Articles Posted in Low Power & Class A Television

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I wrote a while back about the Downside of Downsizing, in which I noted an increasing number of calls from broadcasters who had trimmed their staffs to the bare minimum, only to belatedly discover that the remaining employees lacked either the experience or the time to ensure the station’s compliance with FCC and other regulations. This afternoon, the FCC released seven Notices of Apparent Liability announcing the financial damage that taking your eye off the regulatory ball can have.

The seven NALs (1, 2, 3, 4, 5, 6, 7) all involved Children’s Television violations, with the proposed fines ranging from $25,000 to $70,000. The FCC’s grand total for the afternoon was $270,000 in proposed Children’s Television fines. While the simultaneous release of the forfeiture orders may be meant to send a message about the seriousness with which the FCC views violations of the Children’s Television rules, the FCC has been working hard on Chairman Genachowski’s watch to clear out backlogs of enforcement proceedings of all types, and it may be that these particular cases are merely the latest result of that effort.

What is certainly not a coincidence, however, is the hefty size of these fines. These NALs appear to confirm a recent FCC trend of imposing heavier fines for a variety of regulatory offenses. While cynics might argue that the government just needs the money at the moment, there does seem to be a concerted effort at the FCC to “update” its fine amounts to make violations sufficiently painful that licensees will not view them as merely a cost of doing business. It is also worth noting that while the seven NALs involve a variety of kidvid violations (exceeding commercial limits, program length commercials, failure to notify program guide publishers of the targeted age range of educational programs, failure to place the appropriate commercial certifications in the public inspection file, failure to publicize the existence and location of the station’s Children’s Television reports), they all have one other feature in common: each of the stations confessed its transgressions in its license renewal application.

In addition to giving no quarter for the licensees having confessed their own sins, the NALs are quite stern in assessing the severity of the violations. Noting that human error, inadvertence, and subsequent efforts to prevent the recurrence of such violations are not grounds for reducing the punishment imposed, the NALs apply a strict liability standard, cutting stations no slack even where the violation was based upon a misapplication of the rule (e.g., assessing compliance with children’s commercial time limits based upon a programming hour (4:30-5:30pm) rather than a clock hour (5:00-6:00pm)), where a program-length commercial was caused by a fleeting and tiny/partial glimpse of a program character during a commercial, or where the program-length commercial was caused by network content.

To be clear, the FCC staked out no new legal ground in these decisions, which for the most part apply existing precedent, and the NALs do indicate that some of the stations involved had over 100 kidvid violations. What catches the eye, however, is not just the size of the fines, but the terse manner in which the violations are listed, the defenses rejected, and the fine imposed, with each NAL noting that the base fine for a kidvid offense is $8,000, but that an upward adjustment is merited in this particular case, with the ultimate amount often appearing to have been plucked out of the air. The impression licensees are left with is that the FCC has lost patience in plowing through the backlog of enforcement cases, and there will be little or no room for error in FCC compliance going forward.

It’s good that the broadcast advertising market has begun to resuscitate, as now would be a good time to rehire those FCC compliance personnel, particularly the ones that prescreen children’s television content.

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Given that low power television (LPTV) stations have been trying unsuccessfully for many years to obtain must-carry rights comparable to those enjoyed by full-power stations, it is often overlooked that some LPTVs do, in fact, have carriage rights. However, these must-carry rights are available only to a select few LPTV stations.

Specifically, an LPTV station is “qualified” for mandatory carriage only if: 1) it broadcasts at least the minimum number of hours required of full-power stations by the FCC’s rules; 2) it meets all the obligations applicable to full-power television stations including, among other things, with respect to non-entertainment programming, and provides local news, informational and children’s programming that addresses local needs that are not being met by full-power stations; 3) it complies with interference restrictions consistent with its secondary status; 4) it is located no more than 35 miles from the cable system’s principal headend and delivers a good quality signal to that headend; 5) the community of license of the station and the franchise area of the cable system were both located outside the largest 160 markets on June 30, 1990 and the population of the community of license was not larger than 35,000 as of that date; and 6) there is no full power television station licensed to any community within the county served by the cable system.

The last two criteria are typically the most difficult obstacles for LPTV licensees to overcome, as cable systems are only required to carry LPTVs in the smallest of markets and, even in those areas, only when there is a dearth of full-power stations in the area. While the restrictions are difficult for most LPTV stations to meet, a recent FCC decision shows that it is not impossible. In that case (found here), digital LPTV station WRTN-LD, located just outside of Nashville, Tennessee, was able to convince the FCC, over the objections of Comcast, that the station is a “qualified” LPTV station entitled to must-carry rights on Comcast’s cable system. While Comcast argued that the station is part of the Nashville market and therefore ineligible for must-carry rights, the station was able to demonstrate that its service area was outside the Nashville market and that it met the other qualifying criteria.

This case serves as a reminder to all licensees to investigate options and not merely presume that no help is available at the FCC or elsewhere. For LPTV licensees in particular, a quick review of the LPTV carriage criteria above with respect to their own situation is well worth the effort involved.

