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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:

  • Government Shutdown and Other “Compelling Reasons” Prompt FCC to Reinstate NY Radio Station License
  • FCC Fines Virginia AM Station and Limits License Renewal to Two Years for Missing Quarterly Programs/Issues Lists
  • Virginia Station’s Late License Renewal Application Proves Costly

How Do You Measure a Year?  “Unique Circumstances” Lead to New York AM Station’s Reinstatement

In a Memorandum Opinion and Order and related Consent Decree, the Media Bureau agreed to reinstate the license of a Long Island, New York AM radio station that had been silent for nearly all of 2018 before going back on air without authorization in the midst of this year’s partial government shutdown.  The Media Bureau also approved an application to sell the station that had been pending since February.

Section 73.1745(a) of the FCC’s Rules requires a station to broadcast according to the “modes and power” specified in its license, and further requires licensees to seek special temporary authority (often referred to as an “STA”) when seeking to operate at variance from their license.  Even where a station obtains temporary authority from the FCC to remain silent, Section 312(g) of the Communications Act of 1934 provides that a broadcast station’s license automatically expires if it does not transmit a broadcast signal for 12 consecutive months.  The FCC does not consider unauthorized operation to be a “broadcast signal” for purposes of declaring a station’s operations to be resumed under Section 312(g).  Fortunately, the FCC has the discretion to reinstate a license that would otherwise be lost under Section 312(g) where it is appropriate as a matter of “equity and fairness.”

On January 25, 2018, the AM station went silent due to the loss of its licensed transmitter site.  Shortly thereafter, the licensee sought and was granted authority by the FCC to remain silent through August 16, 2018.  When that date arrived, the station continued to remain silent, but failed to apply for an extension of that authority.  On January 15, 2019, the licensee informed the FCC that it had resumed operations on an emergency antenna at low power, and it filed a request for special temporary authority to operate at those parameters.  The station’s request fell on deaf ears, however, as the federal government was shut down at that time due to a budget dispute.  The FCC did not resume normal operations until January 26, 2019, and did not grant the STA request until February 1. Continue reading →

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[Editor’s Note: Pillsbury will be conducting a December 3, 2019 webinar for broadcasters on the new overtime regulations sponsored by the National Alliance of State Broadcasters Associations.  Details can be found here.]

On September 24, 2019, the U.S. Department of Labor published final regulations under the Fair Labor Standards Act that raised the minimum salary level necessary to be exempt from federal overtime rules under the Act by almost 50%.  While the changes affect all businesses subject to the FLSA, broadcasters in particular may feel the impact of the changes given the staffing models used by many TV and radio stations.  The new requirements will go into effect on January 1, 2020, and broadcasters should take steps to adapt to, and minimize the impact of, those changes prior to that deadline.

The Fair Labor Standards Act (“FLSA”) is the federal law governing wage and hour requirements for employees.  Pursuant to the FLSA, employers must pay employees a minimum wage and compensate them for overtime at 1.5 times their regular rate of pay for any time worked exceeding 40 hours in a workweek unless those employees are exempt from the requirement.  On September 24, 2019, the Department of Labor issued a Final Rule that increased the minimum salary threshold for certain types of employees to be exempt from the FLSA’s overtime rules.  As a result, many currently exempt employees whose salaries are below the new thresholds will soon be eligible for overtime pay.  The White House projects the change will impact an estimated 1.3 million previously-exempt employees.

Although the FLSA applies to almost all employers, the law contains exemptions for certain types of employees at small-market broadcast stations.  The Final Rule does not affect these broadcast industry-specific exemptions, but will affect many other currently exempt employees in the broadcast industry who, unless they receive salary raises, will soon become eligible for overtime pay.

This Advisory only addresses federal law.  Some state laws impose stricter standards than federal law as to which employees are exempt from overtime pay.  Employers must ensure that they also meet the requirements of any applicable state or local employment laws.

