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In a move that would have once been stunning, but which now was so expected as to be anticlimactic, the FCC today voted to eliminate the Main Studio Rule.  In doing so, it also eliminated various associated requirements such as the mandate that a station’s main studio be staffed during normal business hours with at least two employees (one management, one staff), and that it have the capability to locally originate programming.  The FCC did require that stations eliminating their main studio make any part of their public file that is not yet online available to the public during normal business hours “at an accessible place within its community of license.”  It also required stations to ensure that community members can continue to reach the station by telephone without cost, typically by maintaining a local or toll-free number.

Even though the FCC eliminated the rule on its own motion rather than in response to a petition (the times they are a-changin’ at the FCC), the move was not without controversy, with Commissioners Clyburn and Rosenworcel voting against the change.  Both expressed concern that allowing a station to close its local main studio would forever sever the intimate connection between the station and its community.  That is not a concern to be taken lightly, as the close connection between stations and their communities is what has made broadcasting unique among its many competitors.

Realistically, however, the elimination of the rule will not mark the elimination of main studios.  Main studios did not originally arise from regulatory fiat, but from practicality.  In the early days of radio, when pressure from musicians’ unions caused many radio stations to ban the airing of recorded music, main studios were a necessity.  There were no satellites, fiber feeds, or microwave links to relay programming long distances, so stations had to create programming under their own roof.  Even those stations that did play records had to have a place to play them close to the transmitter.  Early telephone lines were noisy, expensive, unreliable, and depending on your location, possibly unavailable.

But technology marched on.  One of my fun experiences as a young lawyer was representing one of the oldest radio stations in the world and seeing the antique sound lathes used to cut grooves in disks so large you could barely get your arms around them.  Programs were “syndicated” by physically transporting these disks around the country from station to station.  Even with this advance in technology, however, stations still had to have a place near their transmitter to play the disks, so by definition, every station had some local program origination capability.

As wireline connections around the country became more ubiquitous and reliable, and radio networks began to grow, the main studio changed with it.  No longer did every minute of programming need to be produced at the transmitter site; it could be relayed from long distances.  It was during this period, specifically 1939, that the FCC created the Main Studio Rule, forever freezing in bureaucratic amber what a main studio should look like.

Since then, a thousand technological advances have changed broadcasting (one of them being the advent of commercial TV).  Equipment became smaller, more reliable, and automated.  Microwave, satellite, and now Internet transmission made program distribution to stations easy and relatively inexpensive.  Hard-drive based music servers allowed diverse program schedules to be created and aired on radio stations without anyone needing to sit at a turntable flipping an LP every three minutes.  Relieved of these mechanical duties, on-air talent could focus all their energies on connecting with their audience rather than “tending” the station and its equipment.  And because of the ease with which audio and video can be relayed, that on-air talent could now do all of that from nearly anywhere in the world.  The days of having to be within a few hundred feet of the transmitter at all times are long gone.

Of course, that’s the operational side of the equation.  One of the reasons the Main Studio Rule was created was to “enable members of the public to participate in live programs and present complaints or suggestions to the stations.”  However, the wonder of many of the technologies discussed above is not that they exist, but that they are sufficiently inexpensive that not only stations but audiences are using them.  Once, appearing on a live radio program would have required a trip to the main studio.  Later, calling in to a live network program in New York from Kansas would have been so expensive as to likely exceed the value of any prize you might win.

That problem was first solved with toll-free calling to the distant studio — a technology that came on the scene 25 years after the Main Studio Rule was created.  Then toll-free numbers were supplanted by Voice-Over-Internet-Protocol (VOIP) equipment and cellphones that eliminated the need to pay separate long distance charges.  That capability was then improved upon by Skype and other services that allowed viewers and listeners to appear aurally and visually anywhere in the world with a broadband connection.

As for listeners being able to “present complaints or suggestions to the stations,” if toll-free numbers didn’t address that, email certainly did.  And if not email, then texts and social media.  I would be surprised to hear if there is a single station in the country that gets more main studio visits in a year than it receives messages via social media in a day.

So with the elimination of the Main Studio Rule will main studios just disappear?  Hardly.  They’ll just look less like 1939.

