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If there had been any doubt that the Video Division of the FCC’s Media Bureau would check a television station’s online public inspection file to confirm the truthfulness of certifications made by the licensee in a pending license renewal application, that doubt has been eliminated.

In a Notice of Apparent Liability for Forfeiture released December 3, the Video Division has proposed a $9,000 fine against the licensee of two Michigan televisions stations on the grounds that (i) each station had filed their Children’s Television Programming Reports (“Kidvid Reports”) late, and (ii) the stations failed to report those violations in responding to one of the certifications contained in their license renewal applications.

According to the FCC, the licensee had filed each station’s Kidvid Report late for three quarters during the license term in violation of Section 73.3526(e)(11)(iii) of the Commission’s Rules.

The problem was compounded when the licensee failed to disclose those violations in responding to Section IV, Question 3 of the Form 303-S, which requires licensees to certify “that the documentation, required by 47 C.F.R. Section 73.3526…has been placed in the station’s public inspection file at the appropriate times.” That same certification requires the applicant to submit an exhibit explaining any violations.

The Video Division of the FCC proposed that each station be assessed a fine of $3,000, the base forfeiture amount for failing to timely file Kidvid Reports, plus a fine of $1,500 for omitting from its renewal applications information regarding those violations. The Division suggested that it could have fined each station $3,000, rather than $1,500, for the reporting failure, but reduced the amount because each licensee “made a good faith effort to identify other deficiencies.”

Fortunately for the licensee in this case, it had checked the certification box with a “no,” and disclosed that its quarterly issues/programs lists had not been timely uploaded to the FCC’s online public file for the station. While the licensee did not mention anything about the late-filed Kidvid Reports, apparently the Video Division believed that the licensee’s failure to disclose was intentional enough to warrant a fine, but not deliberate enough to warrant a charge of misrepresentation or lack of candor that could have resulted in a much larger fine or worse.

The lessons learned from the Video Division’s action include: before signing off and filing a station license renewal application, (i) check the FCC’s online database to make sure that it has a record of all documents that were required to be timely filed, (ii) check the station’s paper (in the case of radio) and online (in the case of television) public inspection file to confirm (or not) that the file is complete and that the documents required to be in the file were placed there on a timely basis, and (iii) discuss with counsel what may need to be disclosed (or not disclosed) in response to certifications contained in a station’s application for renewal of license.

Of future concern is whether the Media Bureau will now be more inclined to impose even higher fines, claiming misrepresentation/lack of candor, where a license renewal applicant makes an unqualified affirmative certification that is not correct, or where the applicant states that it is unable to make an affirmative certification and provides an explanation, but does not fully disclose all material facts in its explanation. Recently the Media Bureau imposed a $17,000 fine against a station for violating Section 1.17 (misrepresentation/lack of candor) after having concluded that had the station “exercised even minimal due diligence, it would not have submitted incorrect and misleading material factual information to the Commission.” The Bureau made a point of the fact that the base statutory fine for misrepresentation or lack of candor is $37,500. Affirmative due diligence and caution are your best insurance policies in avoiding such a new and unbudgeted line item expense on your company’s next P&L.

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Earlier today, the FCC released a Public Notice detailing the results of the recent LPFM filing window, along with guidance as to what happens next. More than 2,800 low power FM (LPFM) applications were filed during the October 15 – November 15 (as extended) filing window, with the largest numbers coming from Texas (303), California (283), and Florida (276). To put that number in perspective, if it were possible to grant all of the filed LPFM applications, it would increase the number of radio stations in the U.S. (not including translators) by nearly 20%.

However, many if not most of the applications will indeed conflict with each other, so part of the reason for today’s Public Notice is to respond to inquiries regarding the processing of singleton and mutually exclusive applications. This includes such topics as amendments, settlement agreements between mutually exclusive applicants, time-sharing agreements, petitions to deny, and how parties can obtain reinstatement of dismissed applications. Given the more than a decade it took to process applications from the 2003 FM translator filing window, the breakneck speed at which the FCC is moving to process LPFM applications is notable.

