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

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

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

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

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

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The fact that you are reading this tells us that you have found your way to CommLawCenter.com, our effort to simplify the gathering of information and resources relating to the communications industry, particularly regarding its legal aspects. CommLawCenter is an effort to step outside the normal confines of law firm websites and memoranda to address breaking news more directly and quickly by bringing everything under one roof. In structuring the site, we have tried to make it as flexible as possible so that it can improve where possible and adapt where needed. As it grows, we hope that you become a part of it, contributing your thoughts and advice on its continuous refinement.

But first, a bit of background: the core of Pillsbury’s communications law practice is a group of attorneys who have practiced together for many years. Most of us began our practices at a communications law boutique named Fisher Wayland Cooper & Leader. Fisher Wayland, as it was popularly known, was founded in 1934 as one of the nation’s first communications law firms by Ben S. Fisher of the Federal Radio Commission – the predecessor agency of the FCC.

The creation of the Federal Communications Commission that same year marked a new approach by the federal government to regulating the rapidly expanding segments of the communications industry. Since that time, communications technologies have improved and multiplied at an amazing pace, with Fisher Wayland, and now Pillsbury, lawyers involved at every turn: the launch of FM radio, broadcast television, cable television, satellite distribution, cellular telephone service, space-based consumer entertainment technologies, and an explosion of Internet-based communications services in recent years. In recognition of this, USA Today once described Fisher Wayland as “among the most venerable” of communications law firms.

Times change, however, and nowhere is that more true than in the communications industry. As the industry moved toward integration and consolidation, communications law boutiques needed to provide an ever-broader array of services to these expanding clients, leading many of them to merge with large and diverse firms capable of tackling any legal issue imaginable.

Why are we telling you this? Well, it was ten years ago today that Fisher Wayland merged into Shaw Pittman Potts and Trowbridge, and five years ago today that Shaw Pittman merged into Pillsbury. The result is a truly national (actually, international) firm whose lawyers remember well that it is the personal relationships (and cool technology) that make communications such a personally rewarding field in which to practice. It is therefore fitting that we are launching CommLawCenter on this anniversary. From snail mail, to fax, to email, to web distribution, to this site, our efforts to keep clients and friends informed over the past 75 years have been an ever-evolving process. CommLawCenter will allow that audience to access our content more quickly and easily than ever before. We hope you will visit us regularly, and whether you look at it as Pillsbury v.2.0 or Fisher Wayland v.4.0, that you join us at CommLawCenter as we continue to explore what the next iteration of the communications industry will look like.

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In the latest chapter of what seems like a never ending saga of the Commission’s effort to adopt new ownership rules, the U.S. Court of Appeals for the Third Circuit recently lifted its stay of the FCC’s revised cross-ownership rules adopted in 2007, which immediately allows the FCC to presume that common ownership of a daily newspaper and a broadcast station in the Top 20 television markets is in the public interest. The Court’s decision, for the first time since 1975, effectively allows the common ownership of a full-power broadcast station and a daily newspaper in the same geographic market.
In 2003, the Chairman Powell-led Commission undertook what was ultimately a highly controversial review of all of its broadcast ownership rules. With respect to newspaper/broadcast cross-ownership rule, the Commission concluded that newspapers and broadcast stations do not compete in the same economic market and that continuation of the cross-ownership ban made no sense except in the smallest markets. Before the re-write of the broadcast rules took effect, it was challenged by various parties in the Third Circuit. The Court, in the well-known Prometheus Radio Project decision, stayed the effectiveness of the re-written rules. Despite the stay, the Court actually agreed with the Commission that a blanket ban on broadcast/newspaper cross-ownership was no longer warranted, so the Court remanded the FCC’s ownership limits back to the agency for further justification.
In response to the Court’s order, the Commission in 2007, this time led by Chairman Martin, once again decided that a complete newspaper/broadcast cross ownership ban did not make sense. It fashioned a rule that presumed that waiver of the ban is waived in the public interest in certain limited circumstances. The FCC said that it would review combinations involving a daily newspaper and either one radio station or one television station in the Top 20 markets on a case-by-case basis, and presume that they were in the public interest, so long as, in the case of television/newspaper combinations, the television station was not a Top-4 ranked station, and at least 8 independent “major media voices” would remain in the market. Combinations in markets outside of the Top 20 would be presumed to not be in the public interest, unless a showing could be made that overcame the presumption.

Again, before that rule could take effect, it was appealed and the Third Circuit continued to stay it. When the leadership of the FCC changed again in 2009, the new Chairman Genachowski-led Commission told the Court that relaxation of the newspaper/broadcast cross-ownership ban adopted by the previous Martin-led Commission does not necessarily reflect the view of a majority of the current Commission. The leadership also asked the Court to continue to hold off ruling on the Martin Commission’s version of the rule until this Commission could complete its Congressionally-mandated review of the broadcast ownership rules in 2010. Despite that request, the Court lifted its stay and ordered that initial briefs in connection with the Martin Commission revisions to its ownership rules be filed by May 17, 2010.

