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Last month, the FCC released an Order on Reconsideration and Further Notice of Proposed Rulemaking that clarified a number of aspects of the FCC’s complex closed captioning requirements for video programming delivered using Internet Protocol (IP) and the devices used by consumers to view it. In the FCC’s words, the Order and Further Notice was issued to “affirm, modify, and clarify certain decisions” made by the Commission last year implementing closed captioning requirements for video programming distributed via IP.

The original IP captioning rules were adopted in January 2012 in response to the 21st Century Communications and Video Accessibility Act (CVAA). The Order on Reconsideration and Further Notice has now been published in the Federal Register, and the rules adopted in the Order are set to take effect on August 1, 2013. For those who would like a refresher on the CVAA and the IP requirements, you can find my previous posts on the subject here and here.

In the Further Notice adopted simultaneously with the Order, the Commission asked for comment on imposing “closed captioning synchronization requirements for covered apparatus, and on how DVD and Blu-ray players can fulfill the closed captioning requirements of the statute.” Based on the publication of the Further Notice in the Federal Register, comments on the Further Notice are now due on September 3, 2013, and reply comments are due September 30, 2013.

The bulk of the Order is largely a response to three Petitions for Reconsideration filed in connection with last year’s Report and Order, which adopted rules governing the closed captioning requirements for owners, providers, and distributors of IP-delivered video programming, as well as the closed captioning capabilities of devices used by consumers to view video programming. The Petitions were filed by the Consumer Electronics Association, TV Guardian, and a coalition of consumer groups, respectively.

Highlights of the FCC’s Order and Further Notice include:

  • Refusing to limit covered devices to those intentionally designed to play back video programming, but clarifying the rule and issuing two class-based waivers in response to requests by the Consumer Electronics Association (CEA) to exclude equipment such as digital cameras and baby monitors;
  • Clarifying that the January 1, 2014, deadline for devices to be equipped to display closed captioned video programming applies to the date of manufacture of the apparatus, and “not to the date of importation, shipment, or sale”;
  • Reaffirming its decision to allow video programming providers and distributors to select either the rendering or pass through of captions to end users; and
  • Delaying a final decision regarding whether video clips (i.e., “excerpts of full length programming”) should be included within the scope of covered programming until more information is collected as part of another public notice that the FCC plans to issue within the next six months.

The CEA had requested that the FCC narrow the applicability of the closed captioning equipment requirements to cover only those devices intended by the manufacturer to receive, play back, or record IP video programming, rather than broadly applying the rules to any device with a video player.

In response, the FCC revised its definition of “apparatus” to make clear that “video players” requiring captioning capability include only those that display “video programming transmitted with sound.” The FCC declined to limit the requirement to only those devices intentionally designed to play back video programming, but clarified its rule and issued two class-based waivers excluding from the requirement equipment such as still digital cameras and baby monitors, which play back consumer generated images and not IP “video programming” as defined by the CVAA.

The following two classes of “apparatus” qualify for the waiver:

(i) devices that are primarily designed to capture and display still and/or moving images consisting of consumer-generated media, or of other images that are not video programming as defined under the CVAA and our rules, and that have limited capability to display video programming transmitted simultaneously with sound … and (ii) devices that are primarily designed to display still images and that have limited capability to display video programming transmitted simultaneously with sound.

The FCC also decided to delay the January 1, 2014 compliance deadline for DVD players that do not render or pass through closed captions. According to the Commission, that extension was granted to give the FCC more time to collect data regarding additional costs that might be imposed by adding IP captioning functionality to low-cost devices like DVD and Blu-ray players. The extension does not apply to other removable media players or to DVD players that already have the ability to caption.

Regarding the TV Guardian Petition, the FCC denied the Petition, which had requested that the Commission prohibit video programming providers and distributors from rendering captions where passing through captions is “technically feasible”, determining that the request was inconsistent with the language of the CVAA. The FCC also noted that the consumer electronics industry “coalesced around the use of HDMI, which permits the use of rendered captions but does not pass through closed captions, meaning that it only conveys captions when they have been decoded and mixed into the video stream.”

