Articles Posted in Television

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3/18/2011
The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to their respective license renewal filing deadlines.

Noncommercial educational radio stations licensed to communities in Texas, and noncommercial television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, must file their Biennial Ownership Reports by April 1, 2011.

In 2009, the FCC issued a Further Notice of Proposed Rulemaking seeking comments on, among other things, whether the Commission should adopt a single national filing deadline for all noncommercial radio and television broadcast stations like the one that the FCC has established for all commercial radio and television stations. That proceeding remains pending without decision. As a result, noncommercial radio and television stations continue to be required to file their biennial ownership reports every two years by the anniversary date of the station’s license renewal application filing.

A PDF version of this article can be found at Biennial Ownership Reports are due by April 1, 2011 for Noncommercial Educational Radio Stations in Texas, and for Noncommercial Television Stations in Delaware, Indiana, Kentucky, Pennsylvania and Tennessee.

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The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ local Public Inspection Files by April 10, 2011, reflecting programming aired during the months of January, February and March, 2011.

Statutory and Regulatory Requirements

As a result of the Children’s Television Act of 1990 and the FCC Rules adopted under the Act, full power and Class A television stations are required, among other things, to: (1) limit the amount of commercial matter aired during programs originally produced and broadcast for an audience of children 12 years of age and younger; and (2) air programming responsive to the educational and informational needs of children 16 years of age and younger.

For all full-power and Class A television stations, website addresses displayed during children’s programming or promotional material must comply with a four-part test or they will be counted against the commercial time limits. In addition, the contents of some websites whose addresses are displayed during programming or promotional material are subject to host-selling limitations. The definition of commercial matter now includes promos for television programs that are not children’s educational/informational programming or other age-appropriate programming appearing on the same channel. Licensees must prepare supporting documents to demonstrate compliance with these limits on a quarterly basis.

Specifically, stations must: (1) place in their public inspection file one of four prescribed types of documentation demonstrating compliance with the commercial limits in children’s television, and (2) complete FCC Form 398, which requests information regarding the educational and informational programming aired for children 16 years of age and under. Form 398 must be filed electronically with the FCC and placed in the public inspection file. The base forfeiture for noncompliance with the requirements of the FCC’s Children Television Programming Rule is $10,000.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ local public inspection files by April 10, 2011, reflecting information for the months of January, February and March, 2011.

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 a 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 station compliance discussed below.

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This Broadcast Station EEO Advisory is directed to radio and television stations licensed to communities in: Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Introduction

April 1, 2011 is the deadline for broadcast stations licensed to communities in the States/Territories referenced above to place their Annual EEO Public File Report in their public inspection files and post the report on their website, if they have one. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by April 1, 2011.

Under the FCC’s EEO rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal employment 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, all 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, attending job fairs, and having an internship program.

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Pity the post office. Even its federal brethren have abandoned it. Today the FCC announced that, with the beginning of the broadcast license renewal cycle fast approaching, it will not be sending its traditional postcard reminders to broadcast licensees. It did say, however, that it would email reminders to broadcasters for which it has email addresses in an effort to minimize the number of enforcement actions it will need to take against those failing to file on time. The base fine for a late-filed renewal is $3,000, but because most stations that miss the filing deadline have their license expire before they realize their mistake, an additional $4,000 fine for unauthorized operation (for a total of $7,000 per station) is nearly automatic.

While those of us following the FCC’s enforcement actions have noticed a fairly dramatic upward trend in the size of FCC fines (noted in an earlier post), the Media Bureau is to be commended for taking steps to assist broadcasters in meeting their filing obligations rather than just fining those that don’t.

To accomplish this, the FCC today released a Public Notice announcing the availability of its new license renewal form, discussing the changes found in it, and providing a link to the state-by-state schedule of license renewal deadlines. The idea is to make the information readily available to broadcasters, though not by way of their mailboxes. Make no mistake, however, as the Public Notice reminds us, that broadcasters are responsible for meeting their own filing deadlines, and cannot defend a failure to timely file by claiming that the FCC didn’t remind them.

More importantly, the Public Notice is not just a procedural announcement. The FCC took the opportunity to address a critical question regarding its new requirement that license renewal applicants certify that their “advertising sales agreements do not discriminate on the basis of race or ethnicity and that all such agreements held by the licensee contain nondiscrimination clauses.” This new certification was adopted as a way of preventing advertisers and ad agencies from engaging in “no urban/no Spanish” ad placement practices. In creating the certification requirement, the FCC once again used its authority over broadcasters to force a change in the conduct of those for which the FCC lacks jurisdiction (in this case, advertisers).

