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As many of you know by now, very few topics were hotter during the NAB Show in Las Vegas this week than the FCC’s looming April 27 public meeting vote to decide how to implement its proposals to require online posting of TV station public inspection files. As Laurie Lynch Flick reported previously here, the FCC is proposing to require television broadcasters to replace their existing locally-maintained public inspection files with digital public inspection files to be maintained online, including stations’ political records. The online public file has broadcasters concerned because creating and maintaining a centralized online public file substantially increases their public inspection file burdens, while the political portion of the file contains sensitive competitive and pricing information that broadcasters would prefer not be made available to competitors online on a near real-time basis.

The proposals have proven to be so controversial that earlier today the National Association of Broadcasters (NAB) filed a request with the FCC to grant a two business day delay of the commencement of the “sunshine period” in the FCC’s online public file proceeding. For those who are not familiar with the “sunshine period” requirement, the term refers to the week before one of the Commission’s monthly public business meetings (known as “open meetings”) during which time all contacts with Commission staff concerning the matters to be decided at the meeting are prohibited, until such time as the text of the Commission’s decision is publicly released. The sunshine period for the online file proceeding is scheduled to commence today, and the NAB is asking the FCC to delay the effective date until next Tuesday, April 24, in order to allow interested parties to continue to discuss the FCC’s proposals with FCC staff members.

To make matters even more interesting, yesterday a media placement company asked the FCC to refrain from going forward at the April 27 meeting with any requirements regarding placing political files online.

The precise details of the FCC’s online public file requirements, including those for the political file, aren’t likely to be released until the FCC’s April 27 monthly meeting. However, during discussions at the NAB Show, FCC staff informed broadcasters that the FCC’s Order is expected to, at a minimum, require online posting of public inspection files by all television stations this year, with the posting of the online political file portion of the public file to be phased in, initially applying to network-affiliated stations in the top 50 markets. All other television stations would be required to move their political files online within the next two years.

Regardless of the precise approach taken by the FCC for putting political file information online, stations would be wise to ensure that their current political file is complete and that their political sales practices comply with the numerous legal requirements. Moving a poorly kept political file online is an invitation to trouble.

A good place to start for ensuring your political file compliance is with our Political Broadcasting Advisory, which is regularly updated and is a comprehensive guide for broadcasters to use to help them comply with the FCC’s political broadcasting rules, including the political file requirements. The time to fix any public file/political file and political sales problems is now, before the data has to be posted on the Internet.

As the details of the Order the FCC is expected to release on April 27 leak out, the FCC continues to revise its positions and there may be a few more twists and turns before we are done. The FCC has moved this item to the front burner of its agenda about as fast as any in recent memory. What makes it more of an immediate concern for TV broadcasters is that the item will be released just prior to the time TV stations are preparing for what is expected to be the most expensive presidential campaign advertising blitz on record.

As the online public file/political file debate rages on, there can be no doubt we will have plenty more to discuss regarding these issues in the coming days and weeks ahead.

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A panel of the United States Court of Appeals for the Ninth Circuit in San Francisco today ruled, in a 2 – 1 decision, that the long-standing prohibition on the carriage of paid political and issue advertising by noncommercial television and radio stations is unconstitutional and may no longer be enforced by the FCC.

The majority opinion in Minority Television Project Inc v. FCC was authored by Judge Carlos Bea, a George W. Bush appointee, and joined in by Judge John Noonen, a Reagan appointee; Judge Richard Paez, a Clinton appointee, wrote a dissenting opinion. The case arose when Minority Television Project, licensee of noncommercial television station KMTP-TV was fined $10,000 by the FCC for violating the prohibition in Section 399B of the Communications Act against noncommercial stations carrying paid advertising for commercial entities. According to the FCC, KMTP-TV had carried over 1,900 advertisements for entities such as State Farm, Chevrolet and Asiana Airlines in the period from 1999-2002. Minority Television Project paid the fine, but filed suit in District Court for reimbursement of the fine and declaratory relief. After its arguments were rejected by the District Court, Minority Television Project brought this appeal.

The Court of Appeals focused on whether the statutory prohibitions on paid advertising in Section 399B are consistent with the U.S. Constitution. It concluded that the statute contains content-related restrictions that must be reviewed under the standard of “intermediate scrutiny,” which provides that the government must show that the statute “promotes a substantial governmental interest” and “does not burden substantially more speech than necessary to further that interest.”

