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In my last post, I discussed the FCC’s mammoth NPRM asking for public comment on an immense number of issues relating to the planned spectrum incentive auctions. In particular, I noted the challenges faced by both the FCC and commenters in trying to cover so much ground on such complex issues in such a short time. One of the emails I received in response to that post was from an old pro in the broadcast industry who wrote that “I’ve been reviewing the NPRM for 12 days and haven’t finished yet!”
Having heard that message from a number of people, the importance of the NPRM to a great many segments of the communications industry, and the inability of many of our clients to dedicate several weeks to perusing the NPRM, Paul Cicelski and I have drafted a highly condensed summary of the NPRM in a Pillsbury Client Advisory that may be found here. In condensing it, we were mindful of the quote, often attributed to Albert Einstein, that “everything should be made as simple as possible, but not simpler.” While an entirely sensible approach, it would have abbreviated the 205-page NPRM (including attachments) only marginally. So instead, we threw that bit of advice out the window and condensed our summary down to five pages, giving us an industry-leading 41:1 compression ratio.

As a result, the Advisory cannot contain the level of detail found in the NPRM itself (that’s how you cut out 200 pages!), but our hope is that it will make the NPRM’s content accessible to a much broader audience, particularly the many who will ultimately be affected by the FCC’s various auction and repacking proposals. In addition to providing a relatively painless way for those interested to learn more about this proceeding, the Advisory should provide a road map for parties seeking to identify the issues that will most greatly affect them so that they can focus their attention on those specific aspects of the NPRM when preparing comments for the FCC.

Given that the volume of issues to be addressed in the NPRM is so great, and there is literally no way any individual party could cover them all, the best chance for a well-informed outcome in this proceeding is for the FCC to hear from a large number of commenters who, cumulatively, will hopefully touch on most of the key issues in their comments and reply comments. As a reminder, the comment deadline is December 21, 2012, with reply comments due on February 19, 2013. Whether a potential seller in the reverse spectrum auction, a potential buyer in the forward auction, or a television bystander that may be buffeted by the winds of repacking, now is the time to step up and make your voice heard, rather than merely grumbling over the next several years about how the process is unfolding.

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Given that the FCC adopted its Notice of Proposed Rulemaking to establish the parameters of its much-anticipated broadcast spectrum auctions on September 28, 2012, and released the text of that NPRM on October 2, 2012, you would think that the communications industry would now be buzzing over the details of the FCC’s long-in-the-making plan. Instead, from many corners of the industry, there has been stunned silence; not because there were any real surprises in the NPRM, but because the NPRM made clear to those not previously involved in the process the sheer enormity of the tasks ahead.

Also feeding the industry’s muted reaction is the fact that, because there were no surprises, the industry doesn’t know much more now than it did before about how the auctions will be structured. Instead, we are left with many excellent but unanswered questions asked by the NPRM, leaving the auction rules and structure a very ethereal proposition. As the annual deluge of Halloween horror movies reminds us, people are afraid of ethereal entities, and are unlikely to visit the FCC’s cabin in the woods (despite the “big money for spectrum” signs out front) until the FCC is able to remove the dark mystery from this undertaking.

On the one hand, the FCC’s staff deserves immense credit for asking the right questions on what is unquestionably the most complex undertaking the FCC has ever attempted (it makes you long for the simple-by-comparison DTV transition, which only took 13 years to accomplish). On the other hand, asking the right questions meant producing a 140 page, 425 paragraph NPRM, along with an additional 65 pages of appendices and commissioner statements.

The NPRM is a densely packed document with numerous questions and issues raised for public comment in each paragraph. Part of the problem, however, is that in order to get the entire package of materials down to 205 pages total, some of the NPRM’s questions had to be condensed so severely as to make it difficult to discern what precisely the FCC is asking about or proposing. As a result, you will note that a lot of the third-party summaries circulating are short on condensed narrative and long on direct quotes from the NPRM–often a sign that the person drafting the summary gave up on trying to figure out what the NPRM was trying to say, and decided to let the reader take a crack at it instead.