The FCC deferred a decision on the main thrust of the third Petition, filed by a number of consumer groups, which questioned why IP video captioning requirements only apply to “full-length programming” that appears on TV with captions and is then distributed via IP to end users substantially in its entirety. The coalition of consumer groups urged the FCC to expand the captioning requirement to also cover “video clips” containing less than a full-length program. The FCC is keeping the record open on this issue until more information is gathered on the captioning of video clips, including the difficulty of doing so, and the degree to which such captioning already occurs voluntarily.

Finally, in the Further Notice, the FCC asked for “further information necessary to determine whether the Commission should impose synchronization requirements on device manufacturers.” What the FCC is asking for here is additional information to determine whether to “require apparatus manufacturers to ensure that their apparatus synchronize the appearance of closed captions with the display of the corresponding video.” In the Report and Order, the FCC had declined to impose synchronization requirements on manufacturers, instead placing the obligation on video programming distributors and providers.

As noted, initial comments on the Further Notice are due September 3, 2013, with reply comments due on September 30, 2013. The issues raised in the proceeding are obviously complex, so those who wish to file comments should start preparing sooner rather than later.

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Last month, the FCC issued its latest annual Notice of Proposed Rulemaking (NPRM) as well as a Further Notice of Proposed Rulemaking (FNPRM) containing regulatory fee proposals for Fiscal Year (FY) 2013. Those who wish to file comments on the FCC’s proposed fees must do so by June 19, 2013, with reply comments due by June 26, 2013. The NPRM proposes to collect just under $340 million in regulatory fees for FY 2013.

The FCC indicates that this year’s Congressional budget sequester reduced FCC salaries and expenditures by $17 million but that the sequester does not impact the collection of regulatory fees. According to the NPRM, this is because the sequester does not change the amount Congress required the FCC to collect in the FY 2012 appropriation (and continued in effect in FY 2013 by virtue of the Further Continuing Appropriations Act in 2013).
The NPRM seeks comments on adoption and implementation of proposals to reallocate the Agency’s regulatory fees based on the matters actually worked on by current FCC full time employees (FTEs) for FY 2013 to more accurately assess the costs of providing regulatory services to various industry sectors and to account for changes in the wireless and wireline industries in recent years. Understanding that a modification of its current fee allocation method based on FTE workload will result in significantly higher fees for some fee categories, the NPRM proposes to potentially cap rate increases at 7.5% for FY 2013.
The FCC’s NPRM also asks for comment on the following:

  1. Combining Interstate Telecommunications Service Providers (ITSPs) and wireless telecommunications services into one regulatory fee category and using revenues as the basis for calculating the resulting regulatory fees;
  2. Using revenues to calculate regulatory fees for other industries that now use subscribers as the basis for regulatory fee calculations, such as the cable industry;
  3. Consolidating UHF and VHF television stations into one regulatory fee category;
  4. Proposing a regulatory fee for Internet Protocol TV (IPTV) equivalent to cable regulatory fees;
  5. Alleviating large fluctuations in the fee rate for Multiyear Wireless Services; and
  6. Determining whether the Commission should modify its methodology for collecting regulatory fees from those in declining industries (e.g., CMRS Messaging).

In the FNPRM, the FCC seeks comment on the how to treat, for regulatory fee purposes, services such as non-U.S.-Licensed Space Stations, Direct Broadcast Satellites and broadband.
The FCC also notes that it is seeking to modernize its electronic filing and payment systems. As a result, beginning on October 1, 2013, the FCC will no longer accept paper and check filings for payment of Annual Regulatory Fees. What that means is that this year’s regulatory fee filing is likely the last time that regulatory fees can be paid without using electronic funds.
We will be publishing a full Advisory on the FY 2013 Regulatory Fees once they are adopted (likely this summer). You may also immediately access the FCC’s FY 2013 proposed fee tables attached to the NPRM, in order to estimate, at least approximately, the size payment the FCC will be expecting from you this fall.

