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Introduction
June 1, 2011 marked the beginning of a four-year cycle during which all commercial and noncommercial radio and television stations in the United States will come under special scrutiny by the Federal Communications Commission (“FCC” or “Commission”) as the FCC considers whether to renew each station’s license to broadcast.

This is a period of regulatory uncertainty and vulnerability for stations, during which the FCC closely reviews their record of compliance with its rules and service to the public during the license term, and third parties have the opportunity to petition the FCC to deny the station’s license renewal request. One significant focus of the FCC’s and petitioners’ attention will be each station’s performance under the FCC’s rules concerning equal employment opportunity (“EEO”).

In light of the ongoing renewal cycle, this Guide is designed to assist stations in charting a course for full compliance going forward, as well as in evaluating their level of past compliance and the risks the station may face when filing its license renewal application.

Article continues — a full version of this article can be found at The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters.

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The engineers who worked heroically to push broadcasting across the digital threshold had barely caught up on their sleep before agitation for more change began to erupt. The National Broadband Plan concluded that the amount of over-the-air viewing doesn’t justify the number of broadcast stations, and that the FCC could use incentive auctions to re-pack broadcasting into a smaller band of spectrum. Now incentive auctions are the law. This decade we will likely see more broadcast spectrum repurposed for mobile services and another “transition” as hundreds of broadcasters conform their facilities.

So what’s the connection between incentive auctions and talk of a new technical standard? The FCC thinks we need more spectrum for mobile services — in large part because of rising use of video on mobile devices. But the FCC’s rules dictate a broadcast television technical standard that means much of the most popular video — which is already available free-to-air — can’t be received by mobile devices. The FCC is right that spectrum best suited for mobile services should be useful for mobile services. So why stop with the highest frequency TV channels? If we’re going to do all the work of another transition, why not open a path for consumers to access the entire TV band with mobile devices? Many of the same forward-looking broadcasters that championed 8-VSB are working with others on a new standard that incorporates next-generation transmission technologies, as an article in TVNewsCheck reported earlier today. ATSC 3.0 would be easily accessible on mobile devices and provide a much better indoor viewing experience as well. And it will be ready to deploy when incentive auction repacking takes place.

But will every broadcaster want to upgrade at the same time? And what about consumers? FCC rules require all broadcasters to use the same digital standard to ensure universality — so every television can receive every broadcast signal. But not everybody thinks that’s the best policy. Back in the 1990s, the FCC itself debated whether it should select one standard, approve several standards, or simply let the market work things out. It adopted the ATSC standard, but it also asked whether the requirement to use that standard should sunset after a critical mass of deployment was reached.

Nobody wants a television Babel. But what does universal access mean when people increasingly consume their video on-the-move and on devices that we don’t think of as televisions? In my home near downtown Bethesda, Maryland, pretty close to many of the region’s television towers, I can reliably receive only three stations, even with an attic-mounted antenna. I can’t receive any broadcasts on any of my computers, tablets, or other mobile devices.

I love broadcast television, but in my case, it’s difficult or impossible to use most of the time. Millions of other Americans either don’t use over-the-air television directly, or use it less than they otherwise might, for similar reasons.

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Despite the many distractions of the new year, it’s important not to forget that by February 4, 2013, all full-power and Class A television stations must have completed the process of uploading public file materials to the FCC’s online public file system.

As we reported in July and August of last year, the FCC’s new rules require television stations to replace the public files they maintain at their studios with electronic files hosted online by the FCC. The new rules mean that each station must inventory their current paper public inspection file to determine which documents need to be uploaded to the FCC’s website. In order to comply with the new rules, stations must make sure that everything in their current paper public inspection file is uploaded to the FCC’s website except political broadcasting files created prior to August 2, 2012, and emails and letters from the public. While the focus has been on shifting the paper files into an online public file database, stations must remember that they will still be required to keep, at a minimum, the emails and letters from the public in the paper public file at each station’s main studio, and therefore take steps to ensure that the public will still be able to access that file during normal business hours. In other words, just because most of the file will be online, the procedures for allowing the public to promptly review public file materials that remain at the main studio must remain in place, including the need to ensure that the public can access the file during lunch hours.