Comments on the NPRM are due on December 21, 2012, with Reply Comments due on February 19, 2013. While the FCC indicates that it intends to hold the spectrum auctions in 2014, keep in mind that once the Reply Comments are filed, if the FCC were able to resolve a paragraph’s worth of issues each and every day the FCC is open for business after that date, it would resolve the final issues in October of 2014. It would then need to release an order adopting the final policies and rules, and begin the process of setting up the reverse auction (for broadcasters interested in releasing spectrum) and the forward auction (for those interested in purchasing that spectrum for wireless broadband). Completing that process before 2015 will be extremely challenging.

Even this understates the actual time that will be required for the FCC to have a shot at a successful auction. Critically important to the success of such auctions is providing adequate time for potential spectrum sellers and buyers to analyze the final rules and assets to be sold to determine if they are interested in participating and at what price. If the FCC wants to encourage participation, it will need to ensure that potential spectrum sellers and buyers have at least a number of months to assess their options under the final rules. Otherwise, it is likely that many who might participate will not have attained an adequate level of comfort in the process to participate, or at least not at the prices the FCC is hoping to see. In that case, they will elect to remain on the sidelines.

Given the number of moving parts and these related considerations (which ignore entirely the possibility of additional delay from court appeals of the eventual rules), a 2014 auction seems very optimistic unless the FCC’s goal shifts from having a successful auction to just having any form of auction as soon as possible. While those already intent upon being a buyer or seller of spectrum would certainly prefer a fast auction since that means quicker access to spectrum and spectrum dollars and less competition for both, the FCC and the public have a vested interest in holding auctions with a broader definition of success (in terms of dollars to the treasury, less disruption of broadcast service, producing large enough swaths of spectrum to maximize spectrum efficiency, etc.).

This morning, the FCC announced an October 26, 2012 workshop focusing on broadcaster issues in the NPRM, so efforts at removing at least some of the mystery surrounding the auctions are already underway. Given that all television broadcasters will be affected by this process, whether through participation in the reverse auction or by being forced to modify their facilities in the subsequent spectrum repacking, it would be wise to participate in the workshop, which is also being streamed on the Internet.

And one last bit of good news: the workshop will be held at the Commission Meeting Room at FCC Headquarters in Washington, DC rather than at that cabin in the woods mentioned above. However, don’t be surprised if there is still a “big money for spectrum” banner over the door when you get there.

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The first compliance deadline for the FCC’s new rules for the closed captioning of video programming delivered via Internet protocol (i.e., IP video), as required by the 21st Century Communications and Video Accessibility Act (CVAA), is September 30, 2012. April 30, 2012 was the effective date of the new rules and all video programming that appeared on television with captions after that date is considered “covered IP video” and will need to be captioned when being shown online in the future. “Video programming” is defined as “programming by, or generally considered comparable to programming provided by a television broadcast station.”

Last January, the FCC released its Order adopting rules to implement the CVAA’s requirements governing the closed captioning of IP video. The CVAA requires that all nonexempt full-length video programming delivered over the Internet that first appeared on TV in the United States with captions also be captioned online. According to the rules, video programming shown on the Internet after being shown on television must have captions based on the following timeline established by the FCC:

  • September 30, 2012: all pre-recorded programming not edited for Internet distribution must be captioned for online viewing. Pre-recorded programming is defined as programming other than live or near-live programming.
  • March 30, 2013: all live and near-live programming must be captioned for online viewing. Live programming is defined as programming that airs on TV “substantially simultaneously” with its performance (i.e., news and sporting events). Near-live programming is video programming that is performed and recorded less than 24 hours prior to the first time it aired on television (i.e., the “Late Show with David Letterman”).
  • September 30, 2013: all pre-recorded programming that is edited for Internet distribution must be captioned for online viewing. Programming edited for Internet distribution means video programming for which the TV version is “substantially edited” prior to its Internet distribution.