For most stations, main studios will continue to be useful hubs for organizing programming and operations.  They just won’t all need to look and operate the same.  Stations emphasizing a hyper-local format will have main studios so sophisticated that the original drafters of the Main Studio Rule would be in awe; a local studio with capabilities far beyond what any national radio network had in 1939 or afterwards.

Other stations, for example those whose formats focus on importing high-quality regional or national programming and distributing it locally, will have main studios with topnotch communications and automation gear, but probably no employee staring at the front door all day just in case someone shows up to see the public file (which is or soon will be online).  We live in the age of optimization, and main studios will be optimized to connect with a station’s audience, not to meet a 1939 conception of what a main studio should look like.

Of course, we have to be realistic.  Some stations will certainly shut down their main studio (particularly if we define a “main studio” as a place of daily program origination) because they believe they can operate more efficiently without that affectation of early radio.  There will also be those that close their main studio to reduce operating costs to the greatest extent possible.  In an era when competition from the Internet and other media has caused numerous rural stations to shut down and mail their licenses back to the FCC, allowing a station to operate without a main studio certainly seems preferable to forcing it to go dark because it can’t meet studio expenses.

And in that regard, perhaps it’s time to acknowledge what the Main Studio Rule really was — a government mandate to maintain a rigid brick-and-mortar presence in an Internet Age.  It’s existence hindered stations from evolving and adapting to the rapidly changing business strategies of their many non-broadcast competitors.  Of course the analogy doesn’t stop there.  Just as most people like the idea of a physical store where they can go and handle the merchandise, they like the idea of a main studio — a place where, if they ever felt like it, they could visit and see the product being created.  Of course, many of the people that like the idea of having a physical store buy everything online, and many that like the idea of a traditional main studio are streaming their music and video from non-broadcast sources.

Broadcasters could perhaps afford the luxury of having a formal main studio designed to suit the FCC when they were the only game in town, but that was then, and this is now.  Most broadcasters will continue operating a main studio in one form or another, and if viewers and listeners find the programming from such stations is better and tune in accordingly, there will be plenty of stations with elegant main studios for the foreseeable future.  If, however, the stations that divert those funds to program acquisition or other initiatives are the ones attracting larger audiences, then, and only then, will the era of the main studio finally draw to a close.

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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:

Headlines:

  • Noncommercial TV Broadcaster Agrees to $5,000 Consent Decree for EEO Violations
  • Taxi Company Fined $13,000 for Failing to Operate a Private Land Mobile Radio Station on a Narrowband Basis and Other Violations
  • FCC Issues Notices of Unlicensed FM Station Operation to Five Individuals

EEO Violations Lead to $5,000 Settlement with FCC

The FCC entered into a Consent Decree with a Maryland noncommercial TV broadcaster to resolve an investigation into whether the broadcaster violated the FCC’s equal employment opportunity (“EEO”) Rules.

Under Section 73.2080(c)(1)(ii) of the FCC’s Rules, licensees must provide notices of job openings to any organization that “distributes information about employment opportunities to job seekers upon request by such organization,” and under Section 73.2080(c)(3), must “analyze the recruitment program for its employment unit on an ongoing basis.” In addition, Section 1.17(a)(2) requires that licensees provide correct and complete information to the FCC in any written statement.

The FCC audited the broadcaster for compliance with EEO Rules for the reporting period June 1, 2008 through May 31, 2010. During the audit, the FCC asserted that the broadcaster filled 11 vacancies at its TV stations without notifying an organization that had requested copies of job announcements. The FCC then concluded that the notification failure revealed a lack of self-assessment of the broadcaster’s recruitment program. Finally, the FCC asserted that the broadcaster provided incorrect information to the FCC when it submitted two EEO public file reports stating that it had notified requesting organizations of vacancies, but later admitted those statements were incorrect.

The FCC subsequently issued a Notice of Apparent Liability for Forfeiture proposing a $20,000 fine. The broadcaster avoided the fine by instead entering into a Consent Decree with the FCC under which the company agreed to make a $5,000 settlement payment to the government, appoint a Compliance Officer, and implement a three-year compliance plan requiring annual reports to the FCC and annual training of station staff on complying with the broadcaster’s EEO obligations.

FCC Fines Taxi Company $13,000 for Failing to Operate a Private Land Mobile Radio Station on a Narrowband Basis and Other Violations

The FCC fined a California taxi company $13,000 for failing to operate a private land mobile radio (“PLMR”) station in accordance with the FCC’s narrowbanding rule, failing to transmit a station ID, and failing to respond to an FCC communication.