As a result, the FCC’s relaxed newspaper/broadcast cross-ownership rule adopted in 2007 is now in effect. Broadcast/newspaper combinations can now be reviewed and granted on a case-by-case basis in accordance with the standard described above. However, before trying to enter into a new cross-ownership combination, interested parties should keep in mind that the current Commission is on record as being wary of the Martin-era version of the rule, so any hope that the current Commission is in a hurry to review any proposed combos might be misplaced. They should also realize that the Martin-era rule is subject to the Third Circuit’s review, and that it is unclear precisely how, and when (if ever), this rule’s more than thirty-five year saga will end.

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March 2010
The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ local Public Inspection Files by April 10, 2010, reflecting programming aired during the months of January, February and March 2010.

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.

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The 2010 NAB Show in Las Vegas is fast approaching! Your Pillsbury attorneys, including Dick Zaragoza, Cliff Harrington, Scott Flick, Miles Mason, Laurie Lynch Flick, Paul Cicelski and Christine Reilly will be at this annual event, which takes place in just one month, from April 10th to the 15th. We look forward to meeting and talking with our clients and friends at the show. We will be staying at The Bellagio (702-693-7111), and if you plan to attend the NAB Show and would like to see us, please contact Julia Colish in our office. Ms. Colish can be reached via e-mail (julia.colish@pillsburylaw.com) or by telephone at (202) 663-8261.

We look forward to seeing you at the NAB Show.

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This Advisory provides a review of the FCC’s political broadcasting regulations.

Introduction
Eight years after adoption of the Bipartisan Campaign Reform Act (“BCRA”) of 2002, popularly known as “McCain-Feingold,” Congress’ and the FCC’s interest in political broadcasting and political advertising practices remains undiminished. Broadcast stations must insure that a broad range of federal mandates are met, providing “equal opportunities” to all candidates using the stations facilities, affording federal candidates for public office “reasonable access” and treating all candidates for public office no less favorably than the station treats its most favored advertisers. Accordingly, it is imperative that broadcasters be very familiar with what is expected of them in this regulatory area, that they have adequate policies and practices in place to insure full compliance, and that they remain vigilant to legislative, FCC, and FEC changes in the law.

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The U.S. District Court for the District of Columbia has ruled that the Copyright Royalty Board is constitutional. The decision ends for now a long-running controversy over the legitimacy of the CRB, which sets royalty rates that webcasters pay to copyright owners– rates that webcasters see as excessively high and a threat to the industry.

The CRB is comprised of three judges appointed by the Librarian of Congress. It meets once every five years to establish the royalty rates that webcasters must pay copyright owners when using their music on the Internet. In the past, the rates set by the CRB were decried by webcasters as excessive, which ultimately led to the passage of the Webcasters Settlement Acts of 2008 and 2009. Pursuant to these statutes, several classes of webcasters, including small commercial webcasters, microcasters, and noncommercial webcasters, have been able to negotiate settlement agreements with SoundExchange, which represents the copyright holders, and agree to rates that, while still unpopular with webcasters, are nonetheless lower than those set by the CRB.

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The Federal Communications Commission recently proposed revisions to its rules as part of its stated goal to “reform and transform the agency into a model of excellence in government.” As part of its goal, the FCC has released a Second Notice of Proposed Rulemaking (“NPRM”) proposing to modify its ex parte communications rules, which govern the disclosure of communications with the commissioners and FCC staff when all parties to a proceeding are not present.

The NPRM’s proposed rule changes include the following:

  • requiring that a summary of every oral ex parte presentation be filed with the FCC, as opposed to just those presentations involving new information or arguments;
  • requiring that the filing summarize all data and arguments presented;
  • establishing a preference for electronic filing of notices of ex parte presentations; and
  • requiring faster electronic filing (within four hours) of notices of permitted ex parte presentations made during the “Sunshine Period” (the period, which typically begins a week before a public FCC meeting, during which outside communications are limited regarding items on the meeting agenda).

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Video Programming Distributors Must Notify FCC by March 22, 2010 of Certain Contact Information and Begin Compliance with Telephone Directory Listing Requirements.

Earlier this week, we advised you of a recent Commission action which could affect video programming distributors’ obligations under closed captioning complaint rules that the Commission adopted in November 2008 but which had not yet become effective. As we predicted, those Commission actions were a prelude to the rules becoming effective, which occurred with their publication today in the Federal Register. Accordingly, effective today, February 19, 2010, new timeframes governing when a video programming distributor must respond to a complaint regarding closed captioning are in effect. In addition, video programming distributors must now comply with the provisions requiring them to provide contact information for addressing closed captioning complaints to the FCC and the public.

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In response to a petition for clarification filed by DISH Network, L.L.C. (“DISH”), the FCC has issued a “limited waiver” of its requirement that video programming distributors, including television stations, publish two types of information in local telephone directories–contact information for the receipt and handling of immediate closed captioning concerns, and contact information for the receipt and handling of written closed captioning complaints.

The FCC acknowledged that its telephone directory requirement would essentially force a video programming distributor operating on a nationwide basis (like DISH) to contract with local telephone directory publishers nationwide. However, the FCC did not limit the waiver to DISH or those engaged in national program distribution. As a result, local or regional entities, including local broadcast stations, may be eligible to benefit from this waiver as well, thereby avoiding the additional costs of extensive local telephone directory listings. To take advantage of this limited waiver, however, you must not currently have “contracted for” an advertisement or other paid listing in the telephone directory.

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