Keep in mind that there is a different compliance schedule for all programming that is subject to the new requirements but which is already archived in a video programming distributor’s or provider’s library before it is shown on television with captions. Such programming is subject to the following deadlines:

  • Beginning March 30, 2014, all programming that is subject to the new requirements and is already in the distributor’s or provider’s library before it is shown on television with captions must be captioned within 45 days after it is shown on television with captions.
  • Beginning March 30, 2015, such programming must be captioned within 30 days after it is shown on television with captions.
  • Beginning March 30, 2016, such programming must be captioned within 15 days after it is shown on television with captions.

Clients frequently ask whether the new rules apply to clips, video-clips, or outtakes. Generally, the answer is no. The FCC’s Order defines clips as “excerpts of full-length programming.” According to the FCC, the rules apply to “full-length video programming” defined as “video programming that appears on television and is distributed to end users, substantially in its entirety, via IP.” This definition therefore excludes video clips or outtakes from video programming that appeared on television. However, keep in mind that the FCC also indicated that when “substantially all” of a full-length program is available via IP, whether as a single unit or in multiple segments, that program is not considered a clip and does constitute a full-length program subject to the IP captioning rules.

Those interested in learning more about these issues should contact us.

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In what seems to be the longest presidential campaign in history, tomorrow, September 7th, marks the beginning of the final stretch. That’s the first day of Lowest Unit Charge Season, the 60-day period before the November 6th, 2012 general election. During that time (which also occurs in the 45 days before a primary election), broadcast stations may charge no more than their lowest rate for each particular class of ad time purchased for a “use” by a legally qualified candidate.

Of course, while the concept sounds simple enough, its implementation at stations with dozens of different classes of ad time has proven to be a biennial headache for broadcasters. However, particularly for stations in political swing states, it can be a fairly profitable headache, and well worth the regulatory aspirin needed to get through it.

Contrary to a common misconception, Lowest Unit Charge applies to all legally qualified candidates during the LUC window, and not just to federal candidates. Also, keep in mind that the 60-day Lowest Unit Charge window is relevant only to the issue of rates. Other political broadcast rules, like the requirements for reasonable access for federal candidates and equal opportunities apply as soon as there are enough legally qualified candidates to trigger them (one in the case of reasonable access, and at least two in the case of equal opportunities, since there has to be a competing candidate to demand an equal opportunity in response to the first candidate’s airtime).

If the statements above have left you perplexed, confused, or questioning the very meaning of your existence, you should definitely take some time to look at the current edition of our Political Broadcasting Advisory. The Advisory fills in lots of detail on the matters discussed above, as well as myriad other issues created by the complexities of selling (or buying) political ad time in a regulated environment.

So, update the rate card attached to your Political Disclosure Statement, and get ready for the final stretch of a political season that has been excruciatingly long for viewers and listeners, but which will be over all too quickly for many broadcasters.

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On Thursday, the much anticipated Online Public Inspection File for television stations launched more or less successfully. To complete the task in the short time given them, the FCC staff put forth an Olympic effect, and while they were subject to some point deductions for a few stumbles in the regulatory gymnastics involved, they largely “stuck the dismount” as the system went live.

To its credit, the FCC clearly listened to the many voicemails and emails sent to FCC staff, as well as the comments and questions raised during the FCC’s online demonstrations prior to launch. Some potentially nasty pitfalls for stations were ironed out via the FAQs, and the system will hopefully continue to be refined in the weeks and months ahead.

In the meantime, here is what stations need to do now that the system is operational:

1. Be sure you can log in. The FCC’s staff reports that there were a considerable number of stations that had lost or forgotten their FRN (Federal Registration Number) and password or otherwise had trouble with the log in process. The FRN has become an all-access pass to a station’s records with the FCC and anyone who has it can file applications on the station’s behalf in any number of FCC filing systems. The potential for mischief that the FRN and password presents is worthy of another blog post, but for now, know that stations that have used multiple FRNs and passwords may find it hard to get access to their online public inspection files and need the staff’s assistance in straightening the problem out.