Section 90.20(b)(5) of the FCC’s Rules requires licensees to comply with applicable bandwidth limits, and Section 1.903 requires PLMR stations to be “used and operated only in accordance with the rules applicable to their particular service . . . .” In 2003, the FCC adopted a requirement that certain PLMR station licensees reduce the bandwidth used to transmit their signals from 25 kHz to 12.5 kHz or less by January 1, 2013. Continue reading →

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Earlier this week, the FCC and FEMA released a final reminder that this year’s nationwide test of the Emergency Alert System will occur today, September 27, 2017 at 2:20 PM Eastern Time.  The test will be transmitted in both English and Spanish and broadcasters will choose which one to air in their communities.

The agencies had reserved October 4th as a backup date for the test in the event that an emergency was ongoing that could lead to confusion around the test.  They decided not to fall back on that option despite Hurricanes Harvey, Irma and Maria recently causing much destruction.  They did, however, acknowledge the disruption those events caused by giving broadcasters in the affected areas additional time to meet their various filing obligations connected to the national EAS test.

Stations unaffected by the hurricanes must file a Form 2, the day-of-test reporting form, via the FCC’s Emergency Test Reporting System by 11:59 PM Eastern Time tonight (September 27).  Stations are allowed to make any corrections to their earlier-filed Form 1 submissions by that time as well.  More detailed information on a station’s performance during the test, including any issues encountered, must be submitted electronically on Form 3 no later than November 13, 2017.

As noted above, broadcasters in hurricane-affected areas (Florida, Puerto Rico and the U.S. Virgin Islands, as well as portions of Alabama, Georgia, Louisiana, and Texas) have more flexibility, and may make corrections to their Form 1, and file Form 2, as late as November 13, the national deadline for filing Form 3.

Unrelated to those Form 1, 2 and 3 filings, stations are also required to report to their State Emergency Communications Committee by November 6, 2017 any steps they have taken to distribute EAS content in languages other than English to their non-English speaking audiences.  While the FCC has not mandated the precise information to be reported, it has suggested that stations provide:

  • a description of the steps taken to make EAS content available to speakers of other languages;
  • a description of any plans made to do so in the future, along with an explanation of why or why not; and
  • any additional information that would be useful to the FCC, such as state-wide demographic information regarding languages spoken and resources used or needed to originate EAS content in languages other than English.

The State Emergency Communications Committees are then required to report this information to the FCC within six months.

This is the third nationwide EAS test, and as you would hope, each test seems to go better than the last one as bugs in the alerting chain and equipment are discovered and fixed.  While some might view it as contradictory, the twin hopes of everyone involved in today’s test is that we will eventually have a perfectly functioning national alerting system, and that it will never be needed.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by October 10, 2017, reflecting information for the months of July, August, and September 2017.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station. The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the public inspection file a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.” By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations. The lists also provide important support for the certification of Class A television station compliance discussed below. We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness. Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during the license term. Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs. Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

It should be noted that the FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have fully complete Quarterly Lists or that do not timely place such lists in their public inspection file. The FCC’s base fine for missing Quarterly Lists is $10,000.

Preparation of the Quarterly List

The Quarterly Lists are required to be placed in the public inspection file by January 10, April 10, July 10, and October 10 of each year. The next Quarterly List is required to be placed in stations’ public inspection files by October 10, 2017, covering the period from July 1, 2017 through September 30, 2017. Continue reading →

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This Broadcast Station Advisory is directed to radio and television stations in the areas noted above, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

October 1, 2017 is the deadline for broadcast stations licensed to communities in Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, Saipan, and the Virgin Islands to place their Annual EEO Public File Report in their public inspection file and post the report on their station website. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by October 2, 2017 (because October 1 falls on a Sunday this year, the Form 397 filing deadline rolls to the next business day).

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, 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, participating in 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 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. Nonexempt SEUs must submit to the FCC the two most recent Annual EEO Public File Reports with their license renewal applications.

In addition, all TV station SEUs with five or more full-time employees and all radio station SEUs with more than ten full-time employees must submit to the FCC the two most recent Annual EEO Public File Reports at the midpoint of their eight-year license term along with FCC Form 397—the Broadcast Mid-Term EEO Report.