In an early February post, our own Dick Zaragoza raised a number of issues that broadcast license renewal applicants need to consider before making this new certification. An additional source of concern is that the FCC had not made clear how far back the certification must reach. The FCC adopted the requirement in 2008, but didn’t provide a specific date by which nondiscrimination clauses had to be incorporated into broadcasters’ advertising contracts. Many communications lawyers told their clients that the requirement had gone into effect in mid-2008, while others, including myself, noted that it could not go into effect until the FCC had taken some additional procedural steps to effectuate it, but when those steps would be completed was impossible to predict.

Thankfully, today’s Public Notice answers that three year old question, stating that the certifications must cover a period starting today, March 14, 2011, to the date a station files its license renewal application. Stations that successfully implemented this change anytime between 2008 and now will be able to make the necessary certification, and stations that were frozen by uncertainty need to implement it immediately or face the consequences at renewal time. While the license renewal process can be a stressful one, particularly for those who barely remember filing their last renewal application eight years ago, the Media Bureau today helped broadcasters by eliminating at least some of the uncertainty that can make it so stressful.

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On March 3, 2011, the FCC released a Notice of Proposed Rulemaking (“NPRM”) setting forth proposed rules to implement the video description requirements contained in the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”), which became law in October 2010. The CVAA mandates that the FCC take a number of steps to ensure that new communications technologies are accessible to individuals with vision or hearing impairment, including reinstating the video description rules for television broadcasters that had been thrown out by the United States Court of Appeals for the District of Columbia Circuit in 2002. The CVAA directs that the reinstated video description requirements apply to programming that is “transmitted for display in digital format” and authorizes the FCC to extend the video description requirements to stations and situations that were not covered by the prior rules. Accordingly, the FCC is using this NPRM to take a fresh look at the rules.

The Fifty Hour Minimum and Pass-Through Obligations

Video description, which is confusingly sometimes referred to as audio description, assists those who are blind or have impaired vision to view video programming by providing, during a pause in a program’s dialogue, a verbal description of the key visual elements being shown.

As was the case under the FCC’s former rules, all network-affiliated television stations (including non-commercial stations) must pass through video descriptions when the network provides them and the station has the technical capability to air them. For stations that have multiple broadcast streams, the FCC proposes to require the pass-through of video descriptions on each stream. The pass-through obligation also applies to multichannel video programming distributors (“MVPDs”) that have the technical capability to pass through video-described programming on the channel containing the video-described programming. As noted below, the FCC is seeking comments on how it should determine whether a particular station or MVPD has the technical capability to pass through descriptions.

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On February 22, 2011, US District Court Judge Naomi Reice Buchwald of the Southern District of New York issued a 59-page decision enjoining ivi TV, Inc. from streaming the programming of various network-affiliated television stations on the Internet without their permission. The judge’s opinion articulates a basic principle of copyright law — that the creator of the content holds a bundle of rights which, with very few exceptions, it alone controls. Therefore, even in this age of proliferating distribution platforms, the fact that the copyright owner has made its content available via a number of different technologies does not diminish its ability to control whether and how to make it available on a new platform. The case will likely yield more examination of this issue, as ivi TV has sought a stay of the injunction.

Background
ivi TV began Internet streaming of the signals of several network affiliated television stations located in Seattle and New York in September 2010, and thereafter announced plans to add stations from Chicago, Los Angeles and San Francisco in the future. It offered subscribers located throughout the United States the ability to receive these television signals via an Internet connection for a monthly fee. Subscribers downloaded a player, chose the signals to watch, and the signals were delivered in an encrypted form. In anticipation of the content owners’ lawsuit, ivi TV sought a Declaratory Ruling from a US District Court in Seattle that the company was not infringing the copyrights in the programming, but the court dismissed that case as an anticipatory filing. A consortium of television stations, the producers of programming shown on the stations, and Major League Baseball later commenced a lawsuit for copyright infringement in New York, seeking an injunction to prevent any further retransmissions of their content by ivi TV.

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More than two months after the FCC released a Notice of Proposed Rulemaking proposing preliminary steps to reallocate and reassign television broadcast spectrum for wireless broadband, the government machinery has finally announced comment deadlines: March 18 for initial comments and April 18 for replies. This is the first of several proceedings the FCC intends to pursue in its goal to repurpose broadcast spectrum.

The notice makes three proposals and asks a number of questions about each. It proposes:

  • To add new fixed and mobile service allocations to the TV bands and give them co-primary status;
  • To permit two or more stations to share a single 6 MHz channel; and
  • To take steps to improve the performance of broadcast signals in the VHF band.

Almost everyone interested in the topic of broadcast spectrum repurposing has a strong view, and opinions differ even among broadcasters. With station transactions at all time lows, some welcome the prospect of another possible exit. Those that don’t want to sell are worried about transition costs, being moved to less desirable channels, losing coverage area, or being coerced to sell by threat of hefty spectrum fees. Many broadcasters don’t know where they stand. For those, here are two things to keep in mind.