Overview

The FLSA requires employers to pay non-exempt employees an overtime rate of 1.5 times their regular rate for all hours worked over 40 hours per workweek.  However, the FLSA exempts from its overtime rules certain classes of employees who are paid on a salary basis and who also meet specific “white collar” duties tests.  The Department of Labor’s Final Rule increases the minimum salary required for these classes of employees to be deemed exempt from the FLSA’s overtime rules, but does not alter the duties tests for those exemptions. Continue reading →

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The Federal Communications Commission released a Public Notice reminding broadcast licensees that the filing window for Broadcast Biennial Ownership Reports (FCC Form 323 and 323-E) will open on November 1, 2019.  All licensees of commercial and noncommercial AM, FM, full-power TV, Class A Television and Low Power Television stations must submit their ownership reports by January 31, 2020.

We previously reported that the FCC had modified the dates for the filing window.  At that time, the FCC explained that there would be “additional technical improvements” that required the FCC to delay the opening of the filing window.  Now, we know more about those improvements.

In particular, the FCC modified its filing system to permit parties to validate and resubmit previously-filed ownership reports, so long as those reports were submitted through the current filing system.  Further, filers will be able to copy and then make changes to information included in previously-submitted reports.  The FCC also created a new search page dedicated solely to reviewing submitted ownership reports.

As a reminder, biennial ownership reports submitted during this filing window must reflect the ownership interests associated with the facility as of October 1, 2019, even if an assignment or transfer of control was consummated after October 1, 2019.

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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:

  • Virginia FM Station’s Years of Missing Quarterly Lists Lead to Proposed $15,000 Fine and a Reduced License Term
  • FCC Investigates Ohio College Station Over Unauthorized Silence and Scheduling Violation
  • New York Amateur Radio Operator’s Threats and Harmful Interference Lead to Proposed $17,000 Fine

Feeling Listless: Virginia Station With Years of Missing Quarterly Issues/Programs Lists Hit with Proposed $15,000 Fine, Shortened License Term

In a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture, the FCC found that a Virginia FM station failed to prepare and upload eight years’ worth of Quarterly Issues/Programs lists, resulting in a proposed $15,000 fine.  The FCC also indicated it would grant the station’s license renewal application, but only for an abbreviated two-year license term.

As we noted in a recent advisory, the FCC requires each broadcast station to maintain and place in the station’s online Public Inspection File a Quarterly Issues/Programs List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.”  At license renewal time, the FCC may review these lists to determine whether the station met its obligation to serve the needs and interests of its local community during the license term.  The FCC has noted this and other such “public information requirements” are “integral components of a licensee’s obligation to serve the public interest and meet its community service obligations.”

Starting with TV stations in 2012, the FCC has required stations to transition their physical local Public Inspection Files to the FCC’s online portal.  By March 1, 2018, all broadcast radio stations were required to have uploaded the bulk of their Public File materials to the online Public Inspection File and maintain the online file going forward.  At license renewal time, licensees must certify that all required documentation has been placed in a station’s Public Inspection File in a timely fashion.  The license renewal cycle for radio stations began in June of this year.

In its license renewal application, the FM station admitted that it had run into some “difficulties” with the online Public Inspection File and had not met “certain deadlines.”  In the course of its investigation, the Media Bureau found that the licensee had in fact failed to prepare any Quarterly Issues/Program Lists during the preceding eight-year license term, and, as a result, also failed to upload the materials to the station’s Public Inspection File.

The FCC’s forfeiture policies establish a base fine of $10,000 for failure to maintain a station’s Public File.  However, the FCC may adjust a fine upward or downward depending on the circumstances of the violation.  Considering the extensive nature of the violations and the station’s failure to disclose its behavior in the years prior to its license renewal application, the Media Bureau increased this amount to $12,000.  The Media Bureau then tacked on an additional $3,000 fine, the base amount for a station’s failure to file required information, for a total proposed fine of $15,000.

Turning to the station’s license renewal application, the Media Bureau deemed the station’s behavior “serious” and representative of a “pattern of abuse” due to years of violations.  As a result, the Bureau indicated it would only grant the station a shortened license term of two years, instead of a full eight-year term, and even then, only assuming the Bureau found no other violations that would “preclude such a grant.”

In a Silent Way: University FM Station Warned Over Unauthorized Silence and Time Share Violation

In a recent Notice of Violation, the FCC cited a northern Ohio university’s FM station for failing to request authorization to remain off-air for several months and for altering the broadcast schedule that it shares with another station on the same frequency without notifying the FCC.