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A few minutes ago, the FCC issued a Public Notice granting a thirty-day extension of the deadlines for submitting comments and reply comments in response to the FCC’s April 1, 2013 Public Notice seeking input on whether the Commission should make changes to its current broadcast indecency policies. Comments and reply comments were originally due on May 20 and June 18, 2013, respectively, but have now been extended to June 19, 2013 (comments) and July 18, 2013 (reply comments). The extension was granted in response to a Motion filed by the National Association of Broadcasters on April 26, 2013.

Scott Flick of our office posted a detailed analysis of the Public Notice early last month. To refresh your memory, the Public Notice (jointly released by the FCC’s Enforcement Bureau and General Counsel’s Office) was issued in response to FCC Chairman Genachowski’s request that FCC staff review the “Commission’s broadcast indecency policies and enforcement to ensure they are fully consistent with vital First Amendment principles.”

With respect to guidance for parties planning to file comments, the quoted language below from the Public Notice describes the matters on which the FCC is seeking comment:

  1. [W]hether the full Commission should … treat isolated expletives in a manner consistent with our decision in Pacifica Foundation, Inc., Memorandum Opinion and Order, 2 FCC Rcd 2698, 2699 (1987) (“If a complaint focuses solely on the use of expletives, we believe that . . . deliberate and repetitive use in a patently offensive manner is a requisite to a finding of indecency.”)?
  2. Should the Commission instead maintain the approach to isolated expletives set forth in its decision in Complaints Against Various Broadcast Licensees Regarding Their Airing of the “Golden Globe Awards” Program, Memorandum Opinion and Order, 19 FCC Rcd 4975 (2004)?
  3. As another example, should the Commission treat isolated (non-sexual) nudity the same as or differently than isolated expletives?

The Public Notice also states that parties are invited “to address these issues as well as any other aspect of the Commission’s substantive indecency policies.” As Scott pointed out in his analysis last month, this final question appears to open the door to a broader review of indecency doctrine than the FCC has engaged in for quite some time.

Given the controversy the FCC’s indecency policies have historically generated, you can expect to see plenty of comments filed on June 19 and reply comments on July 18 by parties on all sides of this issue. As the FCC moves toward new leadership with the departure of Chairman Genachowski, the FCC’s indecency enforcement policies could take some interesting turns.

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The FCC’s revised rules for its Experimental Radio Services (“ERS”) were published in today’s Federal Register, and become effective on May 29, 2013 (except for several rules that contain new or modified information collection requirements, which require further approval by the Office of Management and Budget). These revised rules allow parties, including manufacturers, entrepreneurs, and students, to engage in a wide variety of experiments involving radio spectrum, including, for example, technical demonstrations, equipment testing, limited market studies, and development of radio techniques. The FCC’s revisions streamline and modernize the ERS rules, allowing parties to more quickly develop new technologies and products for the marketplace.

One of the primary changes to the rules is the creation of three types of ERS licenses: (1) Program Licenses; (2) Compliance Testing Licenses; and (3) Medical Testing Licenses. An applicant for a license must demonstrate in its application that it meets the eligibility requirements, must provide a certification of radio frequency (RF) expertise or partner with another entity with such expertise, and must explain the purpose of its experiment. Each license has a term of five years and is renewable.

Under a Program License, the license holder is permitted to conduct an ongoing program of research and experimentation under a single authorization without having to obtain prior FCC consent for each distinct experiment or series of unrelated experiments, as would have been required under the FCC’s prior rules. Eligibility is limited to colleges, universities, research laboratories, manufacturers of radio frequency equipment or end-user products with integrated radio frequency equipment, and medical research institutions. Authorized entities must provide a “stop buzzer” point of contact, identify the specifics of each proposed experiment in advance of the testing on a public web database established by the FCC, and post a report detailing the results of each experiment upon completion of the experiment (A “stop buzzer” point of contact is a person who can address interference concerns and cease all transmissions immediately if interference occurs).