According to the Public Notice, the FCC intends to begin rapidly processing applications as early as this month, stating that:

  • The Bureau’s first priority has been to identify singleton applications (applications that do not conflict with other applications filed in the window), of which there appear to be about 900. The FCC indicates it hopes to begin granting such applications in January 2014.
  • Later this month, the Bureau will release a Public Notice identifying the mutually exclusive (MX) application groups.
  • Effective with the release of the Public Notice on MX application groups, mutually exclusive applicants will have the ability to file technical amendments and/or enter into settlement and time-sharing agreements to resolve application conflicts.
  • Following the Bureau’s review of technical amendments and agreements filed to remove application conflicts, the FCC will identify one or more tentative selectees from each mutually exclusive group. The Bureau will then analyze petitions to deny filed against each tentative selectee, and either grant or dismiss that application. In certain cases, the FCC will identify a successor tentative selectee or selectees after acting on the application of the original tentative selectee.

The Public Notice also provided the following information:

Mutually Exclusive Applications: For applications that do not meet the minimum separation requirements of the FCC’s rules, parties are allowed to negotiate settlements and/or file technical amendments to resolve conflicts after the FCC releases the MX Public Notice. As noted above, the FCC intends to release the MX Public Notice later this month.

Amendments: Once the MX Public Notice is released, parties will be allowed to file certain minor amendments to their applications. Major amendments can only be filed by tentative selectees, and only after the FCC announces which applicants have been anointed with that status.

Settlement Agreements: MX applicants will also be allowed to resolve technical conflicts through settlement agreements among applicants, including agreements to make technical amendments to their applications to eliminate the conflict. The Public Notice spells out a detailed process applicants must follow to notify the FCC of their settlement plans.

Voluntary Time-Share Agreements: Parties are also allowed to enter into “partial or universal time-share” agreements. Time-share agreements must (i) specify the proposed hours of operation of each time-share proponent; (ii) not include simultaneous operation of the time-share proponents; and (iii) include a proposal by each time-share proponent to operate for at least 10 hours per week.

Petitions to Deny: All applications that the Commission accepts are subject to petition to deny filings within 30 days after a Public Notice announcing that the application has been accepted for filing.

Dismissed Applications: The FCC is required to dismiss any application that does not comply with the FCC’s minimum distance separation requirements to pre-existing facilities. Any application that does not meet the separation requirements to existing facilities cannot be amended to fix that problem.

It is clear from today’s Public Notice that the FCC is working quickly to try and wrap up much of this proceeding by Christmas or shortly after the new year begins. Parties involved or potentially affected by this proceeding should therefore start adjusting their holiday schedules to be able to move quickly in response to the promised notices that will be rolling out of the FCC in the next few weeks.

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Yesterday, the FCC released a Notice of Proposed Rule Making setting forth a number of potential changes to its technical rules governing AM radio designed to revitalize AM stations and enhance the quality of AM service.

In the past several years, the Commission has instituted several changes to its AM rules and policies in hopes of improving AM radio and reducing the regulatory burdens on AM broadcasters. Among these are:

  • 2005 and 2008 – Announced simplified AM licensing procedures for KinStar (2005) and Valcom (2008) low-profile and streamlined AM antennas, which provide additional siting flexibility for non-directional stations to locate in areas where local zoning approval for taller towers cannot be obtained;
  • 2006 – Adopted streamlined procedures for AM station community of license changes;
  • 2008 – Adopted moment method modeling as an alternative methodology to verify AM directional antenna performance, reducing the cost of AM proof of performance showings substantially;
  • 2009 – Authorized rebroadcasting of AM stations on FM translators, which has proven to be extremely successful, with over 10% of all AM stations now using FM translators to provide improved daytime and nighttime service to their communities of license;
  • 2011 – Authorized AM stations to use Modulation Dependent Carrier Level (“MDCL”) control technologies, which allow AM stations to cut energy costs through reduced electrical consumption on transmissions and related cooling functions;
  • 2011 – Announced an FM translator minor modification rule waiver policy and waiver standards to expand opportunities for AM stations to provide fill-in coverage with FM translators;
  • 2012 – Authorized all future FM translator stations licensed from Auction 83 to be used for AM station rebroadcasting;
  • 2012 – Granted first Experimental Authorization for all-digital AM operation; and
  • 2013 – Improved protection to AM stations from potential re-radiators and signal pattern disturbances by establishing a single protection scheme for tower construction and modification near AM tower arrays, and designating moment method modeling as the principal means of determining whether a nearby tower affects an AM radiation pattern.