2. Input your station address. On the Authorizations page and again on the Letters and Emails From the Public page, stations need to fill in the station’s main studio address, telephone number and email contact information. Stations should also verify that their closed captioning contact is listed correctly.

3. Cross-reference the online public file on the station’s home page. Stations that have websites must include a link on their home page to their online public inspection file and provide the public with contact information for a station employee that can assist the disabled in accessing the public file.

4. Remove out of date documents automatically uploaded by the FCC. Since the FCC simply linked its CDBS public view to the new online public files, there may be numerous items that can safely be discarded as no longer relevant. The FCC did not do this automatically because the retention periods for the various categories of documents that seem straightforward at first blush actually vary considerably depending on a station’s individual circumstances. The FCC has given stations enough rope to hang themselves here, so care should be taken before documents are removed. Nevertheless, for most stations, a lot of material is being put out there that need not be.

5. Check the station’s Section 73.1212(e) and BCRA (Bipartisan Campaign Reform Act) folders. Chances are good that confusion has surrounded your station’s 73.1212(e) folder for years, with the result that many stations’ Section 73.1212(e) folders are empty. Section 73.1212(e) is the rule requiring stations to maintain a list of the executive officers of organizations that buy time to discuss political matters or controversial issues of public importance, and to place that list in the public inspection file. Most stations have treated these types of spots no differently than they do spots purchased by candidates for elective office. As a result, often when we visit a station’s public file, we find neatly labeled folders for each candidate and each issue in the same section of the file cabinet and an empty folder labeled “Section 73.1212(e) Sponsorship Identification” at the very end of the drawer. When BCRA was implemented (requiring stations to maintain more detailed information about third-party political and issue ad buys involving controversial national issues), stations simply labeled more folders and added the BCRA materials to the political file right next to the materials on candidate ads. In addition, many stations found it difficult to distinguish between controversial national issues versus controversial state or local issues, and simply collected and maintained the same disclosure information for all ads that seemed “political” in nature, even if placing that information in the file was not actually required.

Technically (and here’s where we separate the real communications lawyers from people who have interesting lives), the paperwork kept for non-BCRA issue ads was never part of a station’s “political file”, and the BCRA paperwork, which is nowhere mentioned in either the FCC’s political or public file rules, is part of the political file. This distinction could have meant that stations that are not network affiliates located in the Top 50 markets would have been exempt from uploading candidate and BCRA paperwork until July 2014, but would still have to upload state and local issue ad paperwork immediately. Fortunately, the FCC appears to have sidestepped this problem by including in its FAQs a statement acknowledging that, because many stations simply lump all these “political” documents together, they can treat them all as part of the “political file” and only start uploading them in July 2014 (unless they are a Big 4 network affiliate in a Top 50 market).

6. Decide when to start uploading the station’s pre-August 2 documents. The FCC is giving stations six months to upload their required pre-August 2 documents to the website. While the original Report and Order only gave stations five months from the rule’s effective date to get this done, which would make final compliance due over the New Year’s holiday, the FCC through its FAQs and its staff’s advice is granting stations until February 2, 2013 to finish the upload process. Given the continuous “Recent Station History” feed on the FCC’s website notifying the public of the most recent filings, however, stations might want to time their uploading activities to times when other filings are also taking place (i.e, October 1 EEO Public File Reports or October 10 Quarterly Issues/Programs Lists). That way, their recently filed documents are likely to be moved off the front page more quickly.