Also, keep in mind that ABC, CBS, NBC and Fox affiliates located in the top 50 markets were required to begin placing new political file information online on August 2, 2012. These stations are not required to upload any political file documentation that was placed in the file prior to August 2, but they are required to keep the pre-August 2 materials in their paper public inspection files for two years from the date on which the documents were created. All other TV and Class A stations must continue to maintain their political files at their main studio, unless they voluntarily choose to upload their political files in advance of the July 1, 2014 deadline to do so.

Among the items that stations are required to upload on their own from their paper files to the FCC’s online file:

  • Citizens Agreements (if any)
  • Political Files since August 2, 2012 (top 50/top 4 networks for now)
  • Annual EEO Public File Reports
  • Responses to FCC inquiries
  • Records concerning commercial limits for children’s programming
  • Quarterly Issues/Programs Lists
  • Public Notices of assignment/transfer applications and renewal of license applications
  • Carriage elections of must-carry/retransmission consent
  • Joint sales agreements or time brokerage agreements
  • Non-commercial station donor lists
  • Class A statements of continuing eligibility

There are also a number of other documents that the FCC has indicated it will upload into stations’ online public files. However, it is important that stations diligently check their online public files to ensure they are complete, as the ultimate responsibility for maintaining a complete online public file is the station’s, and not the FCC’s. Items that should be automatically uploaded by the FCC are:

  • Authorizations
  • Applications and related materials
  • Contour maps
  • Ownership Reports (FCC Form 323)
  • The Public and Broadcasting Manual
  • EEO Forms (Forms 396 and 397)
  • Investigation materials originated by the FCC
  • Children’s Programming Reports (FCC Form 398)

Given the sheer size of public inspection files, the uploading process can be very labor intensive, and stations that have not yet commenced that process should immediately turn their attention to it. Stations should also understand that their public inspection files are now open to anyone with an Internet connection, making it for less likely that any omissions will go unnoticed. As recent issues of our monthly FCC Enforcement Monitor indicate, the FCC has not been hesitant to fine even noncommercial stations for public inspection file violations, and we are definitely seeing a trend by the FCC of issuing $15,000 fines rather than the base fine of $10,000. Time to get those page scanners running at top speed.

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Yesterday, the FCC adopted a Fifth Order on Reconsideration and a Sixth Report and Order (Sixth R&O) designed to facilitate the processing of approximately 6,000 long-pending FM translator applications and to establish new rules for low power FM (LPFM) stations. The result is that the FCC anticipates opening a filing window for applications for new LPFM stations in October 2013.

A number of parties had filed petitions for reconsideration (in response to the FCC’s March 19, 2012 Fourth Report and Order in this proceeding) challenging the FCC’s new limit on the number of translator applications that could be pursued both on a per-market basis and under a national cap. In response to those challenges, the FCC’s just released Fifth Order on Reconsideration: (1) establishes a national limit of 70 applications so long as no more than 50 of those applications specify communities located inside any of the markets listed in Appendix A to that Order; (2) increases the per-market cap from one application to up to three applications per market in 156 larger markets, subject to certain conditions; and (3) clarifies the application of the per-market cap in “embedded” markets.

In the Sixth R&O, the FCC laid the groundwork for introducing LPFM stations to major urban markets. As mandated by the Local Community Radio Act, the Sixth R&O also establishes a second-adjacent channel spacing waiver standard and an interference-remediation scheme to ensure that LPFM stations operating with these waivers will not cause interference to other stations. In addition, the Sixth R&O creates separate third-adjacent channel interference remediation procedures for short-spaced and fully-spaced LPFM stations, and addresses the potential for predicted interference to FM translator input signals from LPFM stations operating on third-adjacent channels.