Now, with the introduction of yesterday’s Notice of Proposed Rule Making, the FCC is considering yet more changes to its rules to help AM radio. Among the proposals in the Notice of Proposed Rule Making are:
(1) Open an FM translator filing window exclusively for AM licensees and permittees during which AM broadcasters may apply for a single FM translator station in the commercial FM band to be used solely to rebroadcast the AM station’s signal to provide fill-in and/or nighttime service. The window, as proposed, would have the following limitations:

  • Applications filed during this window must strictly comply with the existing restrictions on fill-in coverage governing AM use of FM translators (e.g., they must be located so that no part of the 60 dBu contour of the FM translator will extend beyond the smaller of a 25-mile radius from the AM station’s transmitter site, or the AM station’s daytime 2 mV/m contour; and
  • Any FM translator station authorized though this filing window will be permanently linked to the licensee or permittee of the primary AM station acquiring the authorization, and the FM translator authorization may not be assigned or transferred except in conjunction with that AM station.

(2) Modify the daytime community coverage standards for existing AM stations contained in Section 74.24(i) of the FCC’s Rules to require only that stations cover either 50% of the population or 50% of the area of the station’s community of license with a daytime 5 mV/m signal. This proposal would not affect applications for new AM stations, or proposals to change the community of license of an existing AM station, both of which will continue to require that 100% of the community of license receive at least a 5 mV/m signal during the day, and cover at least 80% of the community of license at night with a nighttime interference-free signal.

(3) Modify nighttime community coverage requirements for existing AM stations by (i) eliminating the nighttime coverage requirement for existing licensed AM stations, and (ii) in the case of new AM stations and AM stations seeking to change their community of license, modify the rules so the station would be required to cover either 50% of the population or 50% of the area of the community of license with a nighttime 5 mV/m signal or a nighttime interference-free contour, whichever value is higher.

(4) Delete the AM “Ratchet Rule,” which currently results in a reduction of nighttime signal coverage for AM stations relocating their licensed facilities.

(5) Permit wider implementation of Modulation Dependent Carrier Level control technologies by amending the FCC’s rules to allow AM stations to commence operation using MDCL control technologies without seeking prior FCC authority, provided that they notify the FCC of the MDCL operation using the Media Bureau’s Consolidated Database System within 10 days of commencing such operation.

(6) Modify AM antenna efficiency standards, and consider whether the minimum field strength values set forth in various technical rules could be reduced by approximately 25%.

While the changes under consideration are significant, AM broadcasters will have a fair amount of time to contemplate them before comments on the proposals are due at the FCC. The comment deadline will be 60 days after Federal Register publication of the Notice of Proposed Rule Making, with reply comments due 30 days after that.

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As Scott Flick of our office reminded everyone yesterday morning, the FCC shut down from October 1, 2013 through October 16, 2013, and upon reopening, suspended filing deadlines until it could sort out some rational way of returning to normality. Late last night, the FCC announced its solution to that problem. After the past few weeks of uncertainty, those regulated by the FCC now know how to proceed (more or less). The FCC’s approach will win no points for elegant simplicity, but it is an earnest–and appreciated–effort to avoid merely going with a “one size fits all” approach.

