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FCC Announces Dates for Mandatory National EAS Test

Posted in Broadcast Regulation, MVPD Regulation

warningThe Federal Communications Commission (FCC or Commission)’s Public Safety and Homeland Security Bureau has announced that the next nationwide test of the Emergency Alert System (EAS) will take place on September 28, 2016, at 2:20 PM EDT, with a secondary test date of October 5, 2016, if necessary.

According to the FCC’s public notice:

The nationwide test will assess the reliability and effectiveness of the EAS, with a particular emphasis on testing FEMA’s Integrated Public Alert and Warning System (IPAWS), the integrated gateway through which common alerting protocol-based (CAP-based) EAS alerts are disseminated to EAS Participants. The test message will clearly state that the alert is only a test of the EAS. FEMA’s alert will be transmitted in English and Spanish and include both audio and the text of the test message, which can be used to populate an accessible video crawl. These improvements will help ensure that all members of the public, including non-English speakers and individuals with disabilities, will receive emergency information. The test will provide an opportunity to evaluate this and other measures that the FCC has adopted to address issues identified in connection with the 2011 Nationwide EAS Test.

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Upon Review, No Changes to “Totality of the Circumstances” Test for Retransmission Consent

Posted in Broadcast Regulation, MVPD Regulation

fcc-logoFCC Chairman Tom Wheeler announced in a blog post today that the Commission will not be modifying its rules implementing the good faith requirement for retransmission consent negotiations.

Under Section 325 of the Communications Act, a multichannel video programming distributor may not retransmit a broadcast television signal without the broadcaster’s consent.  The statute requires broadcasters and MVPDs to “negotiate in good faith” for this retransmission consent.  In implementing Section 325, the FCC has adopted a list of nine practices that constitute a per se breach of the duty to negotiate in good faith.  The Commission considers allegations of other bad faith practices under a “totality of the circumstances” standard.

In the STELA Reauthorization Act of 2014, Congress directed the FCC to evaluate its “totality of the circumstances” test.  Chairman Wheeler’s blog post stated that based on a review of the record:

[I]t is clear that more rules in this area are not what we need at this point.  It is hard to get more inclusive than to review the “totality of circumstances.”  To start picking and choosing, in part, could limit future inquiries.  So, today I announce that we will not proceed at this time to adopt additional rules governing good faith negotiations for retransmission consent.

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Beware: Higher Fines for FCC Violations Coming July 1, 2016

Posted in Broadcast Regulation, Indecency

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The Federal Communications Commission (FCC) has adopted new, higher, fines for violations of its rules and the Communications Act.  These new fines go into effect on July 1.

Why the change?  The FCC has long been required to update the fines that it assesses on companies that are found to have violated its rules or the Act, and does so periodically.  In 2015, however, the President signed into law the 2015 Inflation Adjustment Act, which was designed to improve the effectiveness of civil monetary penalties and maintain their deterrent effect.   The new law directs federal agencies to adjust their penalties for inflation each year, and requires agencies to publish “catch up” rules this summer to make up for lost time since the last adjustments.  The FCC was required to publish interim final rules by July 1.

What is the impact?  The maximum penalties for violating the FCC’s rules or the Act by broadcast stations have increased.  With one exception, the maximum penalty has risen nearly $10,000 from $37,500 to $47,340 for each violation or each day of a continuing violation, and from $400,000 to $473,402 for a continuing violation.  The statutory maximum penalties for violating the indecency laws have always been higher than the general maximums, and have increased accordingly.  After July 1, a broadcaster can be fined $383,038 for any single indecent broadcast (up from $350,000), up to a maximum of $3,535,740 for a continuing violation of the indecency laws (up from $3,300,000).  Common carriers, equipment manufacturers, and others regulated by the FCC also saw their maximum potential fines increase.

The changes to the broadcast maximum fines are significant, but pale in comparison to the increases implemented by other agencies. Indeed, because some agencies had not adjusted their maximum fine amounts for 10 years or more, the increases outside of the FCC were even greater.  For example, the maximum fines for violating some Federal Trade Commission requirements more than doubled, rising from $16,000 to $40,000, in rule changes that become effective on August 1, 2016.  Indeed, prior to the enactment of the new law, it was estimated that its implementation would lead to an increase in government revenue of more than $1.3 billion over the next ten years across all agencies subject to the new law’s terms.

What is the FCC focused on?  Recent broadcast-related fines have not been in areas where the FCC tends to impose the statutory maximum penalties.  However, a review of FCC Consumer Complaint Data indicates that the backlog of indecency complaints continues to grow, with more than 6500 indecency complaints pending against television stations and more than 1500 indecency complaints pending against radio stations.  Other hot-button consumer issues include loud commercials and commercials/promotions.  Regardless of what types of complaints the FCC chooses to pursue, the fact is that after July 1 violators will be subject to greater potential liability than before, making compliance with the FCC’s rules and the Communications Act all the more important.

