Commlaw - Mass Media

Following the Broadcasting Industry

Friday, May 26, 2006

Will Robert M. McDowell Confirmation Move Broadcast Items?

The confirmation by the Senate on Friday, May 26, 2006 of Robert M. McDowell to be the 5th FCC commissioner might spur some movement in two long pending broadcast items on the 8th floor.

Two of the broadcast items reportedly now in a hold status due to the lack of three votes are:

  • The HD radio item where Commissioners Adelstein and Copps were reportedly insisting on additional public interest obligations for the 2nd channel. This item might also take up AM nighttime HD broadcasting which has been a hot potato due to concerns over possible interference.
  • The ownership proceedings where emotions run high on media consolidation. The broadcast/newspaper same market ownership ban is expected to be taken up first although there are any number of ownership issues that have strong support as well as strong opposition. For broadcast stations in smaller markets, there may be but three unattractive choices: (1) buy the local newspaper; (2) be bought by the local newspaper; or (3) watch your competitor be bought by the local newspaper.

It will be interesting to see the FCC's agenda for its next Commission meeting.

Thursday, May 25, 2006

Allocation Streamlining -- On or Off Track?

It has been nearly one year since the FCC released its June 14, 2005 Notice of Proposed Rule Making seeking comments on proposed rule changes to its allocation and application procedures. At the time of its release, those in our industry referred to the item as "Allocation Streamlining." We were hoping for a quick turn-around on new rules.

Given the elapse of time, however, the proceeding appears to be anything but streamlined. One of the most asked questions of the FCC's Audio Division staff is: when will the Commission release its proposed allocation streamlining rule changes?

In the June 14, 2005 Notice of Proposed Rule Making, the FCC imposed a freeze on the filing of new petitions to amend the FM table of allotments. This freeze, while not significant in the short-term, has over time created a hardship for many licensees who would have otherwise used the Commission's allocation process to upgrade or move FM radio stations.

It is not anticipated that the freeze will be lifted until such time as the Commission releases its new rules. At least one broadcaster who recently obtained several new FM construction permits in FCC Auction No. 62 has reportedly been heavily lobbying the Commission to obtain a temporary or limited lifting of the freeze for FM auction applicants.

A detailed summary of the FCC's Allocation Streamlining proposals is available from Womble Carlyle.

The rule change that may prove most significant to broadcasters is to allow both AM and FM radio stations to change their licensed community of license by filing an application. This application process should be compared with the present procedure which, in the case of FM stations seeking a change in community must now proceed through a petition for rulemaking process in the FM Table of Allotments, and in the case of AM stations seeking a change in community must now await a major change filing window.

Under the proposed new rules, for both AM and FM stations a change in the community of license would be regarded as a minor change which would mean that no longer could another applicant, in the case of an FM move file a counterproposal, and in the case of an AM move file a conflicting application. Rather, the Commission's first-come/first-served rules would apply and the date of the application filing would cut-off any competing proposals.

The other changes proposed by the Commission are not likely to significantly impact broadcasters. The Commission is proposing that any proposals for new allotments be accompanied by a full application form and FCC filing fee payment. Assuming that a broadcaster has a legitimate interest in a new allotment, this should not create an impediment to a broadcaster seeking a new channel, but may go far in discouraging speculators who in the past have filed hundreds of proposals for new FM allotments.

The Commission is proposing to limit to five the number of FM station changes that may be proposed in a single rule making proceeding. This could impact some of the more creative changes broadcasters might propose. The number five, however, appears somewhat arbitrary and the FCC may not have a record upon which it can base a decision to limit such changes. Therefore, it will be interesting to see if this five change limitation is adopted by the FCC.

The FCC is proposing to accept allocation petitions for rulemaking and associated filings electronically, rather than requiring their submission on paper which is now the case. This change is long overdue and the Commission should be commended for moving forward with this.
Finally, the Commission is asking whether it should loosen its prohibition against removing the sole local radio station licensed to a community in favor of a change to a more deserving community. If there is one principle that is bedrock in allocation proceedings, it is that a proposal to remove the sole operating station in a community almost always fails. This may be the most problematic of the Commission's proposals and may not survive.