According to the Public Notice:

Flings, with the exception of [Network Outage Reporting System] filings and certain other specified filings, that were due between October 1 and October 6 will be due on October 22, 2013. Filings, with the exception of NORS filings and certain other specified filings, that were due between October 7 and October 16 will be due 16 days after the original filing date, an extension equivalent to the period of the Commission’s closure. Thus, for example, a filing that would have been due on October 7, will be due on October 23, an extension of 16 days. To the extent the revised due dates for filings under this Public Notice fall on a weekend or other Commission holiday, they will be due on the next business day. Finally, any regulatory and enforcement filings that would otherwise be required to be filed between October 17 and November 4 with the exception of the NORS filings and other specified filings, will be due for filing on November 4, 2013 (which is the first business day following a 16-day period after the Commission’s October 17 reopening).

That Public Notice also added that:

To the extent the due dates for filings to which reply or responsive pleadings are allowed are extended by this Public Notice, the due dates for the reply or responsive pleadings are extended by the same number of days. Thus, for example, if comments were originally due on October 30 and reply comments due ten days later, comments would now be due on November 4 and reply comments on November 14. In addition, any STAs expiring between October 1, 2013 and October 22, 2013 are extended
until November 4.

FCC regulatees should read the public notice in full for more detail, and to discern whether their planned filings fall into that “other specified filings” category mentioned above, for which the FCC has announced yet more individualized deadlines.

The federal shutdown has not been easy on anyone inside or outside the FCC, and we have received an absolute deluge of calls from clients trying to deal with the disruption. With last night’s announcement, FCC applicants now have a path forward. Let the frenzied filing begin!

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As we prepare to head down to Orlando for the NAB/RAB Radio Show next week, I wanted to remind those who will be at the Show that Pillsbury is again sponsoring the Leadership Breakfast. This year, the event will be in Gatlin Ballroom D at the Rosen Creek Shingle Hotel on Thursday, September 19, beginning at 7:15 a.m., with the presentations to begin at 7:45 am. As before, we will have opening remarks from Marci Ryvicker, a Managing Director with Wells Fargo Securities and Wall Street’s number one broadcast analyst, and then a panel featuring Lew Dickey (CEO of Cumulus Media), Mary Quass (CEO of NRG Media), Jeffrey Warshaw (CEO of Connoisseur Media), and Larry Wilson (CEO of Alpha Broadcasting and L&L Broadcasting).

This year’s event should prove to be especially timely because of changes in the economy and the increased M&A activity, particularly with regard to radio. Cumulus has just announced deals with Townsquare Media to sell some stations and acquire others as well as a separate deal to buy Westwood One; Connoisseur as well as L&L Broadcasting have been active in buying stations; and NRG is always in the hunt. Beyond the particulars for individual companies are new technological developments, including the placement of an FM chip in Sprint’s mobile phones, which will help make radio that much more ubiquitous in the digital world.

The Leadership Breakfast is always a packed event (in part because of a free hot breakfast!), and I expect this year to be no different.

On a separate front, my Pillsbury partner Scott Flick will be speaking on an NAB panel (to be held on Wednesday, September 18, at 10:15 a.m. in Gatlin Ballroom A4) entitled “And the Answer Is: What is Radio Regulatory Jeopardy?” As regular readers of CommLawCenter have probably picked up from his posts here, Scott has an encyclopedic knowledge of FCC rules and decisions, and the session will no doubt be an entertaining and informative look at troublesome FCC issues.

Some of my other colleagues — including Dick Zaragoza, Miles Mason and Andy Kersting — will also be at the Show. One of the great benefits of NAB shows is the opportunity to catch up with old friends and meet new ones, so if you are going to be there, feel free to reach out to any of us and we’ll try to get together. We look forward to seeing you there.

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Full payment of annual regulatory fees for Fiscal Year 2013 (FY 2013) must be received no later than 11:59 PM Eastern Time on September 20, 2013. As of today, the Commission’s automated filing and payment system, the Fee Filer System, is available for filing and payment of FY 2013 regulatory fees. For more information on the FY 2013 annual regulatory fees, please see our Client Alert and our prior posts here and here.