The Sixth R&O also revises the following LPFM rules to better promote the localism and diversity goals of the LPFM service:

  • modifies the point system used to select among mutually exclusive LPFM applicants by adding new criteria to promote the establishment and staffing of a main studio, radio service proposals by Tribal Nations to serve Tribal lands, and the entry of new parties into radio broadcasting. A “bonus” point also has been added to the selection criteria for applicants eligible for both the local program origination and main studio credits;
  • clarifies that the localism requirement applies not only to LPFM applicants, but to LPFM permittees and licensees as well;
  • permits cross-ownership of an LPFM station and up to two FM translator stations, but imposes restrictions on such cross-ownership to ensure that the LPFM service retains its local focus;
  • provides for the licensing of LPFM stations to Tribal Nations, and permits Tribal Nations to own or hold attributable interests in up to two LPFM stations;
  • revises the existing exception to the cross-ownership rule for student-run stations;
  • adopts mandatory time-sharing procedures for LPFM stations that operate less than 12 hours per day;
  • modifies the involuntary time-sharing procedures, shifting from sequential to concurrent license terms and limiting involuntary time-sharing arrangements to three applicants;
  • eliminates the LP10 class of LPFM facilities; and
  • eliminates the intermediate frequency protection requirements applicable to LPFM stations.

If some of the above changes seem a bit cryptic, it is because the FCC has issued only a News Release briefly summarizing the changes. Once the FCC releases the full text of the orders, we will have a much more detailed understanding of the modifications. The full texts will hopefully become available in the next few days. In the meantime, radio broadcasters, particularly those with large numbers of FM translator applications pending, will be doing their best to assess how these FCC actions will affect their current and proposed broadcast operations.

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Don’t forget that by December 3, 2012, all commercial and noncommercial full power television stations, as well as all digital low power, digital Class A, and digital television translator stations that are licensed, or are operating pursuant to Special Temporary Authority, must electronically file an FCC Form 317 with the FCC. The purpose of the Form 317 is to disclose whether a station provided ancillary or supplementary services on its digital spectrum at any time during the twelve month period ending on September 30, 2012.

Ancillary or supplementary services are all services provided on a portion of a station’s digital spectrum that is not necessary to provide the required single, free, over-the-air signal to viewers. Thus, any video broadcast signal provided at no charge to viewers is exempt from the fee. According to the FCC, services that are considered ancillary or supplementary include, but are not limited to, “computer software distribution, data transmissions, teletext, interactive materials, aural messages, paging services, audio signals, subscription video, and the like.”

If a station did provide such ancillary/supplementary services in the past year, then the FCC expects that station to include in its Form 317 the services provided, the amount of gross revenues derived from those services, and a remittance Form 159 submitting payment to the government of 5% of the gross revenues generated by those services.

What if your station has never used any of its digital capacity for ancillary or supplementary services? It doesn’t matter, as all digital TV stations are required to file a Form 317 annually, whether or not they have transmitted any non-broadcast services. Stations unfamiliar with this requirement will want to take a look at our Client Advisory for more information, and make sure they don’t miss the coming deadline. Missing the deadline can result in a totally different “fee” being imposed on a station by the FCC – a fine for failure to timely file required forms.

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With the unprecedented popularity of social media, employees have increasingly used LinkedIn and other online forums to network for business and social purposes. When the line between personal and business use is blurred, litigation may ensue. A federal court recently ruled that an employer did not violate federal computer hacking laws by accessing and altering its recently departed CEO’s LinkedIn account, but that the former CEO could proceed to trial on her state law misappropriation claim. In addition, California, Illinois, and Massachusetts recently joined Maryland in enacting laws prohibiting the practice of requesting access to prospective employees’ password-protected social media accounts.