A Compliance Testing License allows a test lab to conduct testing for FCC equipment authorizations. Such licenses are available to labs that are currently recognized for RF product testing as well as any other lab that the FCC finds has sufficient expertise to undertake such testing. Unlike a Program Licensee, a compliance testing licensee does not have to identify a “stop buzzer” point of contact, provide any notification period prior to testing, or file any narrative statement regarding test results. Testing is limited to those activities necessary for product certification.

The third type of experimental license is a Medical Testing License. This license allows an eligible entity to conduct clinical trials of medical devices (i.e., a device that uses RF wireless technology or communications functions for diagnosis, treatment, or patient monitoring). Only health care facilities (defined as hospitals and other establishments that offer services, facilities and beds for beyond a 24-hour period in rendering medical treatment, as well as institutions and organizations regularly engaged in providing medical services through clinics, public health facilities, and similar establishments, including government entities and agencies) are eligible for this type of experimental license. Medical devices tested under a Medical Testing License must comply with the FCC’s Part 15, 18 and 95 rules. Authorized health care entities must provide a “stop buzzer” point of contact and also follow the same notice and reporting requirements as Program Licensees. A Medical Testing Licensee is required to file a yearly report with the FCC on the activity that has been performed under the license.

The FCC’s other changes to its ERS rules include:

  • consolidating all of the experimental licensing rules into Part 5 of the FCC’s Rules;
  • consolidating its rules regarding marketing of unauthorized devices;
  • allowing demonstrations in residential areas of devices not yet authorized, so long as the relevant spectrum licensee is working with the device manufacturer;
  • permitting, without an experimental license, the operation of devices not yet authorized, so long as the devices are operated as part of a trade show demonstration and at or below the maximum power level permitted for unlicensed devices under the FCC’s Part 15 rules;
  • allowing more flexible product development and market trials;
  • standardizing and increasing the importation limit for devices that have not yet been authorized to 4,000 units; and
  • codifying the existing practice of allowing RF tests and experiments conducted within an anechoic chamber or Faraday cage without the need for obtaining an experimental license.

Parties interested in learning more about the FCC’s revised ERS rules should contact their communications counsel for advice.

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Recently, TVNewsCheck.com ran a short item noting that a large broadcast group (not a network owned and operated group) and a large multichannel video distributor (MVPD) successfully concluded carriage negotiations. There was no interruption of service. Given the successful outcome, I was surprised to see that someone posted a comment regarding the piece saying the deal illustrates why the FCC should tighten its broadcast ownership rules. No matter how many times I read comments of this sort, I am perplexed that people actually believe it’s a good thing for the government to mandate that broadcasters be the underdogs in all major negotiations that impact the quality and availability of broadcasters’ programming. If anything, government policy should encourage broadcasters to grow to a scale that is meaningful in today’s complex television marketplace. Not one of the other major distributors makes its programming available for free.

If independent (non-O&O) broadcasters aren’t permitted to achieve a scale large enough to negotiate effectively with upstream programmers and downstream distributors, you won’t have to wait long see high cost, high quality, high value programming available for free to those who choose to opt out of the pay TV ecosystem. It’s much better to have two, three or four strong competitors in each market, owned by companies that can compete for rational economics in the upstream and downstream markets, than to have eight or more weak competitors, few of which can afford to invest in truly local service or negotiate at arms-length with program suppliers and distributors.

For those who have not been paying attention, the television market has changed profoundly in the past 20 years. The big programmers and the big MVPDs have gotten a whole lot bigger. The largest non-O&O broadcast groups have grown too, but not nearly as much. Fox, Disney/ABC, NBCU and the other programmers are vastly bigger companies with incomparable market power vis-a-vis even the largest broadcast groups. The same is true of the large MVPDs, which together serve the great majority of television households.

There’s nothing inherently bad about big content aggregators and big MVPD distributors. And anyway, they are a fact of life. Despite their size, each is trying to deliver a competitive service and deliver good returns for shareholders. That’s what they are supposed to do, and in general (with a few exceptions) they serve the country well. But again, they are much, much larger than even the largest broadcast groups. If you believe that having a viable and competitive free television option is a good thing, that’s a problem.