Timing. Regardless of what you read about timetables, it is extremely unlikely that auctions of any reclaimed broadcast spectrum will take place within the next three years. Congress has not authorized incentive auctions. Even if it does so this year, it will be later in the year, and the FCC will then have to adopt implementing rules. Only then can the FCC schedule an auction and can stations determine whether they want to sell. If Congress doesn’t permit incentive auctions, the FCC has other options, but those take time to develop too. Right now, there’s no coherent Plan B.
The FCC is breaking new ground here, and even without political pressures these are hard questions. They’ll take a lot of time and thought to resolve. Almost a year after the release of the National Broadband Plan, we still haven’t seen the model the FCC is using to figure out how broadcast spectrum can be cleared and stations repacked.

Apparently, the FCC is having a hard time finding daylight even without second-guessing by outsiders. Assuming everything goes smoothly for the FCC’s agenda, it’s conceivable auctions could take place in late 2014, with settlements and transition in 2015.
Eligibility and appeal. Most stations either won’t be eligible to participate in incentive auctions or the prospect won’t be very enticing. The FCC will almost certainly draw some bright lines. It might offer incentives only in the most densely populated areas, or it may preclude certain classes of stations from participating altogether. It might offer bigger incentives to higher band UHF stations, or it might offer better incentives to those stations, and it may preclude VHF or lower UHF stations from participating, or it may offer weaker incentives to them. Much depends on what the yet-unreleased “optimization” models show and what Congress does or does not authorize.
Among eligible stations, only a few are likely to find incentive payments to be attractive. At least today, even the most aggressive projections show spectrum shortages only in a handful of the most densely populated areas. It is not clear that the FCC will seek to clear broadcast spectrum in every market, and even if it does, auction proceeds (and thus, incentive payments) will be progressively lower as market size declines. In the 2007 auction of vacated TV spectrum, some markets commanded more than $3 per “MHz/pop” (one MHz covering one person), while others sold for about a tenth of that.
Except in the very largest markets, incentive payments probably won’t exceed the enterprise value of a profitable television station. Auction proceeds have to be split at least three ways. The U.S. Treasury will take its pound of flesh (Congress needs incentives too!) and transition costs will have to be paid. As an example, about two million people live in the Kansas City Metropolitan Statistical Area. Assuming a Kansas City station is credited with covering them all, auction of its 6 MHz channel at $1/MHz/pop would yield $12 million. A lot of this would be spent on whatever transition mechanism is used and the Treasury will keep a substantial portion of the remainder. Perhaps $1 million to $3 million would be available as an “incentive” payment to the station.
Of course, the FCC has time and means to create negative incentives. Stations that don’t sell may be moved to much less attractive channels, or forced to reduce power or coverage, or (if Congress approves) assessed substantial spectrum fees.
The FCC’s rulemaking notice doesn’t ask questions about these sorts of issues, but broadcasters should keep them in mind as they formulate their comments in response to the notice.

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While it has taken nearly two years to get there, the FCC today announced the release of its new broadcast ownership data in a format that can be searched and manipulated for media and public policy research. For broadcasters, however, the more interesting part of this Public Notice is what it says about broadcasters that failed to timely file their ownership reports.

In April of 2009, the FCC announced it was revamping the biennial ownership report filing requirement for commercial broadcast stations. Prior to that time, broadcast stations had filed their ownership reports every other year on the anniversary date of their license renewal filing deadline. However, because that deadline varied depending upon the state in which a station was located, and because a licensee with stations in multiple states could elect to file a consolidated set of reports on the license renewal deadline for any of those states, locating all of a particular broadcast station’s ownership reports at the FCC could be challenging. Even determining whether a broadcaster had timely filed its reports was not easy.

Because of that, and because the FCC had long received complaints from advocacy groups that the ownership data collected was hard to access and not particularly useful in assessing broader media ownership issues, the FCC established a uniform filing date for all commercial stations on November 1 of odd-numbered years. The FCC also revamped the report form itself, required LPTV owners to begin filing ownership reports, and eliminated prior filing exemptions for sole proprietors and general partnerships composed of natural persons. The FCC’s stated goal in making these changes was to gather ownership information from the full universe of broadcast license holders, allowing the FCC to populate a database which could be used to electronically aggregate or dissect ownership information from all commercial broadcast station owners.