Exempt SEUs—those with fewer than five 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 The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters published by Pillsbury’s Communications Practice Group. This publication is available at: http://www.pillsburylaw.com/publications/broadcasters-guide-to-fcc-equal-employment-opportunity-rules-policies.

Deadline for the Annual EEO Public File Report for Nonexempt Radio and Television SEUs.

Consistent with the above, October 1, 2017 is the date by which Nonexempt SEUs of radio and television stations licensed to communities in the states identified above, including Class A television stations, must (i) place their Annual EEO Public File Report in the public inspection files of all stations comprising the SEU, and (ii) post the Report on the websites, if any, of those stations. LPTV stations are also subject to the broadcast EEO rules, even though LPTV stations are not required to maintain a public inspection file. Instead, these stations must maintain a “station records” file containing the station’s authorization and other official documents and must make it available to an FCC inspector upon request. Therefore, if an LPTV station has five or more full-time employees, or is part of a Nonexempt SEU, it must prepare an Annual EEO Public File Report and place it in the station records file.

These Reports will cover the period from October 1, 2016 through September 30, 2017. However, Nonexempt SEUs may “cut off” the reporting period up to ten days before September 30, so long as they begin the next annual reporting period on the day after the cut-off day used in the immediately preceding Report. For example, if the Nonexempt SEU uses the period October 1, 2016 through September 20, 2017 for this year’s report (cutting it off up to ten days prior to September 30, 2017), then next year, the Nonexempt SEU must use a period beginning September 21, 2017 for its report.

Deadline for Performing Menu Option Initiatives.

The Annual EEO Public File Report must contain a discussion of the Menu Option initiatives undertaken during the preceding year. The FCC’s EEO rules require each Nonexempt SEU to earn a minimum of two or four Menu Option initiative-related credits during each two-year segment of its eight-year license term, depending on the number of full-time employees and the market size of the Nonexempt SEU.

  • Nonexempt SEUs with between five and ten full-time employees, regardless of market size, must earn at least two Menu Option credits over each two-year segment.
  • Nonexempt SEUs with 11 or more full-time employees, located in the “smaller markets,” must earn at least two Menu Option credits over each two-year segment.
  • Nonexempt SEUs with 11 or more full-time employees, not located in “smaller markets,” must earn at least four Menu Option credits over each two-year segment.

The SEU is deemed to be located in a “smaller market” for these purposes if the communities of license of the stations comprising the SEU are (1) in a county outside of all metropolitan areas, or (2) in a county located in a metropolitan area with a population of less than 250,000 persons.

Because the filing date for license renewal applications varies depending on the state to which a station is licensed, the time period in which Menu Option initiatives must be completed also varies. Radio and television stations licensed to communities in the states identified above should review the following to determine which current two-year segment applies to them:

  • Nonexempt radio station SEUs licensed to communities in Iowa and Missouri must have earned at least the required minimum number of Menu Option credits during the two year “segment” between October 1, 2016 and September 30, 2018, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt radio station SEUs licensed to communities in Alaska, Florida, Hawaii, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, Saipan and the Virgin Islands must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between October 1, 2015 and September 30, 2017, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in Alaska, Florida, Hawaii, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, Saipan and the Virgin Islands must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between October 1, 2016 and September 30, 2018, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in Iowa and Missouri must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between October 1, 2015 and September 30, 2017, as well as during the previous two-year “segments” of their license terms.

Deadline for Filing EEO Mid-Term Report (FCC Form 397) for Radio Stations Licensed to Communities in Alaska, Hawaii, Oregon, Washington, American Samoa, Guam, the Mariana Islands, and Saipan and Television Stations Licensed to Communities in Iowa and Missouri.

October 1, 2017 is the mid-point in the license renewal term of radio stations licensed to communities in Alaska, Hawaii, Oregon, Washington, American Samoa, Guam, the Mariana Islands, and Saipan and Television stations licensed to communities in Iowa and Missouri. If a station in one of these respective groups belongs to a Radio SEU with more than ten full-time employees or a television SEUs with five or more full-time employees, it must electronically file the Form 397 Report by October 2 (as October 1 falls on a Sunday). Licensees subject to this reporting requirement must attach copies of the SEU’s two most recent Annual EEO Public File Reports to their FCC Form 397 Report.