So in response to the suggestion that the FCC further limit the scale of broadcasters, I reply: why does the government make it so damn hard for the only television service that is available for free to bargain and compete with vastly larger enterprises that are comparatively unregulated?

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As our readers are aware, we did a great deal of reporting before and after the first-ever Nationwide Emergency Alert System (EAS) Test conducted on November 9, 2011. The purpose of that test was to assess the readiness and effectiveness of the system in the event of an actual national emergency. Broadcasters, as well as cable, satellite, and wireline providers across the country (EAS Participants), all took part in the test. For a quick refresher, see my previous posts on the test here, here, here, here, and here. Late this past Friday, the FCC’s Public Safety and Homeland Security Bureau released a report summarizing the outcome of the national test entitled: “Strengthening the Emergency Alert System (EAS): Lessons Learned from the Nationwide EAS Test”.

As the FCC and FEMA have made clear on numerous ocassions, the national EAS test was not intended to be a pass or fail event, but was to be used to identify and address the limitations of the current EAS. The Report concludes that the national EAS alert distribution architecture is sound and that the national test was received by a large majority of EAS Participants and could be seen and heard by most Americans. The results of the test show that more than 80 percent of EAS Participants across the country successfully received and relayed the FEMA test message.

The Report also indicates, however, that there are a number of technical areas where the system can be improved. According to the Report, among the problems that impeded the ability of EAS Participants to receive and/or retransmit the emergency Action Notification (EAN) issued by FEMA, and of the public to receive it, were:

  • Widespread poor audio quality;
  • Lack of a Primary Entry Point (PEP) in an area to provide a direct connection to FEMA;
  • Use of alternatives to PEP-based EAN distribution;
  • The inability of some EAS Participants either to receive or retransmit the EAN;
  • Short test length; and
  • Anomalies in EAS equipment programming and operation.

As a result of its findings, the Report recommends that another nationwide test be conducted after the FCC commences a number of formal rulemaking proceedings seeking public comment on steps to improve EAS related to these and other shortcomings.

In its Report, the Bureau also recommends that, in connection with any future EAS testing, the FCC develop a new Nationwide EAS Test Reporting System to improve the electronic filing of test result data. The Report also encourages the Executive Office of the President to reconvene the Federal EAS Test Working Group to work with Federal partners and other stakeholders to use the results of the test to find ways to improve EAS and plan for future nationwide tests.

Despite the audio problems and other issues identified in the Report with respect to the nationwide EAS test, the first ever test appears to have achieved its goal of helping the FCC, FEMA, and EAS Participants identify areas where EAS can be improved in the event of an actual emergency. If the recommendations outlined in the Report are implemented by the FCC, the public will likely have a number of opportunities during upcoming rulemaking proceedings to provide their input to the FCC on ways to further improve the reliability of the nation’s EAS.

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Marking the end of a winter that has been way too long is an annual rite of Spring for the media industry–the National Association of Broadcasters’ Show in Las Vegas. This year’s Show is taking place from April 6th to the 11th at the Las Vegas Convention Center. The NAB touts the Show as “the world’s largest media and entertainment event covering the development, management and delivery of content across all mediums.” The growing technological and business diversity of the Show is reflected in the NAB’s additional description of the Show as being “home to the solutions that transcend traditional broadcasting and embrace content delivery to new screens in new ways.” That is certainly true, with the diversity of exhibitors covering every sector even tangentially related to media and content production.

Of course, for all that the Show itself is, one of the most compelling reasons to spend a few pleasant April days in Las Vegas is to reconnect with friends and colleagues in the industry, as well as meeting in person a lot of the people that you have previously known only by phone or email.

This year’s Pillsbury contingent includes six of our communications attorneys, including myself, Dick Zaragoza, Lew Paper, Scott Flick, Miles Mason, and Andrew Kersting.

If you see us at the Show, please stop and say hello. You can also reach out to us via email at the Show by clicking on the links above. They take you to our respective bios at Pillsbury, including email addresses.

If you are headed to the Show, we look forward to seeing you there. For those who won’t be there, I’ll be writing a post after the Show summarizing some of the highlights.