In Eagle v. Morgan, et al., Linda Eagle, former CEO of Edcomm, Inc. (“Edcomm”), filed a complaint in U.S. District Court in Pennsylvania alleging that Edcomm hijacked her LinkedIn social media account after she was terminated. While Eagle was CEO of Edcomm, she established a LinkedIn account that she used to promote Edcomm’s banking education services, to foster her reputation as a businesswoman, to reconnect with family, friends and colleagues, and to build social and professional relationships. Edcomm employees assisted Eagle in maintaining her LinkedIn account and had access to her password. Edcomm encouraged all employees to participate in LinkedIn and contended that when an employee left the company, Edcomm would effectively “own” the LinkedIn account and could “mine” the information and incoming traffic.

After Eagle was terminated, Edcomm, using Eagle’s LinkedIn password, accessed her account and changed the password so that Eagle could no longer access the account, and then changed the account profile to display Eagle’s successor’s name and photograph, although Eagle’s honors and awards, recommendations, and connections were not deleted. Eagle contended that Edcomm’s actions violated the federal Computer Fraud and Abuse Act (“CFAA”), Section 43(a) of the Lanham Act, and numerous state and common laws. In an October 4, 2012 ruling on the company’s summary judgment motion, U.S. District Judge Ronald L. Buckwalter dismissed Eagle’s CFAA and Lanham Act claims against Edcomm but held that Eagle had the right to a trial on whether Edcomm had violated state misappropriation law and other state laws.

The Eagle case is just one example of how the absence of a clear and carefully drafted social media policy can lead to protracted and expensive litigation. This area of law appears to be garnering increasing attention on the legislative front as well as the judicial front, as three more states recently enacted laws prohibiting employers from requiring, or in some cases even requesting, access to prospective employees’ social media accounts. The attached chart includes more detail about the California, Illinois, Massachusetts and Maryland laws and the provisions of similar legislation pending in the various states and in the U.S. Congress.

A common theme connects the Eagle case with the recent password access legislation: the importance of defining the lines of ownership and demarcating the boundary between the professional and the personal. If Edcomm, for example, had established a LinkedIn account for its CEO’s use and had asserted its property interest in the account at the outset of the employment relationship, Edcomm’s CEO would have had no reasonable expectation of ownership in it. Under that scenario, Edcomm likely would not be facing trial on a misappropriation claim. Similarly, the social media password legislation definitively declares that employers and prospective employers have no right to access the social media accounts that applicants and employees have established for their personal use.

In addition, as explained in our recent Client Alert on enforcement actions under the National Labor Relations Act in connection with employer discipline of employees for social media postings, employer responses to employee use of social media can also result in government agency action against employers. These developments all point to the same message: employers wishing to avoid legal risk should be proactive in implementing well-defined policies and procedures relating to the LinkedIn, Pinterest, Twitter, Facebook and other social networking and media accounts of prospective, current and former employees, including clearly identifying rights to those accounts when the employee leaves the company.

A PDF version of this article can be found here, which includes a chart summarizing State and Federal Social Media Bills.

To read prior Client Alerts related to this subject, click on the links below:

Client Alert, First NLRB Decisions on Social Media Give Employers Cause to Update Policies, Practices

Client Alert, Employ Me, Don’t Friend Me: Privacy in the Age of Facebook

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The FCC has initiated a rulemaking proceeding seeking comments on a comprehensive review of its satellite and earth station licensing and operating rules. The nearly 100-page Notice of Proposed Rulemaking (NPRM) is the FCC’s first broad reexamination of its Part 25 rules in over fifteen years. Among other items, the FCC’s proposed revisions include:

  • Focusing the rules on addressing interference issues and removing unnecessary Commission oversight and regulation of technical decisions.
  • Increasing the number of earth station applications eligible for routine and streamlined processing.
  • Removing unnecessary reporting rules and consolidating remaining requirements for annual reporting, while improving reporting of emergency contacts.
  • Providing greater flexibility to earth station applicants in verifying antenna performance.
  • Consolidating and clarifying several of the milestone requirements for space stations.
  • Codifying the FCC practice of granting a single earth station license covering multiple antennas located in close proximity to each other.
  • Updating, improving, and consolidating definitions and technical terms used throughout Part 25.