Note that SEUs that have been the subject of a prior FCC EEO audit are not exempt and must still file FCC Form 397 by the deadline. Electronic filing of FCC Form 397 is mandatory. A paper version will not be accepted for filing unless accompanied by an appropriate request for waiver of the electronic filing requirement.

Recommendations

It is critical that every SEU maintain adequate records of its performance under the EEO Rule and that it practice overachieving when it comes to earning the required number of Menu Option credits. The FCC will not give credit for Menu Option initiatives that are not duly reported in an SEU’s Annual EEO Public File Report or that are not adequately documented. Accordingly, before an Annual EEO Public File Report is finalized and made public by posting it on a station’s website or placing it in the public inspection file, the draft document, including supporting material, should be reviewed by communications counsel.

Finally, note that the FCC is continuing its program of EEO audits. These random audits check for compliance with the FCC’s EEO Rule, and are sent to approximately five percent of all broadcast stations each year. Any station may become the subject of an FCC audit at any time. For more information on the FCC’s EEO Rule and its requirements, as well as practical advice for compliance, please contact any of the attorneys in the Communications Practice.

A PDF of this article can be found at Annual EEO Report, October 2017.

 

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[Breaking News: Moments before the release of this post, the FCC issued a Public Notice announcing an extension of time to the end of the government’s fiscal year for regulatory fee payors in areas affected by Hurricanes Harvey and Irma to make their regulatory fee payments.  Regulatees in Florida, Puerto Rico, the US Virgin Islands, and affected portions of Texas, Louisiana, Alabama, and Georgia have until midnight on September 29, 2017 to file and pay their fees.  While that only provides an additional three days to pay, the FCC indicates that anyone needing additional relief can file a request using the Commission’s established deferral/reduction request procedures.]

With the end of the government’s fiscal year comes the obligation to pay the annual regulatory fees that defray the cost of FCC activities for which a separate fee, such as an application processing fee, is not paid.  These activities include, ironically enough, rulemaking and enforcement activities that regulatees might prefer not to fund.

Each year, the FCC is required to conduct a proceeding determining how to allocate the cost of its operations among the various industries and types of entities it regulates.  After soliciting comments on each year’s proposed fees, the FCC releases a final order stating how it will apportion the fees among various regulatee categories for the fiscal year.  Thereafter, it issues a Public Notice announcing the deadline for paying the fees, and releases Fact Sheets for each category of regulatee providing more detailed information about how to pay those particular fees.

Over the course of last week, the FCC released its Report and Order setting this year’s annual regulatory fee amounts and almost immediately thereafter announced that annual regulatory fees are due by September 26, 2017.  It also announced that its Fee Filer system is now open to receive payments.  For Media Bureau regulatees, the FCC released this Fact Sheet setting forth the fees for each class and category of broadcast license.  Licensees subject to the fees must file a report listing the fees they owe through the Fee Filer system and then pay that amount by 11:59 pm (ET) on September 26.

This year’s Regulatory Fee Order contained at least some good news for certain broadcasters in the form of reduced fees.  Specifically, television stations in all market sizes saw modest decreases in their fees over last year, although the FCC continues to question whether there are television stations paying the lower satellite station fee that are not entitled to do so and whether the fee for satellite television stations should be increased substantially next year.

On the radio side, all radio broadcasters with a population served of 75,000 or less also saw a decrease in their fees.  However, that was balanced by an increase in fees for radio stations serving a population of more than 3,000,000, with some of those fees increasing by as much as $5,000.  Radio stations between these two extremes received a mixed bag of increases and decreases, apparently as a result of the FCC’s efforts to make the increments between tiers more proportional.

The Regulatory Fee Order contained particularly good news for some small market “singleton” stations.  The FCC increased the de minimis fee exemption from $500 (it had been $10 before 2014) to $1,000.  When it was $500, the exemption only helped a few licensees of stand-alone translator, booster and low power television stations.  With a $1,000 exemption, many stand-alone AM and some stand-alone FM stations in smaller markets are now also relieved of both the obligation to file the report of fees owed and to pay those fees.  Note that in determining whether the exemption applies, the FCC adds together all of the regulatory fees owed by a regulatee, so a small market licensee will lose the exemption if it has other regulatory fees due that, along with the radio station regulatory fee, add up to more than $1,000.