The Court found that the prohibition on broadcasting paid commercial advertising on behalf of for-profit entities, the primary focus of Minority Television Project’s appeal, was narrowly tailored and promotes the substantial governmental goal of preventing the commercialization of educational television. As a result, the fine imposed on Minority Television Project was upheld. However, the Court went on to address the prohibition on carriage of paid candidate and paid issue advertising by noncommercial stations. It found no legitimate governmental goal underlying that prohibition. The Court reviewed the Congressional record developed when the prohibition on political and issue advertising was adopted, and failed to find any evidence to support the provision. It therefore held that aspect of the law to be unconstitutional.

The decision leaves open many important questions as to how to implement it. For example, the questions of whether or how the lowest unit charge provision of Section 315 of the Communications Act will apply to noncommercial stations are not addressed. Similarly, the Decision does not consider whether federal candidates will be entitled to
“reasonable access” rights on noncommercial stations, permitting federal candidates to buy advertising on noncommercial stations that do not want to accept political advertising. While the reasonable access provision of the Communications Act appears to exempt noncommercial educational stations from that requirement, it is a content-related law, and therefore raises questions as to whether the disparate treatment of commercial and noncommercial stations for this purpose is constitutional. Other practical questions, such as the application of equal opportunities rights, political file obligations, and the like will also have to be resolved if this decision is implemented. More broadly, if the decision stands, it could have a fundamental impact on the nature and funding of noncommercial broadcasting.

The Ninth Circuit’s decision only applies to states located within the jurisdiction of that Court (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington). The FCC and the Justice Department may seek review by the entire Ninth Circuit, sitting en banc, or seek review by the U.S. Supreme Court. As that drama plays out during an active political season, a lot of noncommercial stations will be scratching their heads trying to figure out what they can, can’t, and must do in light of the decision. Conversely, a lot of commercial stations aren’t going to be happy if they find that their political advertising revenues are being diverted to noncommercial stations. One thing is certain–if upheld, the implications of this decision for both noncommercial and commercial stations will be far reaching.

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The clock is ticking away the minutes until December 13, the effective date of the FCC’s new Commercial Advertisement Loudness Mitigation Act (CALM Act) rules. TV broadcasters and multichannel video programming distributors (MVPDs) attending the upcoming NAB Show in Las Vegas will be looking for the equipment necessary to meet the CALM Act requirements, and they will have plenty to see and do. According to the NAB’s agenda for the Vegas Show, there will be seminars led by equipment manufacturers discussing the CALM Act and dozens of vendors and manufacturers on hand to showcase their CALM Act monitoring, processing, and verification equipment at the Las Vegas Convention Center during the event.

The reason CALM Act compliance and equipment are likely to be “big in Vegas” this year is because, as you may recall, last December the FCC adopted rules for the implementation of the CALM Act which require TV stations and MVPDs to keep the volume of commercials at the same level as the accompanying programming. The FCC’s new rules incorporate the Advanced Television Systems Committee’s (ATSC) Recommended Practice (RP), which essentially allows broadcast stations and MVPDs to comply with the rules by meeting the requirements of the ATSC protocol (known as the A/85 RP). Stations and MVPDs must be in compliance with the A/85 RP and the FCC’s rules by December 13, 2012.

The CALM Act arises from decades of complaints to the FCC and Congress regarding excessively loud commercials. In fact, according to the FCC’s Notice of Proposed Rulemaking in the CALM Act proceeding, loud commercials “have been a leading source of complaints to the Commission since the FCC Consumer Call Center began reporting the top consumer complaints in 2002.” The subsequent rules adopted by the FCC are therefore designed to limit the volume of commercials transmitted to consumers and apply to advertisements locally inserted by television stations and MVPDs as well as to advertisements embedded in programs from third-party suppliers.

For locally inserted commercials, TV stations and MVPDs will be required to demonstrate that they have installed the necessary equipment to ensure compliance. The FCC will assume that a broadcast station or MVPD is in compliance if it has installed, uses, and maintains equipment that complies with the A/85 RP. For advertisements already embedded in programming received from third parties, networks and other program suppliers must certify that their programming is in compliance with the CALM Act.