7. Stations airing pre- or post-filing license renewal announcements must update the language of the spots, while understanding that the public might not appreciate the change. The FCC has now updated the language of the pre- and post-filing license renewal announcements so that, on the one hand, it directs the public to find the station’s license renewal application at www.fcc.gov, but, on the other hand, tells the public to come to the station’s main studio or to the FCC to learn more about the license renewal process. The problem is that stations which filed their license renewal applications on June 1 or August 1 have been telling their viewing public for months that their applications are available at the main studio. This may lead to some disgruntled visitors to the studio, and stations will also need to think about exactly what they can offer members of the public that show up in their lobbies asking for “further information concerning the FCC’s broadcast license renewal process.” As a matter of good public relations, stations going through license renewal may want to consider keeping a hard copy of their license renewal application and the FCC’s “The Public and Broadcasting” publication available to pacify members of the public who trek to their stations in response to the public notices. Of course, stations that have not transitioned all of the required elements of the public file into the FCC’s system must still make the public file available upon request in the traditional manner, and stations will always have to make letters and emails from the public available at the studio even after the transition has ended.

Finally, broadcasters have long noted that visitors to the public file are few and far between. As a result, it has been all too easy for stations to become rusty on the procedures for making the file immediately available to the public, despite the many fines that have been assessed by the FCC for failure to do so. It is likely that visits will become even less frequent now that much of the file will be available online. However, stations must continue to prepare their staffs to receive the public and respond to questions about what is at the station and what is online. The upcoming months will likely be a learning process for all.

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Late this afternoon, the United States Court of Appeals for the District of Columbia Circuit denied the Stay requested by the National Association of Broadcasters that would have prevented the FCC’s new online Public Inspection File posting requirement from becoming effective. As a result, television broadcast stations must be prepared to comply with this new requirement effective on August 2, 2012.

As we have previously reported here, the FCC has moved with great speed to create a new filing system to house television stations’ online Public Inspection Files. Until now, broadcasters have had only a brief glimpse of the system they must begin using in less than one week.

This afternoon, the FCC announced that it will hold two public online “screensharing” sessions that will “provide high resolution views of the application screens and cover the material presented during the July 17, 2012 demonstration.”

The sessions will occur at 9:00 am on Monday and 4:00 pm on Tuesday. Those interested in viewing the demonstrations must visit the FCC’s site in advance and join the teleconference prior to its scheduled start time. While the online demonstration will provide the visuals, the audio portion will be done via the teleconference.

We have prepared an Advisory for clients to help them understand which specific items must be uploaded and what steps they should take to make a successful transition to the online Public Inspection File. The next week promises to be chaotic for TV broadcasters, but we hope the Advisory will help alleviate some of the regulatory pain.

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The FCC has released a Report and Order which includes its final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for fiscal year 2012 (FY 2012). The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

In May of this year, the FCC issued a Notice of Proposed Rulemaking (“NPRM”) regarding its FY 2012 payment process and the proposed fee amounts for each type of FCC license. In large part, the FCC adopted its proposals without material changes. With respect to the non-fee related proposals, the FCC imposed a new requirement that refund, waiver, fee reduction and/or payment deferment requests must be submitted online rather than via hardcopy. The FCC also adopted its proposal to use 2010 U.S. Census data in calculating regulatory fees. With respect to fees, Commercial UHF Television Station fees increased across the board, except for the fee associated with stations in Markets 11-25. In contrast, Commercial VHF Television Station fees decreased across the board, except for those stations in Markets 11-25. The fees for most categories of radio stations increased modestly. A chart reflecting the fees for the various types of licenses affecting broadcast stations is provided here.

The FCC will release a Public Notice announcing the window for payment of the regulatory fees. As has been the case for the past few years, the FCC no longer mails a hardcopy of regulatory fee assessments to broadcast stations. Instead, stations must make an online filing using the FCC’s Fee Filer system reporting the types and fee amounts they are obligated to pay. After submitting that information, stations may pay their fees electronically or by separately submitting payment to the FCC’s Lockbox.

Finally, as Paul Cicelski of our office noted earlier this year, the FCC is re-examining its regulatory fee program and has initiated the first of two separate NPRM proceedings seeking comment on issues related to how the FCC should allocate its regulatory costs among different segments of the communications industry. The FCC expects to release the second NPRM “in the near future” and implement any changes from those rulemakings in time for FY 2013.