Part 73 of the FCC’s Rules requires a station to broadcast in accordance with its FCC authorization.  While stations are generally authorized to operate for unlimited time, some noncommercial FM stations split time on a shared frequency via a time-sharing agreement.  The FCC will usually only permit a departure from the schedule set forth in a time-sharing agreement once a written and signed agreement to that effect has been filed with the FCC by each licensee.  In the event that circumstances “beyond the control of a licensee” make it impossible for a station to adhere to this schedule or continue broadcasting altogether, the station must notify the FCC by the tenth day of limited or discontinued operation.  A station that expects to be silent for over 30 days must request Special Temporary Authority from the FCC to do so. Continue reading →

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On October 10, 2019, the FCC announced that it will hold a full-power FM Broadcast auction for 130 new construction permits starting on April 28, 2020.  For now, the FCC is seeking comment on the procedures for the auction, although it does not propose any significant changes from past FM broadcast auctions.  In connection with the auction, the FCC also announced a filing freeze prohibiting minor change applications, petitions, or counter-proposals directly affecting or failing to protect the construction permits to be auctioned.

A majority of the construction permits will be for lower-power Class A facilities, but there are 28 new facilities that are authorized to operate at 25 kW or higher.  For example, a Class B facility in Sacramento will be available, along with stations on the outskirts of major cities like Dallas and Seattle.  Overall, Texas is home to the most available permits (32), with numerous opportunities also available in Wyoming (11), California (10), and Arizona (8).

Parties seeking to file comments regarding the list of available construction permits and/or the auction procedures should submit them by November 6, 2019.  Reply comments are due November 20, 2019.  After reviewing the record, the FCC will release the final list of available permits and auction procedures, most likely in early January 2020.

 

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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:

  • Faith-Based Station Settles With FCC After Preempting KidVid Programming With Fundraising
  • Arizona LPFM Gets License Reinstated in Consent Decree
  • Christmas Tree’s Harmful Interference Results in Consent Decree With LED Company

Gotta Have Faith: Washington TV Station That Preempted Children’s Programming With Fundraising Settles With FCC

The FCC recently entered into a Consent Decree with the licensee of a faith-based Washington TV station for inaccurate Children’s Television Programming Reports and for failing to provide a sufficient amount of “core” children’s educational programming.

Pursuant to the Children’s Television Act of 1990, the FCC’s children’s television programming (“KidVid”) rules require TV stations to provide programming that “serve[s] the educational and informational needs of children.”  Under the KidVid guidelines in place at the time of the alleged violations, stations were expected to air an average of at least three hours per week of “core” educational children’s programming per program stream.  To count as “core” programming, the programs had to be regularly-scheduled, at least 30 minutes in length, and broadcast between the hours of 7:00 a.m. and 10 p.m.  A station that aired somewhat less than the averaged three hours per week of core programming could still satisfy its children’s programming obligations by airing other types of programs demonstrating “a level of commitment” to educating children that is “at least equivalent” to airing three hours per week of core programming.  The FCC has since acknowledged that this alternative approach resulted in so much uncertainty that stations rarely invoked it.

Stations must file a Children’s Television Programming Report (currently quarterly, soon to be annually) with the FCC demonstrating compliance with these guidelines.  The reports are then placed in the station’s online Public Inspection File.  Upon a station’s application for license renewal, the Media Bureau reviews these reports to assess the station’s performance over the previous license term.  If the Media Bureau determines that the station failed to comply with the KidVid guidelines, it must refer the application to the full Commission for review of the licensee’s compliance with the Children’s Television Act of 1990.  As we have previously discussed, the FCC recently made significant changes to its KidVid core programming and reporting obligations, much of it having gone into effect earlier this month.

During its review of the station’s 2014 license renewal application, the Media Bureau noticed shortfalls in the station’s core programming scheduling and inaccuracies in the station’s quarterly KidVid reports over the previous term.  It therefore issued a Letter of Inquiry to the station to obtain additional information.  In response, the station acknowledged that it had in fact preempted core programming with live fundraising, but asserted that it still met its obligations through other “supplemental” programming, albeit outside of the 7 a.m. to 10 p.m. window for core programming.  Inaccuracies in its reports were blamed on “clerical errors.”