Informal inquiries to the FCC's staff yield the response that a possible release date of the new rules may be between the end of June and the end of August. Given that there are many FCC notices of proposed rulemaking that take significantly more time than one year to gel into new rules, having the allocation streamlining rules released in a little more than one year may be somewhat quick in the FCC's eyes. For those broadcasters who cannot file proposals because of the continuing freeze and cannot seek radio station improvements because the new rules have not yet been adopted, however, one year and counting will start to upset legitimate plans made by broadcasters to improve their facilities.

Tuesday, May 23, 2006

Onerous Environmental Requirements for New Broadcast Towers

If you are planning a build of a new broadcast station tower but have never heard of the Nationwide Programmatic Agreement, you are like many broadcasters who are now learning the hard way that the FCC's Media Bureau is strictly imposing its requirements on applications for new and modified broadcast facilities

Effective March 7, 2005, by Public Notice, the Commission announced that it would be applying the provisions of the Nationwide Programmatic Agreement to all broadcast station applications filed, or amended, subsequent to that date.

The Commission, of course, has had, for many years, environmental requirements for broadcast station applications. The broadcast station application form itself asks whether a "Commission grant of [the] application may have a significant environmental impact, thereby requiring an Environmental Assessment (EA)." There are eight criteria which require the submission of an EA. The Nationwide Programmatic Agreement addresses criteria 4 and 5.

The eight environmental criteria are does (or is, as applicable) the tower:

  1. involve high intensity white lighting located in residential neighborhoods
  2. located in an officially designated wilderness area or wildlife preserve
  3. threaten the existence or habitat of endangered species
  4. affect districts, sites, buildings, structures or objects significant in American history, architecture, archaeology, engineering or culture that are listed in the National Register of Historic Places or are eligible for listing
  5. affect Indian religious sites
  6. located in a floodplain
  7. require construction that involved significant changes in surface features (e.g., wetland fill, deforestation or water diversion)
  8. not comply with the FCC established guidelines regarding exposure to RF electromagnetic fields as described in OET Bulletin 65.

An FCC environmental assessment worksheet shows the specific efforts expected of applicants for each of the above categories in the event any of the above apply and an EA must be prepared and submitted to the FCC.

It was the proliferation of cell phone towers, particularly in historically and religiously sensitive areas (Indian burial grounds) that prompted Commission to strictly impose these new requirements. With any new tower or modified tower application, an applicant must now under the Nationwide Programmatic Agreement assess whether the new tower construction is exempt, and if not comply with its numerous provisions. Most new towers are not exempt, particularly if the proposed tower is over 200 feet above ground.

In a nutshell, to comply with criteria 4 and 5 above, the applicant:

  • must notify the local community of its plans
  • must notify specified Native American and Hawaiian America organizations and tribes of its plans
  • must notify local and state historic preservation organizations of its plans
  • must prepare documentation showing that there will be no actual or visual harm to existing or eligible historic sites with some of this showing prepared by a person who has certain "professional qualification standards" including a graduate degree in "Historic Architecture and one full year experience in historic architecture projects," and
  • submit this in a form to the state historic preservation organization for review.

The requirements for Nationwide Programmatic Agreement compliance must be complete prior to an applicant certifying "yes" on the environmental question to its broadcast station application. The FCC's staff has informally advised that a "yes" certification without completing the requirements of the Nationwide Programmatic Agreement, if required, will be regarded as a false certification subjecting the applicant to possible severe sanctions.

Friday, May 19, 2006

Local Public File Rules Outdated?

The Commission, by a May 19, 2006 Public Notice, is asking for comments on a Petition for Rulemaking as to whether the present local public file rules are outdated. Comments may be filed through June 19, 2006 via the FCC's electronic filing system (ECFS).

