Think You Can Require Contest Entrants to “Like” Your Page? Not Anymore! Says Facebook

Posted in Advertising Issues, Contests

Facebook has announced a policy change that is likely to alter the manner in which many companies conduct contests and promotions using the social networking website.  Under existing Facebook policy, contests and other promotions frequently required entrants or those seeking to take advantage of a promotion to “like” a Facebook page before seeing certain content or becoming eligible to enter or participate.  This practice is commonly referred to as “like-gating,” which Facebook explains occurs “when you force a Facebook user who has not already liked your Page to like your Page before they can see content.”

Under the new policy, which goes into effect on November 5, 2014, Facebook will prohibit Page-owners from incentivizing users to “like” a Page in order to access content.  This ban applies not only to entry into contests or sweepstakes, but also other content – such as songs or written material – and coupons, discounts, and other rewards.  The bottom line is that businesses will now need to gain “likes” based on whether visitors to their Pages want to connect with and hear from them, rather than the promotions they offer.  Failure to comply can result in Facebook taking remedial action, up to and including disabling Pages.

This change represents just another in the constantly evolving list of terms and conditions that apply to social media platforms such as Facebook, Twitter, Pinterest, and Instagram.  Businesses running contests, sweepstakes, and other promotions therefore now need to ensure that their activities comport with not only a complex web of state and federal laws, but also the ever-changing requirements of these social media websites.

Federal Register Publication Begins Flurry of Activity In Incentive Auction Proceeding

Posted in Broadcast Regulation, Spectrum

Auction BlockThe FCC’s Report and Order in the incentive auction proceeding was published today in the Federal Register—the first in a series of events that will occur over the next several months in advance of the incentive auction of broadcast spectrum.

Based on today’s publication date, petitions for reconsideration of the Incentive Auction Report and Order will be due on or before Monday, September 15, 2014.  It is a near certainty that some parties will petition for reconsideration—the question is how many and what effect it will have on the FCC’s timeline for the incentive auction.  In December, FCC Chairman Tom Wheeler expressed his belief that the Commission can “conduct a successful auction in the middle of 2015.”  However, Chairman Wheeler noted that meeting that deadline would require achieving several milestones along the way.

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FCC Seeks Comment on Extending Online Public File to Radio Stations and MVPDs

Posted in Broadcast Regulation, MVPD Regulation

The FCC yesterday released a Public Notice seeking comment on whether it should initiate a rulemaking proceeding that would require broadcast radio stations, cable systems, and other MVPDs to post their public inspection files to the FCC’s online database.

Currently, the online public file requirements apply only to broadcast television stations.  The Public Notice comes in response to a Petition for Rulemaking filed by the Campaign Legal Center, Common Cause, and the Sunlight Foundation to expand the online public file requirement (including the political file component) “to cable and satellite systems.”  In recent months, these same organizations have filed complaints with the FCC against numerous television stations based on a review of their online political files, alleging failures to comply with the rules governing political ad disclosures.  Notably, the FCC acted on the group’s request in just a week’s time, and added radio to the proposal on its own initiative.  This may signal an intent on the Commission’s part to foster efforts by public interest groups to analyze political spending.

The Commission initially declined to require radio stations and MVPDs to maintain an online public file, citing an insufficient record and an easier initial implementation of the online public file process.  However, it did delegate authority to Commission staff to allow radio stations to voluntarily post their public files online.  The Public Notice notes that “Commission staff is analyzing the budget and technical issues that are involved in allowing radio licensees to upload documents to the online public file voluntarily.”

Currently, broadcast television stations must post public file material, including information concerning political advertising buys, to a publicly accessible online file hosted by the FCC.

Comments on the Public Notice are due August 28, 2014, and reply comments are due September 8, 2014.

FCC Orders Clarify Closed Captioning Waiver Standard

Posted in Broadcast Regulation, MVPD Regulation, Online Video

Two decisions released last week shed light on how the FCC will review petitions for exemption from the closed captioning rules under the “economically burdensome” standard.

The Consumer and Governmental Affairs Bureau granted Gerald Bryant TV, Inc., producer of the music show JBTV, a “temporary exemption” of two years from captioning.  In 2012, Bryant operated at a net loss of more than $140K and had net current liabilities of almost $560K, which persuaded the Bureau that “having to captioning its program will exacerbate these losses and possibly lead to the termination of the program.”  The two-year reprieve “will give Bryant ample time to locate ways to comply with the closed captioning requirements,” especially “given the evolution of technology, potential drops in the cost of captioning over time, and the possibility that the financial status of Bryant may change.”

Bryant’s two-year temporary exemption from the closed captioning rules is the first such waiver granted by the Bureau.  Perhaps what tipped the balance in Bryant’s favor is that his losses were so significant that even the public interest groups – usually uniform in their opposition to any waiver of the closed captioning rules – agreed that a limited waiver appeared to be appropriate. Clearly, the Bureau is sending a message that it will interpret the “economically burdensome” standard very narrowly.

This message was reinforced in the Bureau’s decision to deny a similar petition by First Lutheran Church of Albert Lea (FLC), producer of the worship service show Peace & Power.  In 2012, FLC and its production affiliate operated at an aggregate net profit of more than $42K and had total net current assets of almost $188K.  The Bureau determined that “FLC could have begun providing closed captioning and still have operated at a profit” of about $33K in 2012, and its net current assets are “further evidence that the provision of closed captioning would not be economically burdensome.”