The Media Bureau concluded that the station’s supplemental programming did not count toward the station’s core programming requirements.  Without getting into the merits of the programming itself, the Media Bureau found the programming insufficient because it was aired outside of the core programming hours.  The Media Bureau also concluded that the station had provided inaccurate information on several of the quarterly reports.

In response, the FCC and the station negotiated a Consent Decree under which the station agreed to pay a $30,700 penalty to the U.S. Treasury and implement a three-year compliance plan.  In return, the FCC agreed to terminate its investigation and grant the station’s pending 2014 license renewal application upon timely payment of the penalty, assuming the FCC did not subsequently discover any other “impediments” to license renewal.

Radio Reset: LPFM License Reinstated (for Now) in Consent Decree Over Various Licensing and Underwriting Violations

In response to years of ownership, construction, and other problems that culminated in its license being revoked in 2018, the licensee of an Arizona low power FM (“LPFM”) station entered into a Consent Decree with the Media Bureau and the Enforcement Bureau. Continue reading →

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The FCC’s Media Bureau today announced changes to the filing window for submitting Biennial Ownership Reports for commercial and noncommercial stations.  The opening of the filing window will be delayed from October 1, 2019 to November 1, 2019, and the window will now close on January 31, 2020, rather than the previously-announced deadline of December 1, 2019.

According to the announcement, the reason for the one-month delay in opening the filing window relates to the implementation of “additional technical improvements” to the form, which will include “burden-reducing capabilities.”  In particular, the Media Bureau indicated that filers will have the ability to pre-fill certain forms, and copy and paste already-entered information from other forms.  In light of the one-month delay in opening the window, the Media Bureau extended the deadline for filing as well, and provided additional time due to the intervening holidays.  Even though the window will not open until November 1st, the Media Bureau made clear that the “as-of” date for the information to be reported will remain October 1st.

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Earlier today, the FCC released a Notice of Apparent Liability for Forfeiture against CBS for false EAS alerting, which is FCC-speak for “CBS, tell us why we shouldn’t fine you $272,000 for airing a fake EAS alert tone.”  We’ve written on a number of occasions about FCC fines for airing false EAS alert tones (see, for example, here, here and here).  We’ve also written about false EAS alerts that were unintentionally aired, with my personal favorite in that category being EAS Alerts and the Zombie Apocalypse Make Skynet a Reality.  However, fines for airing false EAS tones have become sufficiently common in recent years that we have largely stopped writing about them.

Today’s decision was a bit different, however.  Section 11.45 of the FCC’s Rules provides that “No person may transmit or cause to transmit the EAS codes or Attention Signal, or a recording or simulation thereof, in any circumstance other than in an actual National, State or Local Area emergency or authorized test of the EAS….” False EAS alerts have typically popped up in commercials as a way of getting jaded viewers’ and listeners’ attention, which makes them challenging to successfully defend.  After all, the advertiser in that scenario is typically counting on the alert tone to draw attention to the ad for reasons entirely unconnected to public safety.  While the advertiser might claim that this prohibition violates its First Amendment rights, that’s not likely a winning argument since commercial speech receives reduced First Amendment protection (which is why, for example, the Federal Trade Commission can prohibit false advertising).

But what happens when the use of the alert tone is not in an ad?  In the case of CBS, the FCC succinctly describes the offending content (which you can also view here) as:

CBS admits that it transmitted the program Young Sheldon on April 12, 2018, which included a “tornado warning sound effect integral to a story line about a family’s visceral reaction to a life‐threatening emergency and how surviving a tornado changed family relationships.”

While the FCC acknowledged that CBS made efforts to ensure the tone was a simulation that did not trigger EAS equipment, the FCC noted that Section 11.45 still prohibits simulations of an EAS tone.  Among other defenses CBS raised in response to the FCC’s assertion that the broadcast violated Section 11.45, it argued that no viewer would be so confused as to think it was a real emergency, and that the broadcast is protected by the First Amendment to boot.  That’s where this case gets interesting.

The FCC is effectively claiming that CBS falsely yelled “fire” in a crowded theater, which is the well-established exception to First Amendment protections.  CBS, on the other hand, is countering that it only yelled “boogeyman”, and that any reasonable viewer isn’t going to panic, because the public knows the difference between real and fictional things.