Regulatees who owe less than $25,000 can pay using a credit card.  Those owing $25,000 or more must use wire transfer, debit card, or bank ACH to pay.  Department of Treasury rules prohibit a single entity from paying more than $24,999.99 to a single government agency in a single day by credit card.  This limit applies whether the payment is made as a single payment or as a series of smaller payments that together add up to $25,000 or more.

Failure to timely pay regulatory fees brings with it a 25% penalty, administrative fees, and should the fees remain unpaid for any length of time, rather merciless fee collection activity from outside collection agencies.  Failure to pay regulatory fees at all (as opposed to paying them late) can bring even greater woes, up to and including loss of license.

So, unless you are in a hurricane-affected area, mark September 26th on your calendar as “Reg Fee Day”.  Like death and taxes, annual regulatory fees have become another certainty of life for those regulated by the FCC.  Unlike death, however, some may qualify for an exemption.

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The FCC announced on Friday afternoon that it would push back the December 1, 2017 deadline for commercial and noncommercial broadcast stations to file their biennial ownership reports.  Rather than opening the filing window on September 1 and closing it on December 1, the FCC will open the window on December 1 and close it on March 2, 2018.  The Commission stressed that it is only changing the filing due date, not the period of time covered by the report.  That is, all reports, regardless of when in the window they are filed, must be accurate as of October 1, 2017.  If a station is sold after October 1, 2017, the former ownership of the station must still be reported when the form is finally filed.

This biennial ownership filing cycle is the first one in which both commercial and noncommercial stations file on the new consolidated filing date, which was to be December 1 of odd numbered years.  In addition, it will be the first one to use new ownership report forms accessed and filed through the FCC’s new Licensing Management System (“LMS”), rather than the CDBS filing system that is being phased out.

In its comments in the FCC’s proceeding to reduce or eliminate regulatory burdens on broadcasters, the NAB had requested that the Commission suspend the December 1, 2017 filing date while it considers comments the NAB and others filed seeking a reduction in the frequency and burden of ownership reporting.  NAB followed that request up with a letter asking that the Commission allow additional time specifically for broadcasters to test the new filing system and revised ownership reporting forms to avoid the debacle that occurred in 2009-2010 when the FCC last updated the form for commercial stations, causing multiple delays and suspensions of the filing deadlines.

In delaying this year’s ownership report filing, the FCC said that it was acting of its own accord to permit adequate time for the integration of the new ownership report forms with the FCC’s LMS filing database.  Whatever the technical issues the FCC faces in that process, there is plenty for broadcasters to do during this delay.  For radio broadcasters, the LMS is an entirely new filing system with which they will need to become familiar.  As broadcasters’ recent experience with the unexpected and dramatic redesign of the Emergency Test Reporting System (ETRS) showed, the learning curve surrounding a new filing system can be very steep and frustrating.

In addition, the FCC requires that all reportable interest holders be identified in the ownership report by one of three types of unique identifiers.  As we have explained before, reportable interest holders must secure a Federal Registration Number (the CORES FRN, not to be confused with the CORES Username and Password needed to access the ETRS), and to do so must provide the FCC with their full Social Security Number.  To address the backlash from those concerned about providing their SSNs, the Commission created a Restricted Use FRN, or RUFRN, that can be used only in ownership reports and requires reporting the interest holder’s name, date of birth, residential address and last four digits of their SSN.  Finally, if an interest holder refuses to release the information needed to secure a CORES FRN or a RUFRN, the licensee may secure a Special Use FRN without revealing any SSN information upon a showing that it made a good faith effort to secure a CORES FRN or RUFRN.

Most recently, the Commission exempted interest holders in noncommercial licensees, many of whom are volunteers, from the CORES FRN/RUFRN requirement going forward, and those licensees may use SUFRNs for their reportable interest holders without having to make a showing of good faith efforts to collect interest holders’ SSNs.

Still, all licensees have some administrative work to do in advance of the ownership report filing, determining which of their interest holders already have a CORES FRN, creating RUFRNs for any interest holders needing them, and determining whether use of the SUFRN is permitted or appropriate for any interest holders.

While the delay will provide broadcasters with more time to address the difficulties of using the new form and filing system, the recent experience with ETRS gives broadcasters plenty to think about as they prepare for their next ownership filing.