The FCC’s rules establish a “safe harbor” for embedded advertisements received from suppliers. To use the safe harbor, TV stations and MVPDs are allowed to rely on certifications of compliance from their program supplier which certify that the programming is A/85 RP-compliant. For programming that has not been certified, “large” TV stations (i.e., those stations with more than $14 million in annual revenue) and “very large” MVPDs (i.e., those with over 10 million subscribers) may still transmit the third-party programming, but will be required to perform annual “spot checks” of 100 percent of the third-party programming they transmit. “Large” MVPDs (i.e., those with at least 400,000 subscribers nationally) will need to annually spot check 50 percent (chosen at random) of the noncertified channels carried by any system operated by the MVPD. The spot check requirements will phase out after two years. Small stations and cable systems do not need to conduct any spot checks to be in the safe harbor.
While many broadcasters and MVPDs won’t be at the NAB Show to attend “loudness legislation” seminars or to acquire the hardware and software tools needed to comply with the FCC’s CALM Act rules, all TV broadcasters and MVPDs need to make sure that they are familiar with the rules and understand their CALM Act obligations. Even though the CALM Act has been passed by Congress and is being implemented by the FCC, there is little doubt that the FCC will continue to hear complaints from consumers regarding loud commercials for the foreseeable future. The difference is that the FCC now has an enforcement mechanism to address those complaints.

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • A discussion of a number of forfeitures issued by the FCC fining individuals up to $25,000 for operating unlicensed radio stations.

FCC Sends Warning to Unlicensed Radio Operators

The FCC has recently been taking an active stance against unlicensed radio operations, as further evidenced by four recently issued penalties for violations of the Communications Act. Radio stations operating without a license should take this as a warning of future enforcement actions against such illegal operations.

In the first two instances involving the same individual in San Jose, California, the Enforcement Bureau issued two separate Notices of Apparent Liability for Forfeiture (“NAL”) for $25,000 each to the operator for unlicensed broadcasting on various FM band frequencies and for a failure to allow inspection of an unlicensed broadcast station. After several months, the operator failed to respond to either of the NALs. As a result, the Enforcement Bureau issued the two $25,000 Forfeiture Orders against the individual.

In a second case, a Florida man was found apparently liable for $15,000 for operating an unlicensed FM radio transmitter in Miami. In September 2011, the Enforcement Bureau, following up on a complaint lodged by a national telecommunications carrier, discovered two antennas used for unlicensed operations on the frequency 88.7 MHz on the roof of a building. During the site visit, the building’s owner indicated that the equipment was located in a rooftop suite rented by a tenant. The Enforcement Bureau agents left a hand-delivered Notice of Unlicensed Operations (“NOUO”) with the building owner, who indicated that he would deliver the NOUO to the tenant. On three subsequent occasions, agents from the Miami Field Office determined that the antennas in question were the source of radio frequency transmissions in excess of the limits of Part 15 of the FCC’s rules, therefore requiring a license for operation.

When the agents were finally able to interview the tenant, he admitted to owning the transmitter and operating the station. He also stated that he had been employed as a disc jockey for a station previously authorized to operate on 88.7 and was “aware he needed a license to operate the station.”

The base forfeiture amount under the FCC’s rules for operation without an authorization is $10,000. In this case, the FCC concluded that a $5,000 upward adjustment of the NAL was warranted because the operator was aware that his operations were unlawful prior to and after receipt of the NOUO.

Though the FCC issued the multiple hefty penalties for unlicensed operations described above, the FCC was ultimately more sympathetic to a third unlicensed operator. In September 2011, the Enforcement Bureau’s San Juan Office issued a NAL against the operator of an unlicensed radio transmitter in Guayama, Puerto Rico for $15,000. In response to the NAL, the operator argued that he believed his broadcast operations were legal, and he submitted financial information to support the claim that he was unable to pay the full amount of the NAL. Though the FCC affirmed its claims that the operator willfully violated the FCC’s rules, the FCC nevertheless lowered the fine to $1,500 due to the operator’s inability to pay.

After issuing multiple fines against unlicensed operators this month, the FCC is likely to continue issuing similar penalties in the future. Radio operators should be mindful of the equipment used in their operations and the signal levels transmitted during operations to avoid facing similar consequences.

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Earlier today, the FCC’s Fifth Report and Order revising the Part 11 EAS Rules and codifying the obligation that EAS Participants be able to process alert messages formatted in the Common Alerting Protocol (CAP) was published in the Federal Register. As a result of today’s Federal Register publication, the primary rule changes adopted by the FCC in the Order will be effective April 23, 2012.