With these proposed changes, the FCC hopes to remove administrative burdens on stakeholders and FCC staff, expedite its licensing process, and to facilitate satellite and earth station operations. The comment filing deadlines have not yet been set, but will occur 45 days after the FCC’s rulemaking order is published in the Federal Register. Parties interested in commenting on the FCC’s proposals, or wishing to provide alternative proposals for the FCC to consider, will want to begin gearing up for this proceeding by talking these issues through with counsel to determine what to propose, and how best to present it to the FCC.

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The first compliance deadline for the FCC’s new rules for the closed captioning of video programming delivered via Internet protocol (i.e., IP video), as required by the 21st Century Communications and Video Accessibility Act (CVAA), is September 30, 2012. April 30, 2012 was the effective date of the new rules and all video programming that appeared on television with captions after that date is considered “covered IP video” and will need to be captioned when being shown online in the future. “Video programming” is defined as “programming by, or generally considered comparable to programming provided by a television broadcast station.”

Last January, the FCC released its Order adopting rules to implement the CVAA’s requirements governing the closed captioning of IP video. The CVAA requires that all nonexempt full-length video programming delivered over the Internet that first appeared on TV in the United States with captions also be captioned online. According to the rules, video programming shown on the Internet after being shown on television must have captions based on the following timeline established by the FCC:

  • September 30, 2012: all pre-recorded programming not edited for Internet distribution must be captioned for online viewing. Pre-recorded programming is defined as programming other than live or near-live programming.
  • March 30, 2013: all live and near-live programming must be captioned for online viewing. Live programming is defined as programming that airs on TV “substantially simultaneously” with its performance (i.e., news and sporting events). Near-live programming is video programming that is performed and recorded less than 24 hours prior to the first time it aired on television (i.e., the “Late Show with David Letterman”).
  • September 30, 2013: all pre-recorded programming that is edited for Internet distribution must be captioned for online viewing. Programming edited for Internet distribution means video programming for which the TV version is “substantially edited” prior to its Internet distribution.

Keep in mind that there is a different compliance schedule for all programming that is subject to the new requirements but which is already archived in a video programming distributor’s or provider’s library before it is shown on television with captions. Such programming is subject to the following deadlines:

  • Beginning March 30, 2014, all programming that is subject to the new requirements and is already in the distributor’s or provider’s library before it is shown on television with captions must be captioned within 45 days after it is shown on television with captions.
  • Beginning March 30, 2015, such programming must be captioned within 30 days after it is shown on television with captions.
  • Beginning March 30, 2016, such programming must be captioned within 15 days after it is shown on television with captions.

Clients frequently ask whether the new rules apply to clips, video-clips, or outtakes. Generally, the answer is no. The FCC’s Order defines clips as “excerpts of full-length programming.” According to the FCC, the rules apply to “full-length video programming” defined as “video programming that appears on television and is distributed to end users, substantially in its entirety, via IP.” This definition therefore excludes video clips or outtakes from video programming that appeared on television. However, keep in mind that the FCC also indicated that when “substantially all” of a full-length program is available via IP, whether as a single unit or in multiple segments, that program is not considered a clip and does constitute a full-length program subject to the IP captioning rules.

Those interested in learning more about these issues should contact us.

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The FCC recently released an Order giving companies greater flexibility in how they can structure foreign investment in common carrier licensees, such as wireless companies that provide phone service. This action, taken in a proceeding initiated last year, is a first step towards simplifying and streamlining the FCC’s cumbersome foreign ownership review and approval process, with the goal of facilitating increased foreign investment in telecommunications companies.

The FCC’s foreign ownership policy is governed by Section 310 of the Communications Act. Section (b)(3) of the statute requires the FCC to prohibit certain foreign entities from being FCC licenses themselves and from directly holding ownership interests that exceed specified levels in certain types of FCC licensees, such as common carrier licensees. The FCC’s International Bureau previously interpreted this provision to strictly prohibit foreign entities from having more than a 20% non-controlling interest (direct or indirect) in an FCC common carrier licensee.