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As we have discussed at great length in the past, the FCC’s rules require that certain video programming delivered online be captioned if the programming previously aired on television with captions. The rules kicked in on April 30 of last year, and all video programming that appeared on television with captions after that date is considered “covered Internet Protocol (IP) video” and will ultimately need to be captioned when being shown online.

The first step of the captioning phase-in occurred on September 30, 2012. Since that date, stations have been required to display captioning for prerecorded full-length programming delivered via IP if the programming was first aired on television with captions on or after the April 30 date noted above.

The second phase of the FCC’s IP captioning rules begins March 30, 2013 (a Saturday), at which time the FCC’s IP captioning rules require all live and near-live programming subject to the rules and shown on television with captions to be captioned when delivered online. The FCC’s definition of “live” or “near-live” captures all programming performed simultaneously or recorded within 24 hours of its first transmission to a video programming distributor. Note that as long as they do not constitute “substantially all” of a full-length program, online video clips are currently exempt from the IP captioning rules.

As a result, the question we probably receive most often from clients about online captioning is: what exactly does the FCC mean by “substantially all” of a full-length program? It’s a good question that lacks a precise answer. The FCC intentionally decided not to provide a specific threshold for the length or number of clips aired that would constitute “substantially all” of a program. According to the FCC, it did not see “any evidence that Congress sought to exclude only clips of a certain duration or percentage of the full-length program.”

Parties should keep in mind, however, that the FCC will not allow them to game the system by simply “shaving” off a few minutes or brief segments of a full length program in order to avoid the IP captioning obligation. The FCC emphasized that “if there is clear evidence that an entity has developed a pattern of attempting to use video clips to evade its captioning obligations,” the FCC may find that a rule violation has occurred.

There is of course more to come. The captioning requirements for “full length” and “live or near-live” programming are just the beginning of the new IP captioning obligations being implemented in the near future. The next deadline is coming up soon with the September 30, 2013 requirement that all pre-recorded programming that is edited for Internet distribution be captioned for online viewing. Also, don’t forget there are separate captioning compliance deadlines for captioning of IP video programming that previously aired on television prior to the effective date of the rules, but that is shown again on television with captions after the effective date. Those phased-in captioning requirements are scheduled to take place between March 2014 and March 2016, with progressively shorter periods to caption the programming for IP video after it airs on television with captions.

As was the case with the original broadcast captioning rules, each phase-in “deadline” shrinks the amount of programming exempt from the online captioning requirement while requiring the distributor to tackle ever more complex captioning issues. IP captioning will therefore consume a growing portion of the attention of those posting broadcast video online. The big difference is that broadcast captioning was phased in over eight years (twelve years for Spanish language programming), whereas online captioning is being phased in on a much faster schedule.

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In response to a request by the Coalition for Broadcast Investment (“Coalition”), the FCC, through its Media Bureau, has invited the filing of comments on the question of whether the Commission should now be open to allowing non-citizens and foreign companies to hold more than a 25% equity interest in U.S. radio and television stations. The deadline for filing comments is April 15, with reply comments due by April 30.

The Coalition is comprised of national broadcast networks, radio and television station licensees, as well as community and consumer organizations. It is urging the FCC to publicly commit, going forward, to considering on their individual merits transactions proposing significant foreign investment in broadcast stations, rather than reflexively rejecting foreign ownership above the 25% mark, as the FCC has traditionally done when reviewing broadcast transactions.

But for the Commission’s decades-old refusal to be flexible, the Coalition’s request would not have been necessary as Section 310(b)(4) of the Communications Act states that a broadcast license will not be granted to “any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license.” The very language of the Act therefore indicates that alien ownership above the 25% mark will be permitted unless the FCC specifically finds that such foreign ownership would not, in the particular situation presented, serve the public interest.