The $88.4 Billion Question – What’s Next in the Incentive Auction?

Posted in Broadcast Regulation, Spectrum

auction-block-150x140The FCC has announced that the total clearing cost for the reverse auction (the aggregate of provisionally winning bids) is $86,422,558,704.

Under the final stage rule, the proceeds from the forward auction (net of bidding credits and impairment discounts) must be sufficient to cover incentive auction costs, which include: (1) the aggregate of broadcaster clearing costs, (2) approximately $226 million to cover the FCC’s costs for conducting the auction, and (3) $1.75 billion for the TV Broadcaster Repacking Fund.  Accordingly, the forward auction must generate $88.4 billion for the auction to close in the first stage.

Although this stage of the reverse auction is over, the quiet period remains in effect!  During the quiet period, broadcasters should not disclose any information about any station’s bids or bidding strategies.  Information covered by this rule includes, but is not limited to: (1) whether the station made an initial commitment in March; (2) whether the FCC declared the station “not needed”; (3) whether the station dropped out of the bidding at any point; (4) whether the station became frozen at any point; (5) whether the station entered into a channel sharing agreement; and (6) any non-public information that the station learned from the FCC’s bidding system (including prices and the station’s vacancy index).  The quiet period will continue until the FCC issues a public notice announcing the results of the forward and reverse auctions.

What happens next?  Forward auction applicants have until this Friday to submit their upfront payments to the FCC.  After the July 4th holiday, the FCC will issue the Qualified Bidders Public Notice, which will include additional details about bidding in the forward auction, including both practice and mock auctions that the FCC will conduct prior to the start of the clock phase.  The forward auction clock phase cannot begin until 15 business days after the FCC issues the Qualified Bidders Public Notice, so even if the FCC issues the public notice on Tuesday, July 5, the forward auction cannot begin until the last week of July.  We would not be surprised if the forward auction does not begin until early August. Continue Reading

FCC Chairman Wheeler Circulates Proposed Media Ownership Rules

Posted in Broadcast Attribution, Broadcast Regulation

fcc-logoFCC Chairman Tom Wheeler has circulated to his fellow Commissioners a proposed final rule in the 2010/2014 Quadrennial Media Ownership proceeding.  Based on an FCC fact sheet summarizing Chairman Wheeler’s proposal, the new rules would largely keep the existing media ownership regulations in place.  Although the proposed changes are few, some could be significant to broadcasters, including: (1) requiring the filing of television shared services agreements, (2) extending the ban on co-ownership of two top-four television stations in a market to network affiliation swaps, and (3) “modestly” relaxing the newspaper-broadcast cross-ownership rule.  Equally important is what the Chairman’s proposal will not do — it will not eliminate the radio/television cross-ownership rule and it will not abandon efforts to make television joint sales agreements attributable (except to make the rule “consistent with . . . Congress’s guidance on grandfathering”).

The full text of the Chairman’s proposal is not publicly available, but the details of an FCC fact sheet are available after the jump. Continue Reading

FCC Turns Up Pace of Reverse Auction

Posted in Spectrum

auction-block-150x140Beginning Monday, June 13, 2016, the FCC will conduct three rounds of the reverse auction per day, up from the current pace of two rounds per day.  Starting with round 17, Rounds will occur from 10:00 am ET – 11:00 am ET, 1:00 pm ET – 2:00 pm ET, and 4:00 pm ET – 5:00 pm ET.

For those planning vacations over the July 4th holiday, the expedited schedule is potentially significant.  Based on the UHF round decrements, the reverse auction can run a maximum of 51 rounds.  At two rounds per day, the auction could have continued into mid-July.  Under the accelerated schedule, however, Round 51 will occur on June 28th (subject to further change).

What does this mean for the forward auction start date?  We don’t know.  The forward auction will begin on the later of two business days after the close of the reverse auction or 15 business days after the FCC releases its Qualified Bidders PN.  As of this writing, the FCC still has not released the Upfront Payment PN, which is the precursor to the Qualified Bidders PN.  Accordingly, the forward auction cannot start until late July, at the earliest.

Update 3:16 pm:  The FCC has now released the Upfront Payment Public Notice, setting July 1 as the deadline for forward auction applicants to make their upfront payments.  Shortly after the upfront payment deadline, the FCC will release the Qualified Bidders PN.

FCC to Demonstrate New Online Public File Interface on June 13, 2016; New Rules Effective June 24, 2016

Posted in Broadcast Regulation, Political Broadcasting

The Federal Communications Commission (FCC) has announced that it will hold a public demonstration of the expanded Online Public Inspection File (OPIF), which will replace the current Broadcast Public Inspection File (BPIF) and which television and radio stations, cable systems, and satellite television and radio systems will be required to use for their online public files.  As previously explained, new FCC public file rules go into effect on June 24, 2016.