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The FCC and FEMA have established September 27, 2017 as the date for the next nationwide test of the Emergency Alert System (EAS). Like last year’s test, all EAS participants must file Form 1 a month before the test.  The Form 1 has been modified, however, requiring information that was not requested previously.  In addition, the FCC’s Emergency Test Reporting System (ETRS) has been revamped so that prior log in codes do not work and the system’s functionality is now unfamiliar to prior users.  As a result, while the Form 1 is technically due next Monday, August 28th, anyone who has not yet started the filing process should begin immediately and aim to finish the process this week.

Abandoning the ETRS log in system from the prior test, the ETRS now relies on log in information from an entirely separate FCC database, the Commission Registration System (CORES). Therefore, the first step in filing the Form 1 in the ETRS is the rather unintuitive step of establishing an FCC Username and Password in the CORES.  While this step might be simple enough in and of itself, it is important to understand that the CORES system confers control of the licensee’s Federal Registration Number (FRN) on the first person to lay claim to it.

Many broadcasters only know the FRN as the number they have to frantically search for every September when paying their Annual Regulatory Fees. But the FRN and password are increasingly used as the log in for many of the FCC’s other filing systems such as the new Licensing Management System that TV stations use for most application filings, the Universal Licensing System which is the licensing system for stations’ wireless facilities like broadcast auxiliaries and business radios, the International Bureau’s filing system for stations’ earth station facilities, and even an alternate log in for the new Online Public Inspection File.  Therefore, every station owner should establish a CORES Username and Password or have their lawyer do so on their behalf, and then claim the role of “Admin” of their FRN, even if someone else will be making their ETRS filings.

Once the licensee has claimed the Admin role for the station’s FRN, the person making the ETRS filings for the station must establish a CORES Username and Password for themselves and request that the FRN Admin associate the licensee’s FRN with their account. Only once all those steps are complete will the person making the ETRS filings be able to even draft the Form 1.

To reach the Form 1, filers should log into the ETRS using their own CORES Username and Password. A message may appear at the top of the page upon logging in saying that no FRNs are associated with the account.  If you think you have in fact associated the FRN with the account, proceed with drafting the Form 1, as the FRN may appear in the pull down menu despite that message.

Information about the station’s transmitter location, EAS equipment, and stations monitored will prefill from the Form 1 filed for the last nationwide test. This year, stations must also provide the location of their EAS receivers.  The FCC is requesting this information to be able to map where signals are received and sent so that it can better understand any communications breakdowns.  Also new this year, stations will see an instruction to file a separate Form 1 for each encoder, decoder or combination unit.  It is likely that most broadcasters have a combination unit and therefore only need to file one Form 1.  However, there may be situations where multiple filings are needed, for example where a cluster of co-owned radio stations share a studio but have to employ separate encoders and decoders to deal with stations in the group having different monitoring assignments.

So if you were procrastinating before filing the Form 1, or tried and were stymied by the FCC’s updated filing system, it’s time to get moving. Monday’s deadline is coming fast.

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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:

Headlines:

  • FCC Proposes $66,000 Fine Against Alaska Noncommercial FM Station for EAS and Other Violations
  • Man Faces $120 Million Fine for “Massive” Robocall Operation
  • FCC Proposes $1,500 Fine Against South Carolina AM Station for Late-Filed License Renewal

Alaska Noncommercial FM Station Faces $66,000 Fine for EAS and Other Violations

The FCC proposed a $66,000 fine against an Alaska noncommercial FM station for a number of violations, including actions that the FCC says “undermine the effectiveness of the Emergency Alert System (EAS).”

Section 11.15 of the FCC’s Rules requires that a copy of the EAS Operating Handbook be located “at normal duty stations or EAS equipment locations when an operator is required to be on duty.” In addition, Section 11.35(a) of the Rules states that EAS participants are responsible for ensuring that EAS equipment, such as encoders and decoders, are installed such that “monitoring and transmitting functions are available during the times the stations and system are in operation.” Also, Section 11.52(d)(1) requires EAS participants to monitor two EAS sources.

A June 2013 FCC inspection of the station’s main studio revealed several violations of the FCC’s EAS Rules. Specifically, the FCC agent found that the station (1) did not have an EAS Handbook; (2) did not have properly operating EAS equipment (because the programming and identification of the station’s EAS device was for another station); and (3) was only monitoring one EAS source.

