership Report forms. This information session can be viewed live online and will also be archived for viewing after the session (archive to be available here). As we wrote here, the FCC has extended to March 2, 2018 the due date for filing Biennial Ownership Reports, as it is in the process of developing a new form that will, hopefully, make it easier for broadcasters to complete the Form 323 and 323E Ownership Reports that must be filed by licensees once every two years. This information, which will present an overview of the new form, appears to be its official unveiling.

Note that this will be the first time that noncommercial broadcasters will be filing at the same time as commercial broadcasters (see our article here). Also, while commercial broadcasters will need to obtain an FCC Registration Number (FRN) for each person who has an attributable interest in a station, the FCC recently decided that noncommercial licensees need not get an FRN for each member of its governing board (as it would entail getting each member’s social security number). But noncommercial broadcasters still will need to get a Special Use FRN for all officers and directors reported on their ownership reports (see our article here).

Florida Supreme Court Rejects Public Performance Right in Pre-1972 Sound Recordings – What’s Next?

In a decision this week, the Florida Supreme Court rejected claims by Flo & Eddie (of the 1960s band the Turtles) that there was a common law public performance right in pre-1972 sound recordings in the state of Florida (the opinion is available here). The Florida court, after examining numerous avenues of argument, concluded that the establishment of such a right was a legislative task. A judicial declaration that the right existed would, in the Court’s words, “have an immediate impact on consumers beyond Florida’s borders and would affect numerous stakeholders who are not parties to this suit.” It would also upset settled expectations, as the determination that there was a right would effectively create a sound recording performance right greater than that which has ever been recognized in the US – far broader than the limited right granted under Federal law to cover digital performances of sound recordings. The Court went on to conclude that other claims raised by Flo & Eddie were similarly unavailing. The Court found that any reproductions made in the transmission process by Sirius XM (the defendant in the case) were not entitled to composition as they were transitory and made only for purposes of the transmission, not for public consumption (and as Florida law specifically permitted limited reproductions by radio broadcasters and the Court considered Sirius to fit that definition). And, as there was no violation of any rights of the plaintiffs, the use of the recordings could not constitute unfair competition or conversion.

This case reached the Florida Supreme Court when it was certified by the United State Court of Appeals which was reviewing a District Court decision reaching the same conclusion as did the Florida Supreme Court – that there was no performance right under state law for pre-1972 sound recordings (see our summary of the District Court decision here). The Supreme Court’s decision in Florida is similar to that reached by the Court of Appeals in New York (the state’s highest court), about which we wrote here, determining that there was no NY state law public performance right in pre-1972 sound recordings. As we’ve written many times, pre-1972 recordings are not governed by Federal law, which was only extended to cover reproduction rights in sound recordings in that year, leaving all pre-1972 rights in sound recordings with the states. Georgia and Illinois have reached similar decisions in slightly different cases (see our article here on the Georgia decision). In California, where a District Court found a public performance right in pre-1972 sound recordings, we are awaiting word from its Supreme Court as to whether such rights exist in that state (see our article here on the certification of this question to the California Supreme Court).

Could California decide differently? As the Florida Supreme Court noted, the case in California is slightly different as there is a California statute that creates some sort of undefined property right in pre-1972 sound recordings. So the California court could rely on that distinction to reach a different conclusion – though any such decision would still leave unanswered the myriad of issues that one would think should be handled by a legislative body – how would any royalties that may be due be administered, how much would they be, who would receive them (the labels or the artists or some combination), would there be exemptions from the right (e.g. would bars and restaurants and radio stations all have to pay, or just digital services), and how long does the right exist (could copyright holders reach back to unasserted claims from years past, and could they continue to assert the right into the future until 2067 when these sound recordings become subject to Federal law)? We have already seen other issues arise in California litigation, such as whether digitally remastered copies of pre-1972 recordings are even considered pre-1972 recordings (see our article here).

We will await the California decision to see what’s next in the saga of pre-1972 sound recordings. And there still is the prospect of Federal legislation to Federalize, to some degree or another, these rights (see our article here on the pending Classics Act). So, while the Florida case seems to signal that most states do not find a public performance right under state laws, the last notes of the opera documenting the battle over the rights to perform these recordings may not have yet sounded.

November FCC Meeting to be an Important One for Broadcasters – FCC Releases Draft Orders on ATSC 3.0 and Ownership Rule Revisions

Yesterday, we previewed the FCC’s likely decision to significantly change its ownership rules for television owners – proposing to take actions including allowing TV duopolies in markets with fewer than 8 independent TV voices after the combination, allowing some combination of the Top 4 TV stations in certain markets, repealing the radio-TV cross-ownership rules, and repealing the newspaper-broadcast cross-ownership prohibitions. The FCC has now released the draft of the order to be considered at its meeting next month. It is available here.

Also on the tentative agenda (here) for the November meeting is the approval of the new standard for broadcast television – ATSC 3.0. The draft order would allow a voluntary transition to the new standard, with those TV stations that decide to convert being required to find a partner station in most cases so that viewers will be able to see the 3.0 station’s primary programming in the current ATSC 1.0 standard for at least 5 years. LPTV and TV translators would be exempt from this partnering obligation. The draft order is available here. We will provide more details on that draft order in the near future.

These items will be voted on by the Commission on November 16. They are controversial, so expect to see much debate on these items between now and the November meeting, and probably at the meeting itself.