For students of the First Amendment, the part that first catches the eye is the absolutism of the Commission’s decision.  Only very rarely does the First Amendment permit blanket bans on particular speech in all circumstances.  While you may be prosecuted for yelling “fire” in a crowded theater, you can, for example, say it if you are in command of a firing squad.

The FCC’s treatment of the EAS tone as sacrosanct admittedly makes it difficult for a drama to realistically depict an emergency and people’s reaction to it.  Whenever a particular type of content is forbidden in all circumstances except where the government specifically authorizes it, First Amendment issues inevitably arise.

In today’s decision, the FCC presented three reasons to justify the blanket prohibition.  These would be to “(1) prevent consumer confusion at the moment of a broadcast of the Tones, (2) prevent the inadvertent technical triggering of additional EAS warnings, and (3) prevent the accretion of non-emergency uses of the Tones that will dull consumers’ attentiveness to the public-safety import of the sounds.”  While the FCC had to concede that CBS’s efforts to modify the tone had been successful in preventing the triggering of additional EAS warnings, it was not convinced that consumer confusion could not have occurred, and was certainly concerned about the public getting alert fatigue.

But it’s not really the fact that the FCC rejected CBS’s arguments that is of interest to broadcasters, but how it was done.  First, the Commission noted the now archaic (but admittedly not yet overruled) court precedent that content on broadcast stations receives a lower level of First Amendment protection than all other media.  Whether that still makes sense in the modern era, the FCC’s argument creates the very real possibility that false EAS alert tones could be forbidden on broadcast TV, where the legal standard of First Amendment review is “intermediate scrutiny”, but be constitutionally protected on cable TV, where restrictions on content must meet the far tighter “strict scrutiny” standard.  Since EAS alerts are also transmitted by cable systems, however, the risk of public confusion and alert fatigue is the same on cable as it is on broadcast TV.  That raises the question of how strong the government’s interest in prohibiting false EAS alert tone simulations on broadcast TV can be if those same false alert tones might be constitutionally protected on cable TV programs.

Seeing that trap, the FCC tried to avoid it by arguing that even though First Amendment protections are reduced for CBS as a broadcaster, it doesn’t matter, because the government’s interest in preventing public confusion and alert fatigue is so compelling as to survive strict scrutiny under the First Amendment, allowing the rule to also be enforced against cable TV providers.

Public safety can certainly be a compelling government interest.  However, to survive strict scrutiny, a regulation must also be “narrowly tailored” to further the government’s compelling interest, and be the “least restrictive means” for doing so.  A blanket government ban on using even a simulation of the EAS tone would probably have a tough time surviving strict scrutiny under the First Amendment, but if the FCC could argue to a court that there is something uniquely valuable about the public hearing the tone only when there is an actual emergency, a court might well agree.

But that’s where the FCC may have undercut its own argument.  In July 2018, the FCC modified its rules to allow the airing of “the EAS Attention Signal and a simulation of the EAS codes as provided by FEMA” where they are used in EAS Public Service Announcements provided by “federal, state, and local government entities or non-governmental organizations, to raise public awareness about emergency alerting.”  To avoid confusion, such messages must state that the tone is being presented in the context of a PSA for the purpose of educating the public about EAS.

It would be challenging for the FCC to successfully argue in court that a single use of a simulated EAS tone creates listener fatigue when it has just authorized unlimited use of the actual tone in PSAs.  Similarly, the FCC weakened its argument that any non-emergency use of the tone inevitably leads to public confusion, when, by requiring the PSAs to contain a disclaimer letting the public know it is not an emergency, the FCC concedes that it is possible to present the tone (or a simulation thereof) in a manner that does not confuse the public.

That would seem to make it a a finding of fact as to whether a particular use of a simulated tone is likely to cause public confusion versus public education, and to be candid, a dramatic representation of a family reacting to an EAS tone probably conveys the importance of the tone far better than a PSA that most viewers will fast-forward past (or miss while getting a sandwich).  Admittedly, that is a slippery slope, but First Amendment analysis perpetually lives on that slope.