In addition, the agent found numerous violations of the FCC’s other broadcast rules, including: (1) failure to post a valid license as required by Section 73.1230; (2) failure to maintain a public inspection file as required by Section 73.3527; (3) failure to retain the logs required by Section 73.1840; (4) failure to maintain a main studio staff under Section 73.1125(a); (5) inability to produce documentation designating a chief operator as required by Section 73.1870; and (6) failure to ensure that the station was operating in accordance with the terms of the station authorization or within variances permitted under the FCC’s technical rules, as required by Section 73.1400.

The FCC subsequently issued a Notice of Violation (“NOV”) to the station in August 2013. When the FCC did not receive a response from the station within the 20-day deadline specified in the NOV, the FCC sent a Warning Letter to the station in September 2013, and issued two additional NOVs in November 2013 and April 2016 directing the station “to provide information concerning the apparent violations described in the August 2013 NOV.” Despite signing a receipt for the April 2016 NOV, the station again failed to respond.

The base fine amounts for the apparent EAS violations, broadcast violations, and failures to respond to the NOVs total $11,000, $23,000, and $16,000 respectively. The FCC may adjust a fine upward or downward after taking into account the particular facts of each case. Here, citing the station’s failure to respond to FCC documents of four occasions, the FCC concluded that a 100 percent upward adjustment of the base fine for the failures to respond, or an additional $16,000, was warranted. As a result, the FCC proposed a total fine against the station of $66,000.

FCC Proposes $120 Million Fine for Caller ID Spoofing Operation

A Florida man’s spoofing campaign has earned him a proposed $120 million fine. The man apparently caused the display of misleading or inaccurate caller ID information (“spoofing”) on millions of calls to perpetrate an illegal robocalling campaign.

The Truth in Caller ID Act of 2009, as codified in Section 227(e) of the Communications Act and Section 64.1604 of the FCC’s Rules, prohibits any person from knowingly causing, directly or indirectly, any caller ID service to transmit or display misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value. Continue reading →

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July 2017

This Broadcast Station Advisory is directed to radio and television stations in California, Illinois, North Carolina, South Carolina, and Wisconsin, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

August 1, 2017 is the deadline for broadcast stations licensed to communities in California, Illinois, North Carolina, South Carolina, and Wisconsin to place their Annual EEO Public File Report in their public inspection file and post the report on their station website. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by August 1, 2017.

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, 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, participating in 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 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. Nonexempt SEUs must submit to the FCC the two most recent Annual EEO Public File Reports with their license renewal applications.

In addition, all TV station SEUs with five or more full-time employees and all radio station SEUs with more than ten full-time employees must submit to the FCC the two most recent Annual EEO Public File Reports at the midpoint of their eight-year license term along with FCC Form 397 – the Broadcast Mid-Term EEO Report.

Exempt SEUs – those with fewer than five 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 The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters published by Pillsbury’s Communications Practice Group. This publication is available at: http://www.pillsburylaw.com/publications/broadcasters-guide-to-fcc-equal-employment-opportunity-rules-policies.

Deadline for the Annual EEO Public File Report for Nonexempt Radio and Television SEUs

Consistent with the above, August 1, 2017 is the date by which Nonexempt SEUs of radio and television stations licensed to communities in the states identified above, including Class A television stations, must (i) place their Annual EEO Public File Report in the public inspection files of all stations comprising the SEU, and (ii) post the Report on the websites, if any, of those stations. LPTV stations are also subject to the broadcast EEO rules, even though LPTV stations are not required to maintain a public inspection file. Instead, these stations must maintain a “station records” file containing the station’s authorization and other official documents and must make it available to an FCC inspector upon request. Therefore, if an LPTV station has five or more full-time employees, or is part of a Nonexempt SEU, it must prepare an Annual EEO Public File Report and place it in the station records file.

These Reports will cover the period from August 1, 2016 through July 31, 2017. However, Nonexempt SEUs may “cut off” the reporting period up to ten days before July 31, so long as they begin the next annual reporting period on the day after the cut-off day used in the immediately preceding Report. For example, if the Nonexempt SEU uses the period August 1, 2016 through July 21, 2017 for this year’s report (cutting it off up to ten days prior to July 31, 2017), then next year, the Nonexempt SEU must use a period beginning July 22, 2017 for its report. Continue reading →