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By Lauren Lynch Flick and Paul A. Cicelski

As promised, yesterday morning the FCC conducted a public demonstration and webcast of the interface it has developed to host the online public inspection files for television broadcast stations. As we noted last week, the database is being developed in connection with the FCC’s recent Order requiring television broadcast stations to post their public inspection files online in a central, Commission-hosted database. These rules go into effect August 2, 2012. An archived version of the FCC’s webcast can be found here.

FCC Media Bureau Chief Bill Lake opened the demonstration by emphasizing that the FCC is focused on making it easier for broadcasters to use the system and for the public to access it than has been the case with the FCC’s legacy databases and paper-based public files. Greg Elin, the FCC’s Chief Data Officer, echoed Lake’s comments and demonstrated how the new interface brings together in one place items that have historically been stored in different locations on the FCC’s website, such as having the station’s contour map from the engineering database and its current authorization accessible from the main page for the station. The new system also replaces FCC Form numbers and abbreviations with plain English and will permit stations to upload documents in most major formats to make it more “user-friendly.” Elin also said that the FCC plans to use dedicated hardware for broadcasters to use to upload items so that surges in interest on the public side will not prevent broadcasters from managing their online file pages.

The FCC has been working on such issues for some time in connection with a planned Consolidated Licensing System (CLS) which it has demonstrated on a number of occasions over the past few years. The CLS is intended to consolidate and replace the FCC’s legacy filing databases, providing uniformity in electronic filing across all of the different Bureaus and types of authorizations. Media Bureau licensees are slated to be the first to use the new system when it’s ready. It appears that the FCC has integrated the public file interface with that on-going work, providing a uniform “look and feel” between the public file interface and what might ultimately become the sole online filing location on the Commission’s website.

It remains to be seen after watching the presentation the extent to which the interface will be ready to go by the FCC’s August 2 deadline. Lake and Elin each indicated that they expected that the interface would “evolve” over time as experience with its use is gained. Moreover, Elin stated that, while most issues for the August 2 launch have been ironed out for Mozilla and Firefox users, a number of applications associated with the interface do not yet function properly with Internet Explorer. It also appears that, although the database will be connected real-time to the FCC’s current Consolidated Database System (CDBS) allowing applications that are filed to be instantaneously included in the new database, the ability to effectively “search” the new database is still a way off. Finally, it was not clear how stations will be able to both (i) allow multiple employees, engineers and counsel to access the station’s page to upload and police the contents of the public file and (ii) monitor those various agents that might act on its behalf, especially if online electronic filing of applications is integrated with this interface.

Regarding the political file, which network affiliates in the top-50 markets must begin populating with newly created political documents beginning August 2, Elgin said that the FCC intends to establish a series of files and sub-files for stations to use based on data imported from the Federal Election Commission’s website. Specifically, the FCC’s database will include separate files for federal, state, and local election ad buys. Under those, FCC proposes to include sub-folders, such as one for each Congressional district, then further sub-folders for each candidate as well as for non-candidate specific issue ads. Stations will be given tools that will allow them to retain some flexibility when designing their individual online political files, but how much customization the new database will allow remains to be seen. The FCC will support file-sharing programs that can allow multiple employees at a station to upload information about ad buys, but stations will still have to address the issues regarding user identification noted above.

Given the FCC’s efforts to make the interface useable in a variety of ways, TV stations would benefit from the opportunity to test the system, to see which file formats work best for them, to learn and implement file sharing programs, and to set up internal controls for employee access to the station’s page. Unfortunately, while Elgin did indicate that the system would be up and running by August 2, he was unable to provide a date specific regarding when the database will be available for such testing. Remembering the difficulties encountered with the roll out of the new commercial ownership report, early testing will likely be key to the success of the new database.

Historically, each time the FCC has introduced an electronic filing form to replace a paper-based form, it has allowed broadcasters a significant transition time period to acclimate to the new form. Clearly, such a timeframe has not been contemplated here so far. Therefore, at a minimum, it would be appropriate if the FCC withheld all public inspection file enforcement activity against television stations until such a time as it is certain that the new interface is functioning smoothly and broadcasters have had an opportunity to familiarize themselves with the new system.