If you recall from my previous posts on the matter found here and here, the main focus of the FCC’s Order was to specify the manner in which EAS Participants must be able to receive CAP-formatted alert messages and to clarify the FCC’s Part 11 Rules. Among other things, the FCC took the following actions in its Order:

  • It required EAS Participants to be able to convert CAP-formatted EAS messages into messages that comply with the EAS Protocol requirements, following the conversion procedures described in the EAS-CAP Industry Group’s (ECIG’s) Implementation Guide;
  • It required EAS Participants to monitor FEMA’s IPAWS system for federal CAP-formatted alert messages using whatever interface technology is appropriate;
  • It adopted rules to generally allow EAS Participants to use “intermediary devices” to meet CAP requirements;
  • It required EAS Participants to use the enhanced text in CAP messages to meet the video display requirements; and
  • It adopted streamlined procedures for equipment certification that take into account standards and testing procedures adopted by FEMA.

Although the FCC’s new rules will be on the books as of next month, EAS Participants actually have until June 30, 2012 to install the equipment necessary to receive and convert CAP-formatted EAS alerts. When this deadline hits, five years or so of FCC CAP-related FCC decisions will come to a close. But don’t worry, the FCC and FEMA have already indicated that CAP is only the beginning of the digital emergency alert era and that more proceedings related to the so-called “next generation” of emergency alerting, including improving the Integrated Public Alert and Warning System (IPAWS), will likely be coming soon. Stay tuned.

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The FCC today issued a Public Notice officially launching the television station license renewal cycle. The Public Notice, however, also contains an unusual new request. Specifically, the FCC asks that television station licensees or their counsel log into their accounts in the FCC’s Consolidated Database System (CDBS) and update the licensee’s and its counsel’s contact information using the Account Maintenance function. The FCC will use this information to e-mail stations a reminder that their license renewal application is due. This is a new use of the CDBS system and makes one wonder how else the FCC will be able to use CDBS to communicate with licensees in the future.

Licensees that do not have a CDBS account must create one, since, as the FCC notes, all renewal filings must be made electronically. Licensees creating new accounts, however, must both create the new account and immediately use it to file a Change in Official Mailing Address form, which is found by clicking on the link labeled “Additional non-form Filings.” Existing account holders making changes to their contact information must also follow this procedure.

The Public Notice announces that license renewal applications can be filed beginning on May 1, 2012. The first stations to file will be television stations licensed to communities in Maryland, Virginia, West Virginia, and the District of Columbia, which must begin airing pre-filing announcements starting on April 1, and file their renewal applications by June 1, 2012. We note that even though the FCC has announced that applications can be filed as early as May 1, stations should not file in advance of the schedule for their state, and that full power licensees in the first group of stations will still be airing pre-filing announcements until May 16 and should file their applications after that date.

The FCC’s Public Notice also contained some other pointers to jog memories, since most stations have not had to file this particular application in eight years. Specifically, it noted that the obligation to file a renewal application applies to all TV, Class A TV, LPTV, and TV Translator stations (even those that may still be waiting for their last renewal application to be granted), that a Form 396 EEO filing must also be made, and that noncommercial licensees must submit an Ownership Report on Form 323-E as well. Finally, the FCC reminded stations that they will need to respond to a new question which asks them to certify whether their advertising sales contracts have contained a non-discrimination clause since March 14, 2011.

The major point of the Public Notice, though, was unmistakeable. “Failure to receive a notice does not excuse a licensee from timely compliance with the Commission’s license renewal requirements.”

We’re here to help.

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March 2012

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

Noncommercial radio stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, and television stations licensed to communities in Texas must electronically file their Biennial Ownership Reports by April 2, 2012, as the filing deadline of April 1 falls on a Sunday. Licensees must file using FCC Form 323-E, and must place the form as filed in their stations’ public inspection files.

In 2009, the FCC issued a Further Notice of Proposed Rulemaking seeking comments on whether the Commission should adopt a single national filing deadline for all noncommercial radio and television broadcast stations like the one that the FCC has established for all commercial radio and television stations. That proceeding remains pending without decision. As a result, noncommercial radio and television stations continue to be required to file their biennial ownership reports every two years by the anniversary date of the station’s license renewal application filing.