Regardless of how a court might balance these competing interests, the real irony of the whole affair is that Young Sheldon is set in Texas circa 1989-90.  The Emergency Alert System was not activated until 1997, meaning that a realistic portrayal of a tornado watch in 1990 would have featured the much different twin-frequency monotone Attention Signal of the earlier Emergency Broadcast System.  What’s the irony, you say?  The FCC’s restrictions on using the EBS tone outside of an emergency were eliminated twenty years ago.  Young Sheldon could have been both historically accurate and FCC-compliant had it just used the EBS tone instead.

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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:

  • Big-4 Network, Among Others, Settles With FCC Over Emergency Alert Tone Violations
  • Despite Self-Disclosure, Sponsorship ID Violations Land $233,000 Proposed Fine
  • Topeka TV Licensee Enters Into Consent Decree Over Late-Filed KidVid Reports

False Alarm: FCC Enters Into Multiple Consent Decrees Over Emergency Alert Tone Violations

In a single day last week, the FCC announced four separate Consent Decrees in response to unauthorized uses of the Emergency Alert System (“EAS”) tone across various media outlets.  The parent companies of a Big-4 broadcast network and two cable channels, as well as the licensee of two southern California FM stations, each agreed to significant payments to settle investigations into violations of the FCC’s EAS rules.  According to the Consent Decrees, unauthorized emergency tones have reached hundreds of millions of Americans in the past two years alone.

The Emergency Alert System is a nationwide warning system operated by the FCC and the Federal Emergency Management Agency that allows authorized public agencies to alert the public about urgent situations, including natural disasters and other incidents that require immediate attention.  Once the system is activated, television and radio broadcasters, cable television operators, and other EAS “participants” begin transmitting emergency messages with distinct attention tones.  These tones consist of coded signals that are embedded with information about the emergency and are capable of activating emergency equipment.  Wireless Emergency Alerts (“WEA”), which deliver messages to the public via mobile phones and other wireless devices, also use attention signals.

Emergency tones may not be transmitted except in cases of: (1) actual emergencies; (2) official tests of the emergency system; and (3) authorized public service announcements.  In an accompanying Enforcement Advisory published on the same day as the Consent Decrees, the FCC’s Enforcement Bureau noted that wrongful use of the tones can result in false activations of the EAS, as well as “alert fatigue,” in which “the public becomes desensitized to the alerts, leading people to ignore potentially life-saving warnings and information.”

For the Big-4 network, it all started with a joke.  Around the time of last year’s nationwide EAS test, a late-night network talk show parodied the test in a sketch that incorporated emergency tones.  According to the Consent Decree, the network’s programming reaches almost all US television households through hundreds of local television affiliates, as well as through the network’s owned and operated stations.  Shortly after the episode aired, the company removed the offending portions of the program from its website and other streaming sites and did not rebroadcast the episode.  Despite these remedial actions, the damage was already done; in response to the Enforcement Bureau’s investigation, the network’s parent company agreed to pay a $395,000 “civil penalty.”

The parent companies of two major cable channels entered into similar agreements.  In one instance from this past year, an episode of a popular show set in a zombie-infested post-apocalyptic world used simulated EAS tones on multiple occasions over the course of an hour.  That episode was transmitted on eight separate occasions over a two-month period.  According to the Consent Decree, within weeks of the episode’s debut, the Enforcement Bureau reached out to the network regarding the unauthorized uses of the tone and, after a brief investigation, the network’s parent company agreed to pay $104,000 to resolve the matter. Continue reading →

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The FCC has released its finalized schedule of annual Regulatory Fees for Fiscal Year 2019, and thanks to the collective efforts of all 50 State Broadcasters Associations and the National Association of Broadcasters, there is some good news for radio stations and satellite television stations.

But before we get to that, some information for you from the FCC’s Public Notice released today on filing requirements.  Fees will be due by 11:59 p.m. EDT on September 24, 2019.  You must file via the FCC’s Fee Filer system, which is available for use now.  You may pay online via credit card or debit card, or submit payment via Automated Clearing House (ACH) or wire transfer.  Remember that $24,999.99 is the daily maximum that can be charged to a credit card in the Fee Filer system.  As a result, many stations may have to pay their fees using the other methods.

Television broadcast stations will see an unfamiliar number in the “Quantity” box when they go to pay.  This relates to the FCC’s phase-in of a population-based methodology for calculating television station fee amounts.  It cannot be changed and should not be a cause for concern.  Regulatees whose total fee amount is $1,000 or less are once again exempt and do not need to pay.