Of course, there is the issue of the NAB’s pending emergency request with the D.C. Circuit Court of Appeals to stay the August 2 effective date of the rules, which could have the same effect. Check back frequently for updates as there is sure to be plenty of additional news prior to August 2.

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As I reported last week, the FCC’s new rules requiring television stations to replace the public files they maintain at their studios with electronic files to be hosted online by the FCC are currently set to become effective on August 2, 2012. Since that report, a lot of events have occurred, and the focus of this proceeding has officially shifted from the FCC to the U.S. Court of Appeals for the D.C. Circuit.

To no one’s surprise, the FCC earlier today issued an Order denying the National Association of Broadcaster’s (NAB) Petition for Stay of the FCC’s new online public inspection file rules. In its Order, the FCC states it is denying the NAB’s request because the NAB was unable to satisfy any of the four factors factors supporting grant of a stay. According to the FCC, the NAB failed to show (1) that the new rules would cause irreparable injury; (2) that the NAB is likely to prevail on the merits in its appeal; (3) that other interested parties will not be harmed if a stay is granted; and (4) that a stay would serve the public interest. Essentially, the FCC regurgitated its prior findings in deciding to move full speed ahead with the new rules. However, TV broadcasters have been seeking relief from the new rules, which will, without question, increase compliance burdens on TV stations while needlessly duplicating records already required to be maintained online by the Federal Election Commission.

As a practical matter however, today’s action by the FCC is more of a procedural hurdle that had to be cleared by broadcasters on their way to court rather than a true substantive analysis of the merits of the court appeal. As I reported last month, the NAB has already filed a Petition for Review asking the U.S. Court of Appeals for the D.C. Circuit to vacate the FCC’s action “on the grounds that it is arbitrary, capricious, in excess of the Commission’s statutory authority, inconsistent with the First Amendment, and otherwise not in accordance with law.” Also, earlier this week, in anticipation of today’s denial by the FCC, the NAB filed a separate Emergency Motion with the court asking the court to hold the new rules in abeyance. The NAB is asking the court to stay the August 2 effective date of the rules until the court has had an opportunity to consider the NAB’s Petition for Review.

According to the NAB’s request for a stay, the FCC has “engaged in arbitrary and capricious decisionmaking by disregarding the competitive harm that is likely to result from the Order and departing from the provisions of the Bipartisan Campaign Reform Act (BCRA.)” The NAB also states that its “members will suffer irreparable harm absent a stay because the Order compels television stations to post the prices for specific advertisements to a public website immediately after the sales occur.” The NAB’s request also noted that the new rules “will place NAB’s members at a distinct disadvantage to their non-broadcast competitors, who will not be required to post rate information on the Internet.”

While all of this is going on, the FCC has announced that it will be conducting a public demonstration of its proposed online public inspection file database next Tuesday, July 17, 2012, at 10:00 a.m., only two weeks or so prior to the date the new rules are scheduled to go into effect. Those of you interested in participating online can do so by logging in to www.fcc.gov/live. I will be posting a follow-up piece summarizing next week’s demonstration.

As the levels of activity on multiple fronts indicate, this proceeding is far from over. To be sure, obtaining a court stay is not an easy task. That said, this is the rare case where (despite the FCC’s contrary ruling), the irreparable harm to broadcasters is apparent, and the case on the merits is strong. While the court ponders the stay request, TV broadcasters need to be preparing themselves for the the process of uploading their public inspection files by the August 2 deadline. Whether or not a last-minute stay is granted, the next two weeks will be a white-knuckle ride for TV broadcasters.

