FCC Proposes Filing Requirements in New Closed Captioning FNPRM

Posted in Broadcast Regulation, MVPD Regulation

The FCC released a Second FNPRM yesterday asking whether video programmers (networks, syndicators, and other programming producers) should file contact information and closed captioning certifications directly with the Commission and whether broadcasters and MVPDs should be tasked with monitoring programmers’ compliance.

The Second FNPRM comes just one month before new rules requiring broadcasters and MVPDs to seek certifications from video programmers regarding their compliance with new captioning quality practices become effective (pending publication of the new rules in the Federal Register).  In addition, an FNPRM released in February 2014 remains pending that proposes to shift the compliance burden for television closed captioning to video programmers from broadcasters and MVPDs.

Comments and reply comments for the Second FNRPM are due 20 and 30 days, respectively, after publication in the Federal Register.

Breaking News (or not)! Broadcaster Agrees to Six Figure Penalty For Car Ads Allegedly Styled As News Reports

Posted in Advertising Issues, Broadcast Regulation, Program Content

A Las Vegas broadcast station paid a $115,000 penalty for not disclosing that purported “Special Reports” were actually paid announcements, a serious violation of the FCC’s sponsorship identification rule.

In 2009, the station produced and broadcast so-called “Special Reports” on liquidation sales at local car dealerships.  The commercials featured a station employee posing as a journalist and broadcasting from the dealership.  The “journalist” interviewed the car dealership’s manager on the details of the sales and said she was “reporting on behalf” of the station.  The spots aired adjacent to the weekend news and featured the headline “Special Reports.”  No sponsor identification announcement or other disclosure indicting that the spots were paid for by the car dealerships was provided.

Section 317 of the Communications Act, requires broadcasters to disclose to their viewers if they have aired matter in exchange for money, services or other valuable consideration.  In this case, the station’s failure to identify the sponsor of the material was compounded by its presentation of the advertisement in the guise of a special news report.  Broadcasters should make sure to disclose the sponsor of any paid programming if it is not readily apparent that  the program is a paid advertisement.

FCC Opens Rulemaking to Modernize Broadcast Contest Rules [updated]

Posted in Broadcast Regulation, Contests

At the FCC’s November Open Meeting this morning, all four Commissioners and Chairman Wheeler voted to adopt an NPRM that will propose to bring the Commission’s disclosure requirements for licensee-conducted contests into the 21st Century.  The text of the NPRM was released shortly after the Meeting.

As numerous Commissioners and the Chairman noted, the contest rule – which requires broadcast stations to periodically announce on-air the material terms of any licensee-conducted contest – was adopted nearly 40 years ago.  Although the values of honesty, fairness, and disclosure that inform the rule have withstood the test of time, the ways in which the public accesses and consumes information have changed dramatically.

Accordingly, the NPRM proposes to allow broadcasters more flexibility in disclosing material contest terms.  Instead of broadcasting detailed on-air announcements, broadcasters will have the option of disclosing material terms via the station’s website, the licensee’s website, or any publicly available website so long as they mention on-air the “direct website address” where the terms are located each time the contest is advertised.  The NPRM clarifies that “direct website address” means the address that will take a listener or viewer directly to the web page where the contest terms are posted.  Thus, if a licensee posts a direct link to contest terms on its homepage, announcing the homepage address on-air will suffice to fulfill this disclosure requirement.  If, by contrast, a station posts contest rules on a sub-page or under a tab on its homepage, the proposal contained in the NPRM would require the licensee to include the full address of the sub-page or tabbed page in its on-air announcement. Continue Reading

FTC to Advertisers and Media: Make Adequate Disclosures, Otherwise Face Potential Enforcement Actions for “Deceptive” Ads

Posted in Advertising Issues, Broadcast Regulation

Federal Trade Commission (FTC) staff have been making the rounds to remind advertisers and media outlets how important it is to make adequate disclosures in ads, including during a marketing law conference that members of Wiley Rein’s media group attended earlier this month.  This follows the launch in September of the FTC’s “Operation Full Disclosure,” an effort designed to emphasize the need to avoid deceiving consumers by burying important information in small or hard-to-read type or fleeting references.  As part of this initiative, the FTC sent letters to more than 60 companies – including 20 of the 100 largest advertisers in the country – indicating that the agency’s review had identified deficiencies in the disclosures contained in television and print ads.  The principles outlined in the letters and ensuing guidance stem from the FTC’s thirty year-old “Deception Policy Statement,” which the agency continues to rely on today.  As far as disclosures are concerned, the FTC’s view is that if the disclosure of information is necessary to prevent deception – or is required by an FTC rule – the disclosure must be “clear and conspicuous.”  And agency staff have publicly emphasized that compliance with broadcast network clearance standards is not enough to defend against a claim of deception due to the inadequacy of a disclosure.