The demonstration will take place on Monday, June 13 at 1p.m. EDT in the Commission Meeting Room at FCC Headquarters, 445 12th Street, S.W., Washington, D.C. 20554.  Parties interested in participating online may do so by visiting this website and clicking the link for the appropriate session information.

 

NTIA Concludes UAS Multistakeholder Process; Releases Consensus Document on Voluntary Best Practices

Posted in Uncategorized

uasThe National Telecommunications & Information Administration (NTIA) has concluded its multistakeholder process on unmanned aircraft systems (UAS) and released a consensus document proposing voluntary best practices for UAS privacy, transparency, and accountability. The best practices document is the product of a 13-month process that included a request for public comment, several public meetings, and the involvement of dozens of stakeholders from the UAS industry, civil society, and academia. Although some stakeholders declined to support the resulting document, the document achieved consensus.

The resulting best practices are non-binding, but important nonetheless. Best practices could form the basis for subsequent Federal, state, or local regulation. They also could set a de facto industry standard that could guide state or federal enforcement activities. Companies that publicly commit to following the best practices may open themselves to enforcement under Section 5 of the Federal Trade Commission Act for unfair or deceptive acts or practices if they fail to comply. Continue Reading

Third Circuit Vacates Joint Sales Agreement Attribution Rule, Expresses Displeasure Regarding FCC Delay in Concluding Quadrennial Reviews, and Orders Mediation Regarding an Eligible Entity Definition

Posted in Broadcast Attribution, Broadcast Regulation, Transactions

In what will no doubt become quickly known as Prometheus III, the United States Court of Appeals for the Third Circuit has issued its opinion reviewing the latest of the Federal Communications Commission’s (“FCC’s”) decisions (or lack of decisions) in the Quadrennial Review of its media ownership rules pursuant to Section 202(h) of the Telecommunications Act of 1996.  At issue was the FCC’s 2014 determination that, although it lacked sufficient information to conclude the 2010 review, it had a sufficient record on which to effectively expand the local television ownership rule by treating certain television joint sales agreements (“JSAs”) as “attributable interests” akin to ownership.

Section 202(h) imposes an obligation upon the FCC to review its media ownership rules every four years, to determine whether those rules remain necessary in the public interest, and to repeal or modify any rule that does not meet that standard. Since 1998 (the first review following adoption of the media ownership review mandate in 1996), the FCC’s periodic review decisions have been the subject of requests for judicial review and remands.  As it now stands, the FCC has yet to complete any such review to a reviewing court’s full satisfaction.  In the most recent litigation, media company petitioners challenged the FCC’s decision to attribute television JSAs and its failure to complete the 2010 quadrennial review in a timely fashion, while citizens’ groups faulted the FCC for its refusal to adopt an appropriate definition of “eligible entity” for purposes of rules designed to increase minority and female ownership.  In essence, the FCC was faced with challenges from both sides, and the Third Circuit, at least in part, sided with the challengers in all respects.

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The New Online Public File Rules Go Into Effect on June 24, 2016

Posted in Broadcast Regulation, Political Broadcasting

The Federal Communications Commission (FCC or Commission) has announced that its new online public file rules, adopted in January of this year, will go into effect on June 24, 2016.

Beginning on June 24, 2016, the following entities must place all new public file material into the online public file database:

  • Commercial Radio Stations located in the top 50 Nielsen Audio radio markets with 5 or more full-time employees;
  • DBS providers;
  • Cable systems with 1,000 or more subscribers; and
  • SDARS licensees.

By December 24, 2016, these same entities must have uploaded all existing public file material to the online public file database, except that existing political file material may be excluded.  Simultaneously with the expansion of the online public file obligations to cover new services, the FCC is rolling out a new public file database with enhanced capabilities.  The new database will go live on June 24, 2016.  The Commission will transition all existing public file material (for television stations) into this new database by that date.  The expanded database will have several features requested by broadcasters, including the ability to:

  • Connect to third-party web hosting services (i.e., Dropbox, Box);
  • Upload a document into multiple folders;
  • Move a document between folders while preserving the original upload date; and
  • Update the Closed Captioning contact information.

Beginning May 12, 2016, the new public file database is available for users to test, and can be found here: https://publicfiles-demo.fcc.gov/admin/.  Note that this database is only available for testing at this time.  Any material uploaded here prior to June 24, 2016 will be deleted.  Television broadcasters should continue uploading material to the existing public file database until June 24.  The FCC will also host a webinar to explain the features of the public file database at a date to be announced.

The FCC will entertain waiver requests from entities that believe that transitioning to the online public file will impose an undue burden.  Parties requesting a waiver must provide information documenting the economic hardship that they will incur, their technical inability to comply, or other reasons justifying a waiver.  The Commission indicated that it will give “careful consideration” to requests by commercial radio stations with between five and ten full-time employees and that it will be “favorably inclined” to grant requests from very small radio stations with fewer than five full-time employees that require additional time.

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