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Earlier today, the FCC announced in the Federal Register that the Office of Management and Budget (OMB) has approved the FCC’s new rules requiring television stations to replace the public files that they maintain at their studios with electronic files that will be hosted online by the FCC. As a result of today’s announcement, the online file rules become effective on August 2, 2012. Included among the documents that must be made available online are stations’ ad sales records for political ads–a requirement widely speculated to be a response to the Supreme Court’s decision in the Citizens United case.

As I reported recently, what this means is that all full-power and Class A television stations will be required to upload any newly created public file documents to a not-yet-disclosed database managed by the FCC starting August 2. Stations will have until January 3, 2013, to post their current public file documents online, with the exception of letters and emails from the public which are not required to be uploaded.

With respect to political file documents, affiliates of ABC, CBS, NBC or Fox located in the top-50 television markets will have to begin uploading all newly created political file documents to the FCC’s database on August 2, 2012. The political file requirement will be phased in so that all other television stations must comply with the political file uploading requirement by July 1, 2014. Until July 1, 2014, stations not in the top-50 markets and all stations not affiliated with the top-four networks, regardless of the size of the market they serve, are exempt from the requirement. The FCC has stated that it plans to issue a Public Notice no later than July 1, 2013 seeking comments on the impact that the posting requirement has had on television stations to that point and to evaluate the effectiveness of the process. Items placed in a station’s political file prior to August 2 will not have to be posted online.

Whether any of these dates will hold remains to be seen.

First, the National Association of Broadcasters (NAB) has already filed a Petition for Review of the rules in the U.S. Court of Appeals for the District of Columbia Circuit, even though the deadline to do so is not until July 10. The NAB, along with 46 State Broadcasters Associations and others, had opposed the rules when the FCC proposed them, stating that they were riddled with omissions, greatly underestimated the burden on television stations, and were otherwise duplicative of reporting required by the Federal Election Commission (FEC). However, the FCC and the OMB rejected these claims, seemingly turning a blind eye to the voluminous record in the proceeding indicating that the proposed rules will increase burdens on television stations while merely duplicating records already required to be filed with the FEC. As a result, the NAB’s court challenge argues that the FCC’s action in adopting the rules “infringes on . . . First Amendment free-speech rights, exceeds statutory authority, and is arbitrary and capricious.” In addition, the NAB filed a motion for stay with the FCC earlier today asking the Commission to delay implementation of the rules until the court has had an opportunity to review the NAB’s Petition for Review.

Second, and of more practical concern, the FCC will now have to scramble to ready its online filing database and educate the public in its use before the August 2 effective date rolls around. The FCC has not yet announced when the database will be available for stations to “test” the system in advance of the rules going into effect as it claimed it would do when it adopted the new rules. The Commission did announce today that it will soon schedule user testing and educational webinars for the online public file to ensure that the uploading of materials by broadcasters can be done “smoothly and efficiently”.

Many will remember the chaos that occurred in 2009 and 2010 as a result of the FCC’s decision to adopt a new electronic Ownership Report filing requirement that increased both the amount of data to be collected and the number of reports to be submitted, but promised to mitigate the increased burden by making the data easy to copy into multiple filings. Repeatedly, the FCC’s system ground to a halt under the heavy load, precluding filers from working with the data they had painstakingly entered. As a result, the filing deadline had to be repeatedly extended until the bugs were worked out. Glitches such as this are inevitable with an untested system, which makes one wonder how the FCC believes it can make it all work before the August 2 deadline. It would be unfortunate if the combination of the Citizens United ruling and the impending November 6 election drove the FCC to once again implement a filing database that is not ready for prime time, forcing broadcasters to serve as beta testers.

Needless to say, given the NAB’s Petition at the court, the other likely court and FCC challenges to the rules, and the hurdles the FCC faces in implementing the online database, the odds are not high that stations will be fully uploaded by the August 2, 2012 deadline. Unfortunately, though, television stations can’t afford to wager on the speed with which the FCC will move in this case. Stations will therefore need to start moving now to ensure they are ready to post their files by August 2, 2012, and should remain alert to any FCC announcements informing them exactly how the new filing system will work.

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Posted in: Political Advertising
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