The FCC (and broadcast station owners) quickly found out that this was a task easier said than done. The sheer amount of information that had to be submitted to the FCC, particularly for broadcast groups with complex ownership structures, was daunting. As we detailed in an earlier post, the FCC had to postpone the filing deadline a number of times to address issues both technical and substantive. Ultimately, the November 1, 2009 deadline slid to July 8, 2010 as these various issues were addressed. The filings were further complicated by the FCC’s instruction that, despite the reports being filed in July 2010, the ownership information in them had to be as it existed on November 1, 2009, even if that information was no longer accurate. Stations that changed hands or were newly-built during that period were unsure of what, or if, they were to report to the FCC.

One by one, these issues were resolved, and while the FCC’s filing system struggled from time to time with the immense number of filings made during those last few weeks before the deadline, the process ultimately went fairly smoothly in comparison to the process leading up to it. With today’s announcement that the ownership database is available, and that media researchers can now gather and process ownership information in a far more efficient manner, it is inevitable that we will be seeing a lot more rulemaking comments and requests for rulemaking based upon the information in this database.

However, as the Public Notice itself points out, there are limitations to the utility of the data collected. Specifically, despite a broad outreach by the FCC, lots of law firm advisories (I count at least a half dozen over that time from Pillsbury alone), and the successive filing deadline extensions, a surprising number of licensees still failed to file ownership reports. The FCC attributes this to the failure of many who were previously exempt from filing to understand that they now need to be filing ownership reports with the FCC.

Based upon the FCC’s figures, there is an obvious correlation between the type of station involved and the likelihood that it filed the required reports. Among full power commercial TV stations, only 1.7% failed to file. Among full power commercial radio stations, 4.5% failed to file. However, among LPTV stations (including Class A stations), over 39% failed to file.

Earlier this month, the FCC began sending out letters to licensees demanding that they file the required ownership reports immediately, noting that “your failure to file could result in potential fines or forfeitures.” It appears that these letters are going both to stations that didn’t file at all, and to stations that did file, but had a defect in their reports (for example, providing ownership data accurate as of July 2010 rather than November 2009). The FCC’s Public Notice does not make clear whether stations that filed a defective report were counted as not filing, but the language in these recent letters suggest that may be the case, which would help to explain the surprisingly high “failure to file” statistics.

Regardless, the new database system makes it extraordinarily easy for the FCC to generate a list of stations that failed to timely file their biennial ownership reports. It also makes it easy for the FCC to automate the process of pursuing enforcement actions against such stations. Fortunately, the initial batch of letters from the FCC appears to indicate a desire to obtain missing filings to make the ownership database complete. However, the next batch of letters could begin the process of issuing fines against stations for failure to file, particularly those that failed to do so after being warned by the FCC. If your station is one of those that did not file by the July 2010 deadline, now would be an excellent time to address that oversight before you receive an unwelcome piece of correspondence from the FCC in your mailbox.

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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:

  • FCC Levies $10,000 Fine for Noncommercial Station’s Public Inspection File Security Protocols
  • Louisiana AM Daytimer Fined for Operations After Sunset
  • $7,000 Fine for Late-Filed License Renewal Cancelled

California Broadcaster Fined $10,000 for Delaying Access to Its Public Inspection File

The FCC has repeatedly held that stations may not require members of the public to make prior appointments to inspect the public inspection file, or otherwise delay or deny access to the public inspection file during normal business hours. In a 2001 decision, the FCC stated that “a delay of ten minutes to satisfy legitimate security concerns may be reasonable,” but has never established a precise threshold as to how long the security process can take before it becomes too burdensome for the public file visitor. Historically, the FCC has imposed its full base forfeiture of $10,000 for such violations.

According to a recently released Notice of Apparent Liability (“NAL”), the FCC fined a California noncommercial broadcaster $10,000 for violating Section 73.3527(c) of the Commission’s Rules, which requires broadcasters to provide unfettered access to a station’s public inspection file during regular business hours.

The NAL indicated that on three separate occasions in August 2010, an Enforcement Bureau field agent from the Los Angeles office was denied access to the main studio, the station personnel, and the public inspection file. During the three separate visits to the station, the field agent chose not to disclose his connection to the FCC, and instead presented himself as a member of the general public. On each visit, the field agent was denied access to the station by security personnel because the field agent did not have a prior appointment. On his fourth attempt to access the station’s public inspection file, the field agent informed the security personnel of his relationship to the FCC, provided formal identification, and requested access to the public inspection file, the main studio, and the station’s staff.

At that point, the field agent was allowed to enter the station. During the resulting inspection, the field agent determined that the station had a general policy of requiring members of the public to request an appointment to view the public inspection file in violation of the unfettered access provision of Section 73.3527(c) of the Commission’s Rules. Upon finally being permitted to look at the file, the agent determined that the public inspection file was complete. However, because of the obstacles placed in the path of those seeking to view the file, the FCC presented the station with a $10,000 fine.

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