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Death, taxes … and FCC annual regulatory fees. Its that time of year again and the FCC has issued its latest annual Notice of Proposed Rulemaking containing regulatory fee proposals for Fiscal Year 2010. Those who wish to file comments on the FCC’s proposed fees must do so by May 4, 2010 with reply comments due by May 11, 2010.
For one of the few times in recent history, the annual fee amount the FCC is proposing to collect is actually less than the amount from a previous year. Consistent with this, and with a few exceptions, most of this year’s fees are the same or less than last year’s fees for all AM, FM, and television stations, as are the fee amounts for LPTV, Class A, translator, booster, and broadcast auxiliary licenses.

One big change in this year’s fee proposals is the elimination of the exemption for digital stations to pay fees now that the DTV transition has ended. Going forward, all digital full-service television stations will be required to pay a full license fee, including those stations that were operating pursuant to digital Special Temporary Authority as of October 1, 2009. It is also important to point out that the Commission is proposing to charge only a single fee for each low power or Class A facility simulcasting in both digital and analog.

The Communications Section will shortly be publishing a full Advisory on the proposed Reg Fees, including fee tables and charts for you to use to calculate your payments that will be due later this year.

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Death, taxes, and ownership reports: all three are unavoidable, but broadcasters had a brief respite from the last one. That respite has now come to an end.

One of the joys of being a broadcast licensee is filing biennial ownership reports detailing the extended ownership structure of each station. These reports used to be called Annual Ownership Reports and were filed, appropriately enough, annually. In an effort to reduce the amount of paperwork flowing between licensees and the FCC, the requirement changed in 1999 from an annual to a biennial one. That created endless confusion, as any particular station’s filing deadline was generally dictated by where it was located. Radio stations in one state would file by April 1 of odd-numbered years, while radio stations in a different state would be required to file by June 1 of even-numbered years. In fact, even TV and radio stations in the same state were required to file in different years.

Because of exceptions to the general rule on filing deadlines (too boring to discuss here), even the FCC had difficulty determining whether a station had been properly filing its ownership reports on time. As a result, the FCC adopted new filing rules in May 2009 establishing November 1 of odd-numbered years as the national ownership report filing date for all commercial broadcast stations. It also introduced a new form requiring more detailed information than in the past, required formerly exempt entities to file reports, and required that the information be entered electronically and repeatedly into the FCC’s filing system for each attributable owner in the ownership chain.

Previously, licensees with complex ownership structures would create a single exhibit describing the complete ownership structure and other media ownership interests, which was then attached to the ownership report for every entity in the chain of ownership. Because the new electronic ownership report form would not allow such attachments, stations (well, let’s be honest; station’s lawyers) were required to reenter the data for each and every ownership report. The reports for even midsize station groups could take months to complete. Initially, the FCC postponed the filing deadline (twice!) to give licensees time to fill out the voluminous reports, but as the FCC’s electronic filing system started to whimper from the volume of data being entered, the FCC postponed the deadline until the form could be reworked to solve the worst of the problems. For those interested, you can read our advisories and alerts from the time here, here, here, here, here, and here (you begin to appreciate the scope of the problem!).

A few hours ago, the FCC announced that a revamped ownership report form is now available which resolves the repetitive data entry issue by incorporating a spreadsheet that, once filled out, can be copied into multiple ownership reports. With the availability of the new form, the FCC also announced that all commercial broadcast stations, including Class A and LPTV stations, must file their reports on the new form by July 8, 2010. For those interested in the details of the new Form 323 and spreadsheet, you can read our Client Alert on the new form, and ponder whether a similar eight month postponement of death or taxes might also be possible.

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4/8/2010
The FCC’s Media Bureau has announced that a new version of the Biennial Ownership Report Form for commercial broadcast stations, FCC Form 323, will be available on its website as of April 9, 2010. All commercial broadcast station owners must file their biennial ownership reports using the new form by July 8, 2010. However, the data used to complete the form must be accurate as of November 1, 2009.

The FCC originally announced its intent to implement a new version of the Form 323 in an Order released in May 2009 as part of its Promoting Diversification in the Broadcasting Services proceeding. The revision required, among other things, that each holder of a direct or indirect attributable interest in a licensee secure an FCC-issued Federal Registration Number (“FRN”). The revision also mandated that information regarding attributable interest holders and their other broadcast interests be reported repeatedly and in a precisely structured manner. As a result, the number of reports and the time to complete each report increased dramatically for many broadcasters with the ultimate result that the FCC’s electronic filing system ground to a near halt and did not reliably save information entered into it. Based on these technical difficulties, the FCC stayed the filing obligation until it could improve the functioning of the form to account for these difficulties.