The FTC declined to release copies of the letters or name the companies that received them, but has published guidance for those seeking to beef up their efforts to ensure compliance with the “clear and conspicuous” disclosure requirement.  In a blog post, the agency identified “4Ps” to “help sharpen advertisers’ focus on four key considerations” relevant to its analysis.  Although the FTC has historically focused on advertisers rather than the media that carry ads, the agency has previously indicated that it retains authority to prosecute broadcast stations, newspapers, and others that carry ads containing false or deceptive claims, particularly in the context of weight-loss supplements.  Accordingly, these “4Ps” provide useful guide not only for advertisers, but for the media outlets that must decide whether to carry ads.

The FTC’s “4Ps” are: Continue Reading

FCC Warns of Possible Stored EAS Alert; Seeks Comment on EAS Procedures and Security

Posted in Broadcast Regulation, Broadcast Technology

The FCC is warning participants in the Emergency Alert System (EAS) to check their equipment to make sure it does not have a queued alert—scheduled for broadcast this weekend.  In one of two EAS-related Public Notices, the Commission’s Public Safety and Homeland Security Bureau cautioned that an EAN alert that recently was transmitted as part of a syndicated radio program included a date/time stamp for a future date—reportedly November 9.  Rather than broadcasting the message when it was received, some EAS equipment may have stored the message for broadcast at a later date.  The Public Notice advised EAS Participants “to immediately check with their equipment manufacturers to determine if they have this alert in queue for a future date, and if so, what steps they should take to eliminate the false alert before it is transmitted.”

In part as a result of the recent event, the Bureau also is seeking comment from the EAS community about how EAS Participants receive and process EAS alerts and what impact the use of the EAS outside of an actual emergency has on public safety.  The inquiry asks about how different types of participants received and responded to “unauthorized EAS alerts”; how EAS Participants process EAS alerts (including confirming their authenticity and verifying the time of the alert); what additional actions can be taken to verify that the alerts relate to an actual emergency; and what impact unauthorized EAS alerts have on public safety answering points and members of the public.  The inquiry also asks about additional actions that can be taken to avoid or mitigate the effects of an unauthorized alert and how to better educate the public about the EAS.  Comments on this inquiry are due by December 5, 2014; replies are due by December 19, 2014.

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FCC Reveals Potential Auction Compensation for Broadcasters

Posted in Corporate/Business, Spectrum, Transactions

Auction BlockFull-power TV stations in Los Angeles could receive as much as $570 million for participating in the incentive auction and relinquishing their spectrum, according to a report prepared by an investment firm and released by the FCC today.  The report provides estimated compensation on a market-by-market basis, including the maximum and median compensation for full-power and Class A stations.  According to the report, the top-five markets based on the highest potential payouts to full-power stations are: Los Angeles (DMA rank No. 2), New York (DMA rank No. 1, $490M), Philadelphia (DMA rank No. 4, $400M), Hartford-New Haven (DMA rank No. 30, $280M), and San Diego (DMA rank No. 28, $250M).

The report used a “top-down” methodology that first estimated the revenues in the forward auction based upon a clearing target of 126 MHz, with 100 MHz auctioned for wireless use at an average price of $1.50 per MHz-pop.  The report then derived a station’s potential compensation from its “value in the nationwide repacking process,” which is based upon the number of stations with which a station’s contour interferes (aka the station’s “interference volume”), the total coverage population of these constrained stations, and “spectrum scarcity” in the station’s market (i.e. channels available for the repack).

In short, the report, which qualifies its estimate based on “auction methodology currently under development,” suggests that the more difficult it is for the Commission to repack a station, the more valuable the station will be in the auction.   For instance, Houston market (DMA 9) has the same maximum value — $52M – as the Lafayette, IN market (DMA 189).  In addition, several DMAs outside the top 50 but adjacent to densely packed markets, including Providence, RI-New Bedford, MA (DMA 53), Wilkes Barre-Scranton, PA (DMA 54), Flint-Saginaw-Bay City, MI (DMA 68), Toledo, OH (DMA 76), Springfield-Holyoke, MA (DMA 114), Santa Barbara-Santa Maria-San Luis Obispo, CA (DMA 123), and Palm Springs, CA (DMA 148), all have maximum payouts of at least $100M.

However, the report comes with several caveats, and as Chairman Wheeler cautions, “the numbers are not the exact amounts you can expect to be paid in the auction.”  First, the report assumes a clearing target of 126 MHz, which may not be achievable in certain markets.  Second, the report does not account for any scoring methodology, which will be the subject of a forthcoming Auction Comment Public Notice.  Third, the report does not account for dynamic reserve pricing, a concept introduced in the Report and Order that would allow prices to continue descending until a certain interference threshold is reached.  The report also assumes that the FCC will need to reserve $5 billion of forward auction revenues to pay for FirstNet, while noting the Commission’s statements that it is “optimistic that the proceeds from the H Block and AWS-3 auctions will be sufficient to fully fund amounts for FirstNet.”

The report urges broadcasters interested in participating in the auction to “determine the current value of their spectrum usage rights and establish an internal ‘walk away’ price at which they would not elect to participate.”