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The August 20, 2013 Federal Register (“FedReg”) included a notice officially establishing the comment and reply cycle associated with the Federal Communications Commission’s (“FCC” or “Commission”) recently released Modernizing the E-Rate Program for Schools and Libraries Notice of Proposed Rulemaking (“NPRM”).1 According to the FedReg notice, comments are due September 16, 2013 and reply comments are due October 16, 2013. This is the Commission’s latest effort to modernize and streamline the E-Rate program.

The catalyst for this ambitious initiative is President Obama’s ConnectED initiative (the “Initiative”)2, which establishes that within five years 99 percent of U.S. students will have access to broadband and high-speed Internet access (at least 100 MBPS with a goal of 1 GPS within five years) within their schools and libraries. The Initiative includes: 1) providing the training and support for teachers needed for the effective use of technology in the classroom and 2) encouraging the development and deployment of complimentary devices and software to enhance learning experiences and 3) resurrecting the U.S. as a world leader in educational achievement.

The E-rate program was created in 1997 to “ensur[e] that schools and libraries ha[d] the connectivity necessary to enable students and library patrons to participate in the digital world.”3 According to the NPRM, the program commenced when “only 14 percent of the classrooms had access to the Internet, and most schools with Internet access (74 percent) used dial-up Internet access.”4 Seven years later, “nearly all schools had access to the Internet, and 94 percent of all instructional classrooms had Internet access.” A year later, “nearly all public libraries were connected to the Internet….”5
The E-rate program requires recipients to file annual funding requests. Those funding requests are categorized as either Priority One or Priority Two. Priority One funds may be applied to support telecommunications services, telecommunications and Internet access services, including but not limited to, digital transmission services, e-mail services, fiber and dark fiber, interconnected VoIP, paging, telephone service, voice mail service and wireless Internet access. Priority Two funds are allocated for support of internal connections, including, but not limited to, cabling/connectors, circuit cards and components, data distribution, data protection, interfaces, gateways and antennas, servers and software. The funds are calculated as discounts for acquiring, constructing and maintaining the services. Discount eligibility, which ranges between 20-90 percent, is established by the recipient’s status within the National School and Lunch Program (“NSLP”) or an “alternative mechanism”.6 The NPRM indicated that, “the most disadvantaged schools and libraries, where at least 75 percent of students are eligible for free or reduced price school lunch, receive a 90 percent discount on eligible services, and thus pay only 10 percent of the cost of those services.”7
The advent of high-capacity broadband has transformed Internet access into a portal by which students can experience interactive and collaborative learning experiences regardless of their geographic (rural or urban) location while preparing them to “compete in the global economy.”8 As with most improvements, this transformation is encumbered in the ways and means for acquiring, constructing and maintaining such technology. The E-rate program, including its administration and funding provisions, has remained relatively unchanged since 1997. The initial, and still current, cap on funding was $2.25 billion dollars. The FCC has indicated that requests for funding have exceeded that cap almost from the beginning. In 2013, requests for E-rate funding totaled more than $4.9 billion dollars.

Article continues — the full article can be found at FCC Commences E-Rate Program Overhaul.

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The FCC has released a Report and Order which includes its final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for fiscal year 2013 (FY 2013), and in some cases how the FCC will calculate Annual Regulatory Fees beginning in FY 2014. The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

The FCC adopted many of its proposals without material changes. Some of the more notably proposals include:

  • Eliminating the fee disparity between UHF and VHF television stations beginning in FY 2014, which is not a particularly surprising development given the FCC’s recently renewed interest in eliminating the UHF discount for purposes of calculating compliance with the FCC’s ownership limits;
  • Imposing on Internet Protocol TV (IPTV) providers the same regulatory fees as cable providers beginning in FY 2014. In adopting this proposal, the Commission specifically noted that it was not stating that IPTV providers are cable television providers, which is an issue pending before the Commission in another proceeding;
  • Using more current (FY 2012) Full Time Employees (FTE) data instead of FY 1998 FTE data to assess the costs of providing regulatory services, which resulted in some significant shifts in the allocation of regulatory fees among the FCC’s Bureaus. In particular, the portion of regulatory fees allocated to the Wireline Competition Bureau decreased 6.89% and that of all other Bureaus increased, with the Media Bureau’s portion of the regulatory fees increasing 3.49%; and
  • Imposing a maximum annual regulatory rate increase of 7.5% for each type of license, which is essentially the rate increase for all commercial UHF and VHF television stations and all radio stations. A chart reflecting the FY 2013 fees for the various types of licenses affecting broadcast stations is provided here.