The FCC sent its revisions to the form to the Office of Management and Budget (“OMB”) for approval on March 25, and OMB approved the modified form on March 26. The revised form uses a new XML Spreadsheet template that will allow information to be entered into the spreadsheet and then uploaded to the form, thereby reducing the time and effort needed to enter the data. The spreadsheet must be downloaded from the FCC form and comes with detailed instructions regarding the proper use of the XML Spreadsheet. Of particular note are the following:

  • The XML Spreadsheet comes with 25 empty rows for data entry that contain embedded validation codes necessary for the proper functioning of the form. Any licensee needing more than 25 lines must copy and paste the original 25 lines as many times as necessary and not create new lines.
  • The XML Spreadsheet must be saved with an .xml extension, not the .xls or .xlsx extensions that the Excel program will assign by default.
  • Licensees must not change or delete any data in Cell B1.
  • Information must be entered in all capital letters.

The new version of the form also retains the requirement that each attributable interest holder secure an FRN. The instructions state that where, after a good faith effort, a licensee is unable to secure an interest holder’s social security number, which is needed to complete the FRN registration process, a button on the form will allow the licensee to secure a Special Use FRN. The instructions to the form state that the Special Use FRN can only be used for the Biennial Ownership Report filing, and not for any other filing, such as a post-consummation Ownership Report filing.

The Commission’s May 2009 Order also adopted November 1 as a new uniform reporting date for all commercial stations nationwide, regardless of the station’s license renewal filing anniversary (the deadline previously used by the FCC). Because the original November 1, 2009 filing requirement was stayed while the form was revised, the reports filed by the new July 8, 2010 deadline must still reflect the ownership data as it existed November 1, 2009.

The substantial difference in time between the new filing deadline and the time for which ownership information is being reported leads to some interesting questions. For example, where a station has been sold since November 2009, should the report be filed under the name of the new licensee or the prior licensee. If it is to be filed by the new licensee, how will the FCC deal with the fact that the new licensee may not have any personal knowledge of the prior licensee’s November 2009 ownership structure? These questions may be answered by a follow up public notice from the FCC, but if not, we will be pursuing them with the FCC’s staff.

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3/25/2010
Amendments must be filed by May 24, 2010. A $705 filing fee is required.

The FCC released a Public Notice today identifying several hundred pending applications for new analog LPTV or TV Translator stations that must be amended to specify digital operation. A copy of the FCC public notice is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-10-496A1.pdf. The Public Notice indicates that applications that are not amended will not be processed. The amendments must be filed electronically, along with a filing fee of $705.00 per application. Most of the listed applications were filed in a window held in 2000 and were filed in paper. The deadline to amend these applications is May 24, 2010.

The Public Notice states that this action is being taken in furtherance of the nationwide transition to digital television. However, the staff’s National Broadband Plan released last week urged the FCC to set a dead¬line by which all analog LPTV and TV Translator stations must convert to digital operation. This action appears to be a first step in that process. Accordingly, LPTV and TV Translator stations should be alert to the possibility of a further Public Notice establishing a similar transition requirement for existing stations.

A PDF version of this article can be found at Pending Applications for New Analog Low Power Television and TV Translator Stations Must Be Amended to Specify Digital Operation.

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This afternoon, the Commission released an Order announcing that, due to technical difficulties, it was temporarily suspending the use of the new FCC Form 323 and, as a consequence, was postponing the January 11, 2010 deadline for the filing of Biennial Ownership Reports for commercial broadcast licensees. The Commission stated that it would announce the reactivation of the new form and the new filing deadline in a subsequent Public Notice. The Order states that the Commission “will temporarily suspend the ability to start a new biennial Form 323 during this interim suspension period but will allow filers to complete and file forms that they have already started should they wish to do so.” The Order also states that the new filing deadline will be at least 90 days from the date that the new form is made available for new biennial filings.

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December 2009
Today, the FCC released a Public Notice announcing that as of December 9, 2009, the new FCC Form 323 will become available online in the FCC’s CDBS filing system.

Additionally, the FCC announced the availability of a “Special Use FRN” option in reporting attributable interest holders on the new FCC Form 323. The FCC stated that if a filer “is unable to obtain an FRN for any specific individual required to be reported on Form 323, the electronic form contains a mechanism for generating an interim ‘Special Use FRN’ solely for the purposes of completing the form.” The Special Use FRN is only to be used in filing biennial ownership reports on FCC Form 323 and may not be used for any other purpose at the FCC. According to the Public Notice, this option should be used only when necessary and filers should use their “best efforts” to obtain FRNs from all attributable interest holders. The FCC indicates that those who take advantage of the Special Use FRN are still expected to later obtain a “fully compliant” FRN which must be used in all future biennial ownership report filings.

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November 2009
In a Public Notice released by the FCC today, the Media Bureau has announced that it has extended to January 11, 2010, the prior December 15, 2009 deadline for commercial radio and television broadcast station licensees to file their Biennial Ownership Reports on revised FCC Form 323.

This announcement comes as a great relief to licensees of commercial broadcast stations given that the electronic version of revised FCC Form 323 is not yet available on the FCC’s CDBS system for uploading of data.

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