A PDF version of this article can be found at Biennial Ownership Reports are due by April 2, 2012 for Noncommercial Radio Stations in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, and for Noncommercial Television Stations in Texas

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March 2012

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Michigan and Ohio must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations, and for in-state FM translator stations, are due by June 1, 2012.

Pre-Filing License Renewal Announcements

Full power commercial and noncommercial radio, LPFM, and FM Translator stations whose communities of license are located in Michigan and Ohio must file their license renewal applications with the FCC by June 1, 2012.

Beginning two months prior to that filing, however, full power commercial and noncommercial radio and LPFM stations must air four pre-filing announcements alerting the public to the upcoming renewal application filing. As a result, these radio stations must air the first pre-filing renewal announcement on April 1. The remaining pre-filing announcements must air once a day on April 16, May 1, and May 16, for a total of four announcements. At least two of these four announcements must air between 7:00 am and 9:00 am and/or 4:00 pm and 6:00 pm.

The text of the pre-filing announcement is as follows:

On [date of last renewal grant], [call letters] was granted a license by the Federal Communications Commission to serve the public interest as a public trustee until October 1, 2012. [Stations that have not received a renewal grant since the filing of their previous renewal application should modify the foregoing to read: “(Call letters) is licensed by the Federal Communications Commission to serve the public interest as a public trustee.”]
Our license will expire on October 1, 2012. We must file an application for renewal with the FCC by June 1, 2012. When filed, a copy of this application will be available for public inspection during our regular business hours. It contains information concerning this station’s performance during the last eight years [or other period of time covered by the application, if the station’s license term was not a standard eight-year license term].

Individuals who wish to advise the FCC of facts relating to our renewal application and to whether this station has operated in the public interest should file comments and petitions with the Commission by September 1, 2012.

Further information concerning the FCC’s broadcast license renewal process is available at [address of location of station’s public inspection file] or may be obtained from the FCC, Washington, DC 20554.

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March 2012

This Broadcast Station EEO Advisory is directed to radio and television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee and Texas, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Introduction

April 1, 2012 is the deadline for broadcast stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas to place their Annual EEO Public File Report in their public inspection files and post the report on stations’ websites.

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment.

In addition, those SEUs with five or more full-time employees (“Nonexempt SEUs”) must also comply with the FCC’s three-prong outreach requirements. Specifically, all Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening except in exigent circumstances, (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits, based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term. These Menu Option initiatives include, for example, sponsoring job fairs, attending job fairs, and having an internship program.

Nonexempt SEUs must prepare and place their Annual EEO Public File Report in the public inspection files and on the websites of all stations comprising the SEU (if they have a website) by the anniversary date of the filing deadline for that station’s FCC license renewal application. The Annual EEO Public File Report summarizes the SEU’s EEO activities during the previous 12 months, and the licensee must maintain adequate records to document those activities. Stations must also submit the two most recent Annual EEO Public File Reports at the midpoint of their license terms and with their license renewal applications.

Exempt SEUs – those with fewer than 5 full time employees – do not have to prepare or file Annual or Mid-Term EEO Reports.

For a detailed description of the EEO rule and practical assistance in preparing a compliance plan, broadcasters should consult “Making It Work: A Broadcaster’s Guide to the FCC’s Equal Employment Opportunity Rules and Policies” published by the Communications Practice Group. This publication is available at: https://www.pillsburylaw.com/siteFiles/Publications/CommunicationsAdvisoryMay2011.pdf.

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March 2012

The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ local public inspection files by April 10, 2012, reflecting programming aired during the months of January, February, and March 2012.

On Statutory and Regulatory Requirements

As a result of the Children’s Television Act of 1990 and the FCC Rules adopted under the Act, full power and Class A television stations are required, among other things, to: (1) limit the amount of commercial matter aired during programs originally produced and broadcast for an audience of children 12 years of age and younger, and (2) air programming responsive to the educational and informational needs of children 16 years of age and younger.

These two obligations, in turn, require broadcasters to comply with two paperwork requirements Specifically, stations must: (1) place in their public inspection file one of four prescribed types of documentation demonstrating compliance with the commercial limits in children’s television, and (2) complete FCC Form 398, which requests information regarding the educational and informational programming the station has aired for children 16 years of age and under. Form 398 must be filed electronically with the FCC and placed in the public inspection file. The base forfeiture for noncompliance with the requirements of the FCC’s Children’s Television Programming Rule is $10,000.

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