In addition to providing pricing information, the FCC also released a letter from the Internal Revenue Service providing guidance on the potential tax consequences of both revenues received for license relinquishment and reimbursement for relocation costs.

Does FCC Repeal of Sports Blackout Rules Flag Trouble Ahead For Retrans Policy?

Posted in Broadcast Regulation, Copyright, MVPD Regulation

The FCC has retired its sports blackout rules.  At its September 30, 2014 meeting, the FCC unanimously adopted an Order repealing the rules, which prohibit cable and satellite providers from carrying a sports event that is blacked out on a local broadcast station.  The rules are most often associated with the National Football League, which precludes a broadcast station in a home team’s market from broadcasting a game if ticket sales do not reach a certain percentage of available seats at least 72 hours prior to kickoff.  Although very few NFL games are actually blacked out, the league narrowly avoided having to blackout three playoff games in January when corporate sponsors purchased the remaining unsold seats.

The Order acknowledges that elimination of the sports blackout rules does not necessarily alter business as usual for local broadcasters “because the NFL and other sports leagues may choose to continue their private blackout policies,” which are the subject of broadcast rights agreements.  Where the FCC rules historically have come in is to clearly prohibit cable and satellite providers from importing a distant broadcast station carrying a locally blacked out sporting event.  In describing today’s action, Commissioner Jessica Rosenworcel stated that the agency “should not support policies that prevent fans from watching their hometown teams on television.”  Commissioner Ajit Pai added, “With this decision, the FCC is officially out of the sports blackout business.”  In the absence of an FCC rule, however, cable and satellite providers still would need to obtain the necessary rights to import a sporting event from an alternate source.

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FCC Launches First Phase of New E-Filing System for Radio and TV Broadcasters

Posted in Broadcast Regulation, Broadcast Technology

“The 396-A is on file so I’ll go ahead and push the button on the 314.  Then I’ll draft the 323.”[1]  Was a finer sentence ever uttered by a broadcast attorney?  Probably, but such roll-off-the tongue eloquence will soon be a thing of the past as the FCC embraces the brave new world of the LMS filing system and Form 2100.

On September 29, 2014, the FCC announced the availability of the first phase of its new e-filing system, the Licensing and Management System (LMS).  LMS will eventually replace CDBS as the e-filing system for all radio and TV broadcasters.  Those familiar with the FCC’s Universal Licensing System (ULS) will notice similarities between the two systems.  Both require an FCC Registration Number (FRN) and FRN password to log-in and use one common form with different tabs or schedules to complete depending upon the type of application/authorization requested.

The initial phase of the LMS roll-out applies only to full-power TV stations seeking to file applications for construction permits or a license to cover a construction permit.  Both of these applications (formerly Form 301 and 302-DT, respectively) will now be part of a new single form – Form 2100.  The new form will consist of two sections.  The “main portion” of the form will ask for general information common to all broadcast applications. Information specific to particular applications will be completed on associated schedules for each type of authorization being requested.  Schedule A will need to be completed by those broadcasters seeking to obtain a construction permit for a full power TV station.  Schedule B will be required for a license to cover.  Additional schedules will be released in the future.

As of October 2, 2014, existing full power TV station permittees and licensees will be required to use the LMS system to file applications for construction permits and licenses and any amendments to pending construction permit and license applications using Form 2100 Schedule A or Schedule B.  Form 2100 is available here, and the LMS system can be found here.

[1] Translation: “The Model Equal Employment Opportunity form has been filed, so I’ll go ahead and submit the Assignment Application.  Then I’ll draft the Post-Consummation Ownership Report.”

FCC Announces New Wireless Microphone Proceeding

Posted in Broadcast Regulation, Broadcast Technology, Spectrum

The FCC announced today a new rulemaking proceeding designed to address the long-term needs of wireless microphone users.  The new NPRM comes on the heels of the Incentive Auction Order, where the Commission decided to eliminate the current two reserved channels for wireless microphones.  In a news release, the FCC acknowledges that “following the incentive auction . . . there will be fewer frequencies in the UHF band available for use by” wireless mics.

According to the Incentive Auction Order, broadcasters and cable programming networks will be permitted to operate licensed wireless microphones in a portion of the duplex gap.  In addition, any user will be permitted to operate wireless microphones in the guard bands on an unlicensed basis.  Wireless microphone users also will be able to operate on unused television channels and to register through the TV bands database registration system for protection from unlicensed TV White Space devices.  As reported in a previous WileyonMedia blog post, the Radio Television News Directors Association and Sennheiser Electronic Corporation filed petitions for reconsideration of the Order on the basis of its treatment of wireless microphones.

The NPRM seeks a comprehensive review of the licensed and unlicensed wireless mic user needs and the “different technologies that can address them, including digital technologies.” The NPRM will seek comment on rule revisions in existing spectrum bands where wireless mics operate as well as authorizing wireless mic operation in additional spectrum.  According to the news release, “the Commission intends to enable the development of a suite of wireless microphone devices and applications over the long term that can meet users’ needs efficiently and effectively.”