The Order replaces this absolute prohibition with a discretionary policy already in use under a different section of the statute, Section 310(b)(4). That section restricts foreign entities from having more than a 25% controlling interest (direct or indirect) in any parent company of an FCC common carrier licensee (among other entities), unless the FCC specifically approves a greater foreign ownership interest.

The FCC makes the determination of whether it should allow greater foreign investment under Section 310(b)(4) and now under Section 310(b)(3), by examining whether the foreign investment is from a World Trade Organization (WTO) Member country, using a “principal place of business” test. If under the principal place of business test the investment is from a WTO Member country, the proposed foreign investment is presumed to be competitive and in the public interest. Where the investment is from a non-WTO Member country, the FCC applies what is known as an “effective competitive opportunities” or “ECO” test. The purpose of the ECO test is to determine whether competitive opportunities exist for American companies in those non-WTO Member countries and whether the foreign investment in the U.S. will serve the public interest.

The FCC’s foreign ownership review and approval process under Section 310(b)(4) has historically proven to be complex and time-consuming, both for licensees and the FCC. Licensees are required to engage in costly and extensive efforts in order to compile detailed information regarding citizenship and principal places of business of investors. There is no exception for individuals and entities that hold even de minimis interests through multiple intervening investment vehicles and holding companies. Moreover, licensees often have to conduct this exercise repeatedly given the fluid nature of investments. For its part, the FCC must expend considerable resources of its own processing (and often reprocessing) the voluminous and detailed information submitted by licensees.

The FCC’s decision liberalizes only its ownership policies under Section 310(b)(3). It leaves for another day the extensive reforms proposed by the FCC in a Notice of Proposed Rulemaking regarding foreign ownership under Section 310(b)(4).

The FCC’s Order has been published in the Federal Register and is now in effect. Parties interested in learning more about the FCC’s Order or the foreign ownership reform proceeding should contact Pillsbury for advice.

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Last week the Federal Communications Commission (FCC) adopted a Consent Decree involving a “voluntary contribution” of more than a quarter of a million dollars by a well-known guitar manufacturer, Fender Musical Instruments Corporation, relating to claims of unauthorized marketing of bass amplifiers, pre-amplifiers, tuners, audio mixers, and wireless microphones. While one might be puzzled by the FCC’s interest in regulating musical equipment, the fact is that these devices, like virtually all modern day products, incorporate digital circuitry and generate (intentionally or unintentionally) radio-frequency signals that can cause interference to other spectrum users. The FCC’s action is a reminder to all types of businesses that digital devices are regulated and must comply with the FCC’s Part 2 and Part 15 rules regarding equipment authorization, including certification, verification, and declarations of conformity.

The FCC’s investigation into Fender’s products began in June 2010, when the FCC sent the company a letter of inquiry. While the content of the letter is not publicly available, it appears that the FCC sought information about when Fender received equipment authorizations for certain products, the labeling of such products, and the information disclosed in the user manuals for those products.
Over the course of the next two years, Fender, through its legal counsel, submitted a number of filings responding to the FCC’s inquiry, and executed tolling agreements that permitted the FCC to extend its investigation. Ultimately, Fender reached an agreement with the FCC terminating the investigation. In the agreement, Fender did not acknowledge any wrongdoing (nor did the FCC reach any such conclusion), but the company voluntarily agreed to contribute $265,000 to the U.S. Treasury and institute an internal program to ensure future compliance with the FCC’s rules. While this is nowhere close to being the most expensive equipment-related contribution or fine the FCC has received or assessed for unlicensed devices (in one case the FCC assessed a $1 million dollar forfeiture), it does send a loud message to manufacturers and importers of almost all modern day electronic devices that the FCC polices its equipment authorization rules and treats potential violations seriously.

For an overview of the FCC’s Part 2 and Part 15 rules, you can check out our Client Advisory on the subject.