In particular, the Petition for Rulemaking questions whether the present local public file requirements have any current utility, noting the questionable benefits of the requirements to prepare and keep in the local public file items including issues/programs lists, current authorizations, citizen's agreements, contour maps, equal employment information, letters and emails from the public, the FCC's procedural manual, time brokerage and joint sales agreements, children's television reports and LPTV Class A eligibility documentation. The only documents that the petitioner suggests should remain a part of the local public file are those encompassed by the political file requirements.

As most broadcasters will acknowledge, it is not often that members of the public make a request to inspect a broadcast station's local public file. Nonetheless, as with all proposed changes in regulations, broadcasters need to ask whether a proceeding looking to change the public file rules might result in greater, rather than fewer, record keeping requirements.

The Commission in a 2004 Notice of Inquiry Regarding Broadcast Localism, which is yet to be acted upon, hinted at significant new record-keeping requirements, as well as possible new public interest obligations, to promote localism. Some of the questions asked were:
  • What qualifies as "local" programming?
  • Are public service announcement requests being denied?
  • Should broadcasters be required to air a minimum amount of local or national political and civic discourse?
  • In what ways should broadcasters be required to serve all significant segments of their communities?
  • Is voice-tracking in the public interest?
  • Do national music playlists diminish localism?
  • Should the Commission conduct audits of local public files?
  • Should LPFM be further promoted?

While the local public file Petition for Rulemaking only addresses whether the local public file rules should remain in place, that issue is necessarily intertwined with the larger question of just what public interest regulations should be imposed upon broadcast stations. Broadcasters may find that the public thinks that there are not enough regulations rather than too many, and asks the FCC to put into place requirements that are more, rather than less, burdensome than the current local public file rules.

Wednesday, May 17, 2006

HD Radio Operations in a Nutshell

As digital HD radio gains popularity, many station owners are contemplating the initiation of HD operations. Some station engineers, unfortunately, have initiated such operations without following the FCC's requirements.

There are two ways to initiate HD radio operations:

  • If the same antenna will be used with a combiner to transmit both the analog and digital signal, the FCC allows stations under its March 20, 2003 Public Notice to commence digital HD Radio operations with a notification letter to the FCC. A sample notification letter is contained in the March 20, 2003 Public Notice.
  • If, however, separate antennas will be used for the analog and digital signals, the FCC's requirements are more involved and are described in a March 17, 2004 Public Notice. The separate digital antenna must be located on the same tower as the main antenna or on a tower within three seconds of latitude and longitude, and must be at a height above average terrain between 70% and 100% of the main antenna. Most importantly, the separate antenna must be licensed as an auxiliary antenna and once licensed, a request for special temporary authority (STA) must be granted by the FCC prior to the initiation of HD radio operations.

It is the second mode of HD operations that appear to get most station licensees into trouble. Once the HD radio equipment arrives, some licensees are simply putting up the antennas and commencing HD operations without regard to the licensing and STA requirements.

The STA requirement, in particular, is burdensome on licensees as STAs are issued for time periods of 180 days. Thus, under the FCC's present scheme, once HD Radio operations are initiated, the licensee every 180 days must re-apply for an STA and pay the requisite FCC filing fee.

For those licensees who wish to broadcast multiple audio streams over HD radio, the Commission's March 8, 2005 Public Notice requires that experimental authority be requested which is an informal application contained in a letter form. No FCC filing fee is required to apply for this HD radio multiple audio stream experimental authority.

In 2004, the FCC released a Further Notice of Proposed Rule Making which remains pending. Once the issues in this proceeding are presumably clarified by the release of new rules and procedures by the FCC, it is hoped that the continuing STA requirement, in particular, will become a thing of the past.

HD radio operations are on the cutting edge and stations who go forward with this new technology are to be commended. Broadcast licensees need to be sure, however, that they fully comply with the FCC's rules and policies in initiating HD radio operations.

Monday, May 15, 2006

Payola -- the Real Problem

Many harsh things have been written and said recently about New York Attorney General Eliot Spitzer. Indeed, it's hard to open a single trade publication recently without spotting a headline and article flogging him for overstepping his bounds to wrest settlements from major record labels over "promotional consideration" paid to radio stations. One prominent newsletter dubbed him a "petty tyrant" and a "shakedown artist" and suggested that the whole scheme is to garner free publicity for his upcoming gubernatorial campaign.