The Commission deferred decisions on the following proposals in the Notice of Proposed Rulemaking that launched this proceeding: 1) combining the Interstate Telecommunications Service Providers (ITSPs) and wireless telecommunications services into one regulatory fee category; 2) using revenues to calculate regulatory fees; and 3) whether to consider Direct Broadcast Satellite (DBS) providers as a new multi-channel video programming distributor (MVPD) category.

The Annual Regulatory Fees will be due in “middle of September” according to the FCC. The FCC will soon release a Public Notice announcing the precise payment window for submitting the fees. As has been the case for the past few years, the FCC no longer mails a hard copy of regulatory fee assessments to broadcast stations. Instead, stations must make an online filing using the FCC’s Fee Filer system, reporting the types and fee amounts they are obligated to pay. After submitting that information, stations may pay their fees electronically or by separately submitting payment to the FCC’s Lockbox. However, beginning October 1, 2013, i.e. FY 2014, the FCC will no longer accept paper and check filings for payment of Annual Regulatory Fees.

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July 2013

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:

  • FCC Issues “Lighting Fixture” Citation
  • Consent Decree Adopted for Sponsorship ID Violation

FCC Issues Citation to Credit Union for Operating Lighting Fixtures Causing Harmful Interference to Licensed Communications

On July 17, 2013, the FCC issued a citation to the Caribe Federal Credit Union (“CFCU”) in San Juan, Puerto Rico for operating incidental radiators and causing harmful interference to licensed communications in violation of the FCC’s rules. The FCC’s investigation into this matter arose after receiving complaints of interference from an FCC licensee.

On June 12, 2013, an agent of the FCC’s San Juan Office of the Enforcement Bureau used direction finding techniques to determine that the interference, which was transmitting on 712.5 MHz, originated from the CFCU building at 193-195 O’Neill Street, San Juan, Puerto Rico. After further testing, the FCC agent determined that the particular source of the transmission was the interior lighting on the highest ceiling in the building (fifteen light fixtures about 40 feet above the floor).

Continue reading →

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Late yesterday, the FCC released a public notice providing information on the repacking process that will follow the broadcast spectrum incentive auction. This is the FCC’s second response to calls by a number of parties seeking greater transparency (and information in general) regarding the technical aspects of the repacking process, including the FCC’s repacking model and modeling assumptions. The FCC anticipates that more pieces of the puzzle, including details about how bids will be selected, how channels will be assigned, and the associated algorithms, will be made public in the coming months.

Specifically, in conjunction with the public notice, the FCC has made available the following:

  1. an update to its TVStudy computer software (now version 1.2) and supporting data for determining the coverage area and population served by television stations using the methodology described in OET Bulletin 69. According to the FCC’s public notice, the updated software operates in the same way as the prior version, but has an improved user interface and enhanced capabilities for station-to-station analysis;
  2. data about Canadian and Mexican television allotments and incumbent licensees in a format that can be readily used with the updated TVStudy software program; and
  3. descriptions of the analysis for “pre-calculating” which stations could be assigned to which channels in the repacking process, and which stations cannot operate on the same channels or adjacent channels, based on geographic issues. The software and data being provided contain preliminary assumptions necessary to perform the analysis. The Commission states that those assumptions are for illustrative purposes only and that the FCC has made no decision as to whether to adopt any of them.

While all additional information regarding the auction and repacking process is welcome, this most recent release appears incremental at best, and we have a long way to go before broadcasters or potential auction bidders will be able to accurately assess their options. Given the stakes, however, those who can decipher the FCC’s auction tea leaves earliest, and most accurately, will be at an advantage in the months to come.