In most years, the outcome of the annual Regulatory Fee battle ends with the FCC’s various regulatees rolling their collective eyes and murmuring “just tell me how much I have to fork over.”  This year’s Regulatory Fee proceeding had some surprises, however.  When the proposed fee amounts were first announced, they contained a dramatic increase in year-over-year fee amounts for most categories of radio stations.  Yet, the reason for this sudden increase was neither addressed by the FCC nor readily apparent from the FCC’s brain-numbing summary of its calculation process.

In response, all 50 State Broadcasters Associations and the NAB filed comments pressing the FCC to revisit its fee methodology and to explain or correct what appeared to be flawed data used to calculate broadcast Regulatory Fee amounts.  In particular, they pressed the FCC to explain why the estimated number of radio stations slated to cover radio’s share of the FCC’s budget had inexplicably plummeted between 2018 and 2019, resulting in each individual station having to shoulder a significantly higher fee burden.

In its regulatory fee Order, the Commission acknowledged that its estimate of the number of radio stations that would be paying Regulatory Fees in 2019 had been “conservative”, and failed to include 553 of the nation’s commercial radio stations.  Once these stations were added to the total number of radio stations previously anticipated to pay Regulatory Fees, the impact was to reduce individual station fees from those originally proposed by 9% to 13%, depending on the class of radio station.

This adjustment prevented what would have otherwise been a roughly $3 million dollar overpayment by radio stations nationwide, significantly exceeding the FCC’s cost of regulating radio stations in FY 2019.  The fact that the FCC listened to the concerns of broadcasters, investigated the discrepancy between 2019 station data and that of prior years, and made appropriate changes to fix the problem, is heartening, particularly given that stations’ only options are paying the fees demanded, seeking a waiver, or turning in their license.

Terrestrial satellite TV stations also received a requested correction to their fee calculations.  As noted above, the FCC is transitioning from a DMA-based fee calculation methodology to a population-based methodology for TV stations.  To phase in this new methodology, the Commission proposed to average each station’s historical and population-based Regulatory Fee amounts and use that average for FY 2019 before moving to a fully population-based fee in FY 2020.

In calculating the average of the “old” and “new” fees, however, the FCC neglected to use the reduced fee amount historically paid by TV satellite stations, which is much lower than that paid by non-satellite TV stations in the same DMA.  As a result, a TV satellite station might have seen its 2019 fees jump by tens of thousand of dollars over FY 2018, only to see them drop again in FY 2020.  The FCC acknowledged that its intent in adopting the phase-in was not to unduly burden TV satellite stations in FY 2019, and it therefore recalculated those fees using the lower historical fee amounts traditionally applied to such stations.

While these reductions are a rare win against ever-increasing regulatory fees, there remain big picture issues that Congress and the FCC need to address in the longer term.  Significant among these is the FCC’s reliance on collecting the fees that support its operations from the licensees it regulates (a burden not a benefit), while charging no fees to those that rely on the FCC’s rulemakings to launch new technologies on unlicensed spectrum or obtain rights against other private parties via the FCC’s rulemaking processes (a benefit not a burden).  Such a narrow approach to funding the FCC makes little sense, particularly where it unduly burdens broadcasters, who, unlike most other regulatees, have no ability to just pass those fees on to consumers as a line item on a bill.

We live in a time of disruption.  Disruption affects all areas of the economy, but surely the most affected has to be the communications sector.  If any government agency can claim to be the regulator of this disruption, it must surely be the FCC.  Yet despite the FCC’s position at the forefront of these changes, its Regulatory Fee process is mired in a system in which broadcasters are left holding the bag for more than 35% of the FCC’s operating budget (once again, burden not benefit).  Even as the FCC spends more of its time and resources on rulemakings, economic analysis, and technical studies surrounding new technologies and new entrants into the communications sector whose main goal is to nibble away at broadcasters’ spectrum, audience, and revenue, it still collects regulatory fees only from the licensees and regulatees of its four “core” bureaus – the International Bureau, Wireless Telecommunications Bureau, Wireline Competition Bureau, and Media Bureau.  It’s an old formula, and it no longer works.