The source of all this vituperation is Spitzer's frustration over what he perceived as the FCC's lethargic reaction to his investigations which found evidence of providing promotional material, covering station overhead costs and paying outright bribes in exchange for airplay, using independent promoters as conduits for illegal payments, and engaging in fraudulent call-in campaigns to skew a song's perceived popularity. Rather than fight the charges, three major labels have settled in exchange for contributing a total of $27 million to New York music-based charities. In the meantime, observers professed outrage that Spitzer had any right to meddle in matters delegated to the FCC.

Unfortunately, this is hardly the first time in recent memory that an elected official might be exceeding the powers of his or her office. As attorneys here at Womble Carlyle, we're proud to represent a wide variety of broadcasters, whose overall record of public service is truly outstanding. Yet, there's another consideration here that transcends matters of legal authority or broadcasters' actual practices - we need to consider how Spitzer's accusations appear to the 99+ percent of the public who are not directly familiar with the industry's high ethical standards and exemplary public service.

The essence of broadcasting isn't music or sitcoms but communication. After all, the basic entertainment content is increasingly available elsewhere. Radio and television thrive on - and, indeed, demand for their survival - the trust of their listeners and viewers. DJs, news anchors, sports commentators and talk show hosts all garner ratings based upon that level of trust. If audiences can't rely upon the integrity of one source, they'll quickly and perhaps permanently turn to others.

We also need to remember that ethics is largely a matter of appearance, not fact. Only slightly plausible presumptions attract lasting attention, and the taint of even a mere accusation lingers long after a final verdict of innocence. Broadcasters can't afford to place themselves in a position where they could possibly be viewed as involved in sleazy activity that compromises the crucial bonds of trust with their audiences.

We all had thought we had seen the last of the payola scandals nearly four decades ago, and the more subtle derivative abuses of the "Hit Men" as well. But how does it look to an outsider when valuable consideration is provided to a radio station by the very companies whose survival is keyed to airplay?

Few are apt to assume that there is a direct quid pro quo when stations receive "promotional consideration" (or whatever other euphemism you prefer) from a record label (as in: "Here's a thousand bucks. Now play our record.") Yet, is it really reasonable to assume that a station might not be ever so slightly more favorably disposed toward a label that showers it with gifts than toward one that doesn't? After all, playlists and programming decisions are made by people and thus are quite subjective, and it's human nature to treat others the way they treat us. Act like an arrogant jerk and doors will slam shut, but be generous and the kindness eventually will be repaid - not directly, perhaps, but somehow. Even if the connection is obscure, we all tend to do favors for those who do favors for us.

In these days of scrutiny and skepticism, broadcasting needs to distance itself from any acts that even merely suggest impropriety. It hardly matters whether Spitzer has uncovered wide-scale genuine abuse or is merely taking opportunistic cheap shots - far too much is at stake for the industry to place itself in a position where the public even suspects a reason to mistrust it. Even if there is no connection at all between consideration received and programming decisions, the whole situation simply smells bad to the public and threatens to erode the essential trust that radio and television have worked so hard to foster and upon which their future depends.

Thursday, May 11, 2006

Program Origination for FM Translators?

It appears that the FCC might be willing to entertain the possibility of FM translators doing more than just a re-broadcast of full service FM stations.

For 35 years now, FM translators have been limited to just re-broadcasting other FM signals. When the FCC first authorized FM translators, it determined in its 1970 Report and Order that the sole purpose of these FM translators would be to re-broadcast full service FM stations.

In a 1990 Report and Order, the FCC further tightened its FM translator rules by prohibiting any extension of an FM station's signal using a co-owned translator, and prohibited just about any support or business relationship between an outside-the-service-area FM translator and the full service FM station being re-broadcast. The Commission considered but refused to allow any relaxation of the FM translator programming rules based upon a concern about the "possible competitive impact" that FM translators could have on FM broadcast stations.

