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August 2009
The volatile combination of broadcast employees concerned about their income and job security, and cash-strapped businesses looking for cheap and effective ways to promote themselves in difficult economic times, creates an unusually fertile ground for payola and plugola violations. Complicating matters are state efforts to prohibit “payola” activities that are legal under federal payola law. Even being accused of payola can be devastating to a broadcaster, and stations must be extremely diligent in uncovering and preventing payola and plugola violations.

Payola is the undisclosed acceptance of, or agreement to accept, anything of value in return for on-air promotion of a product or service. It is forbidden by Sections 317 and 507 of the Communications Act of 1934, and by Sections 73.1212 (broadcast) and 76.1615 (cable) of the FCC’s Rules. Its sibling, Plugola, occurs when someone responsible for program selection promotes on-air a venture in which he or she has a financial interest without disclosing that interest to the station licensee and to the public. A payola or plugola violation by an employee usually results in the employer violating the FCC’s sponsorship identification rule as well.

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August 2009
In its assessment letters to regulatees, the Commission has announced that full payment of all applicable Regulatory Fees for Fiscal Year 2009 must be received no later than September 22, 2009.

On August 11, 2009, the final FY 2009 Annual Regulatory Fee Schedule was published in the Federal Register. Accordingly, the new fees are scheduled to become effective 30 days thereafter. As the date of this Advisory, the FCC has not released a Public Notice officially announcing the deadline for payment for FY 2009 annual regulatory fees. However, in assessment letters sent to regulatees earlier this month, the Commission stated: “Regulatory fee payments are due by September 22, 2009.” Accordingly, unless for some reason the new fees do not become legally effective by that date, holders of FCC authorizations that are subject to annual regulatory fees must make their Fiscal Year 2009 payments by 11:59pm EDT, on September 22, 2009.

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Recent Settlements and Court Rulings Bring Clarity to Royalty Landscape
8/18/2009
The long-running battle over royalties owed by webcasters–companies that broadcast music over the Internet–took several significant leaps towards conclusion last month with important developments both inside and outside of the courtroom. Spurred by the Webcaster Settlement Act of 2009, signed by President Obama on June 30, SoundExchange and webcasters entered into a total of five Congressionally blessed settlement agreements that are open to other webcasters and are binding on all copyright owners and performers. Additionally, decisions were announced in two appellate cases. Set forth below are sum­maries of the key terms and important deadlines.

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August 2009
The FCC has released its final schedule of Annual Regulatory Fees for FY 2009. It is expected that those fees will become due and payable sometime in September. We will issue a further Client Advisory as soon as the Commission issues a Public Notice announcing the applicable deadline.

The FCC has released the text of its Report and Order adopting a new schedule of annual regulatory fees. The fees for FY 2009 are almost 10% more than for FY 2008. A copy of the FCC’s Report and Order, including the FY 2009 fee schedule, may be viewed by clicking this link http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-62A1.pdf. Specifically, broadcaster related fees are provided in Appendix C, pages 21 – 23, of the FCC’s Report and Order. The FY 2009 regulatory fees are scheduled to become effective 30 days after publication in the Federal Register.

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8/4/2009
Practitioner comment on T-Mobile USA, Inc. v. City of Anacortes (No 08-35493, slip op. (9th Cir. July 20, 2009), available at 2009 WL 2138980).

The Telecommunications Act of 1996 (“TCA”) was enacted with goals that were at once complementary and contradictory–to increase competition and facilitate rapid deployment of new technology, on the one hand, while preserving the autonomy of states and municipalities, on the other. Since enactment, telecommunications service providers, and local and state governments, have resorted to the Act to suit their respective objectives. Providers, driven by technologies and market demand for new services, have continuously sought to install, upgrade and maintain telecommunications facilities upon both private and public property. State and local political leaders, motivated by changing values and community aesthetic objectives, have resisted and sought to regulate and control the installations. The TCA has proven to be an inconsistent guide, at best, to resolving this tension. More than a decade after enactment of the TCA, major questions about local right to control or deny telecommunications installations remain unanswered. Recent decisions in the Ninth U.S. Circuit Court of Appeals clarify the law as to wireless facilities but reveal remaining tension between local prerogatives and provider needs.

Lara-Beye Molina, an associate in the San Francisco office of the firm, assisted in the preparation of this Advisory.

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