Despite the language of the statute, the FCC has routinely declined to consider broadcast-related transactions proposing more than 25% foreign ownership of a broadcast parent company. The Coalition contends that, by considering the merits foreign ownership proposals in excess of the 25% mark, the FCC will encourage “access to additional and new sources of investment capital [which] will benefit the broadcast industry and American consumers by financing advanced infrastructure, innovative services and high quality programming; and by promoting the creation of highly skilled, well-paying jobs” as well as “provide new opportunities for minority businesses and entrepreneurs, whose access to the domestic capital markets has been limited….”

A clear statement by the FCC that it will now review, on the merits, radio and television transactions proposing significant foreign investment in U.S. broadcast stations should send a very constructive signal to the broadcast industry, to potential foreign investors and to U.S. investors looking to syndicate more of their capital needs offshore for U.S. broadcast investments. Such a new openness and flexibility on the part of the Commission will also serve to create a more equitable “access to capital” environment for broadcasters particularly in relation to other forms of media.

Future Commission actions publicly approving, disapproving and conditioning transactions proposing “plus 25%” foreign ownership will, over time, provide the necessary predictability that is so important for investment decision-making. Pillsbury has considerable experience in crafting FCC-friendly ownership/control structures for banks, companies and firms with foreign ownership that wish to invest in U.S. broadcast stations. Action by the Commission on the Coalition’s letter will hopefully simplify and speed the heretofore painstaking process of balancing the return on investment objectives of foreign investors against the need to meet the letter and intent of the FCC’s rules and policies with respect to foreign ownership of U.S. broadcast stations.

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As we all know, it’s easy to complain about the Federal Government these days given the gridlock that currently exists on Capitol Hill, the Sequester, and the looming debt ceiling battle. But let’s give credit where credit is due.

The FCC has revised its Equal Employment Opportunity (EEO) audit letter for all broadcast licensees, and has eased the burden on respondents by eliminating the need to produce copies of each and every job vacancy notice that was sent out to every referral source, allowing stations instead to file only a representative copy of each job opening notice along with a list of the referral sources to which it was sent. In addition, the FCC has changed its audit letter to allow the submission of a single on-air job advertisement log sheet instead of requiring stations to provide multiple log sheets. The letter also states that stations are not required to provide copies of “applicants’ resumes …, company training manuals, posters, employee handbooks, or corporate guidebooks.” While responding to an EEO audit remains a time consuming task, the FCC has at least taken a step in the right direction by better focusing the audit request on the most consequential materials.

The new version of the EEO audit letter was, as required by the FCC’s rules, sent to randomly selected radio and television stations in the past few weeks. The FCC annually audits the EEO programs of approximately five percent of broadcast stations and has released the list of the stations subject to the most recent audit. All stations, whether targeted for this round of audits or not, should carefully review the FCC’s sample audit letter, as it informs stations of what they will need to present when their time comes.

The FCC’s EEO rules require broadcast station employment units with five or more full-time employees to recruit broadly and inclusively for all job openings, and require substantial recordkeeping, periodic reports to the FCC, and the placement of those reports in stations’ public inspection files and on their websites. Broadcasters must also regularly analyze the results of their recruitment efforts to ensure that broad and inclusive outreach is being achieved and must keep detailed records of their recruitment outreach efforts to submit to the FCC in the event of an EEO audit.

For everything you ever wanted to know about ensuring compliance with the FCC’s EEO rules, see our comprehensive and recently updated Client Advisory: “The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters.”

The fact that stations will no longer need to provide multiple ad log sheets or the corporate materials described above will certainly make responding to an audit easier. That said, the FCC’s EEO rules are, and will continue to be, a significant regulatory burden on broadcasters. While broadcasters will not be required to submit as much material to the FCC as part of an EEO audit, they will continue to be required to maintain records extensively detailing their job recruitment efforts. In addition, stations should take note that the FCC’s Public Notice released with the new version of the EEO audit letter seems to indicate that in exchange for the reduced response burdens, the FCC is raising the bar and now expects stations to adopt a standard of “vigorous recruitment.”

Still, despite concerns as to what the FCC means by “vigorous”, it’s nice to see that the FCC is moving in the direction of simplified audits in an effort to actually ease regulatory filing burdens on broadcasters.