Randy Miller, a Taylorville, Illinois broadcaster, on April 27, 2006 filed a Petition for Rulemaking at the Commission asking that the FM translator rules be changed to allow for the local origination of programming on an FM translator. Randy in his petition defines local origination as any programming originating from a main studio that is otherwise in compliance with the broadcast station main studio rule and is located within 25 miles of the FM translator.

Randy describes his reasoning as follows:
The crux of my argument is the fact that in 1982, the FCC allowed television translators to begin locally originated programming, because the Commission has always put local service at the top of its priority list. That [television translator program origination] decision had no demonstrable adverse effect, public interest or otherwise, on television broadcasting. That's what I'm asking the Commission to do in my [FM translator] petition ... put local service to local communities, as a continued service priority. ... There are such things as live coverage of city council meetings, additional high school sports play-by-play broadcasts, additional church services, and other music formats, that a Taylorville, IL FM translator being able to locally originate, could provide the approximately 5-mile radius of listeners in the Taylorville city limits. Putting this kind of programming on my Taylorville full-power FM would not be practical, as it wouldn't apply to listeners outside the Taylorville city limits.
Somewhat surprisingly, Randy's petition was quickly placed on a May 10, 2006 FCC Public Notice asking for public comments on his proposal. The FCC's Public Notice gives until June 9, 2006 for the filing of comments in support or in opposition to his proposal. Comments may be filed through the Commission's Electronic Comment Filing System (ECFS) by referencing RM-11331.

Randy's proposal is likely to be just one of many proposals for changes to the FM translator rules. Reportedly, the NAB is preparing a petition for rulemaking that will ask the FCC allow AM stations to re-broadcast their programming on an FM translator, something that is now also strictly prohibited.

It can be expected that comments filed in response to Randy's local origination proposal will range from a plea to strictly maintain the status quo which protects existing FM stations from competition, to advocating a wide open structure under which any programming can be broadcast on an FM translator. Randy's proposal appears to be in the middle, as it requires that the programming originate from a local studio which will help serve the dual purposes of localism and program diversity.

Also in the mix for FM translators is the Commission's current Low Power FM (LPFM) proceeding. The Commission is contemplating the possibility of later-filed LPFM applications taking priority over earlier-filed FM translator applications, and even the possibility of LPFM applications bumping FM translator stations off the air. In a nutshell, the FCC's staff and LPFM proponents have come to realize that if most of FM translators applied for are granted, there will be few if any remaining opportunities for additional LPFM stations. The result of this proceeding may be that the FCC makes substantial changes in the criteria for authorizing pending but ungranted FM translator applications, and possibly even makes changes in protections to existing FM translators.

While the first reaction of many broadcasters to local program origination on FM translators, or even to AM rebroadcasting on FM translators, is likely to be adverse because of the fear of creating additional competition in local markets, I believe that broadcasters need to take a step back and ask whether, in the long run, additional broadcast facilities ultimately benefit them and broadcasting as a whole.

With all the fighting broadcasters did against LPFM, the net result was that LPFM became the one competitive broadcast facility in the marketplace that broadcasters cannot own. Competition comes from many media outside of broadcasting in today's market. I believe that broadcasters should strive to have as many outlets available to own and program as possible in their marketplace. I should note here in stating this opinion that clients of mine, as well as I, have ownership interests in FM translator facilities.

There are also possible ways that FM boosters might better serve broadcasters. Several years ago, Lake Havasu, Arizona broadcaster Chris Rolando filed a Petition for Rulemaking asking the FCC to allow FM boosters to extend the reach of an FM station if technically possible, a petition which was re-filed in response to the FCC's Allocations Streamlining proceeding.

With both FM translators and FM boosters, the question broadcasters should be asking is not how to stop such proposals in order to maintain the status quo, but rather how would the various proposals being considered assist broadcasters in expanding and solidifying their competitive positions against so many of the competing non-broadcast technologies now confronting radio broadcasting.