FCC Seeks Comment on Pandora’s Petition for Relief from the Communications Act’s 25% Foreign Ownership Benchmark

Posted in Broadcast Regulation, Foreign Ownership, Music Licensing

In the latest chapter of the attempt by Internet streaming music provider Pandora to acquire a South Dakota radio station, the Federal Communications Commission (FCC) has asked for comments on the petition for declaratory ruling that Pandora filed in late June.  The petition, as we explained previously, is the first one filed by an entity seeking to exceed the 25% benchmark for foreign investment in broadcast licensee parent companies imposed by Section 310(b)(4) of the Communications Act.  The FCC had previously applied a de facto rule prohibiting such investment, but in November of last year clarified that it would consider, on a case-by-case basis, proposals to exceed the 25% benchmark in the broadcast context.

As the FCC Public Notice requesting comment explains, Pandora’s petition states that although it has reason to believe its level of foreign ownership is less than 25%, it cannot demonstrate compliance in accordance with the guidelines set out by the FCC’s Audio Division in connection with Pandora’s application.  Those guidelines are derived from a 1974 internal FCC staff memo and require applicants seeking to demonstrate that they have foreign ownership of less than 25% to engage in a complex, multi-step analysis.  Among other things, an applicant with widely held shares must first ascertain the citizenship of as many of its shareholders as possible, and then conduct a statistically valid survey to determine the citizenship of the remaining shareholders.  If a shareholder does not respond to the survey or provides information that does not allow the applicant to determine with certainty that the shareholder is domestic, then the applicant must assume that the shareholder is foreign.

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FCC Adds IP Captioning Obligations to Video Clips

Posted in Broadcast Regulation, Broadcast Technology, MVPD Regulation, Online Video

Update (7/14):  The FCC released the text of the Second Order on Reconsideration and Second Further Notice of Proposed Rulemaking Monday.

The FCC adopted an Order today at its Open Meeting which expands the agency’s IP captioning rules to online video clips, subject to some important carve-outs that will be addressed in a Further Notice of Proposed Rulemaking.  The IP captioning rules currently exempt video clips, defined as “excerpts of full-length programming,” and apply only to full-length video programming that has previously aired on television with captions.

The new rules will phase in beginning in 2016.  Specifically, by January 1, 2016, video programming distributors (VPDs) must provide captions for “straight lift” clips of pre-recorded programming.  By January 1, 2017, montages of straight lift clips must be captioned.  Finally, by July 1, 2017, VPDs must provide captioning for clips of live and near-live programming; however, VPDs will have a grace period of 12 hours for live programming and 8 hours for near-live programming.  “Live programming” is programming “shown on television substantially simultaneous with its performance,” and “near-live programming” must be performed and recorded less than 24 hours prior to first airing on television.

Notably, the Commission indicated that it will entertain waiver requests based on the economically burdensome standard.  In addition, it clarified that the closed captioning quality rules, which take effect January 15, 2015, will apply to IP video clips.

The new rules also come with three important carve-outs.  First, clips posted before the appropriate phase-in deadlines do not need to be captioned after the deadline passes.  In other words, clips that are currently posted and that will be posted prior to the phase-in deadlines do not need captioning.  Second, the rules do not currently apply to “advance video clips,” which are clips posted online after the phase-in deadline but before the clip airs on television.  The Further Notice seeks comment on this exemption, which is of particular interest to stations that post clips of breaking news before the breaking news airs on television.  Third, the rules apply only when VPDs post clips on their own website or app, not when the clip is posted by third-party websites.  The Further Notice also seeks comment on this exemption.

The Further Notice also asks about decreasing or eliminating the grace period for live and near-live programming, a question Commissioner Pai deemed “odd” considering that the rule does not take effect for three years.  In addition, the Further Notice seeks comment on “mash-ups,” which the FCC defines as video packages that contain content shown on television with captions along with video not subject to the rules, such as online-only content.

We will provide further updates on comment deadlines when the Order and FNPRM are released and subsequently published in the Federal Register.

MVPD Faces $2.25 Million Forfeiture For Retransmitting Broadcast Stations Without Obtaining Consent

Posted in Broadcast Regulation, MVPD Regulation

The FCC has issued a $2.25 million forfeiture against Houston multichannel video programming distributor (MVPD) TV Max and its affiliates for continuing to retransmit six broadcast television stations after their agreements had expired.  The Forfeiture Order follows a June 2013 Notice of Apparent Liability, in which the Commission proposed the forfeiture.

Prior to January 1, 2012, TV Max had retransmission consent agreements with Fox Television Holdings, Inc.; Univision Communications, Inc.; Post-Newsweek Stations, Houston, Inc.; and ABC, Inc. for the six stations in question.  By March 2, 2012, however, each of those agreements had expired – yet TV Max continued to retransmit the signals of those stations without consent.  TV Max claimed that it was no longer required to obtain retransmission consent for those stations under the master antenna television (MATV) exception to the retransmission consent requirement.  Under that “narrow” exemption, an MVPD can provide a signal obtained using an MATV system without entering into a retransmission consent agreement only if: (1) the signal is available to the subscriber at no charge and at the subscriber’s option; and (2) the antenna facility is owned by the subscriber or the building owner or available for purchase by the subscriber or building owner upon termination of service.  The Commission found that although by January 1, 2012, TV Max had begun to install MATV systems on some of the buildings it serves, it did not complete the installation of those systems until July 26, 2012.  Even then, “TV Max retransmitted at least some broadcast signals received at its off-site cable headend via its fiber ring rather than through the on-site MATV system” – meaning that it would not have qualified for the exception.

The Forfeiture Order includes several points that will be of interest to broadcasters and MVPDs alike:

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Pandora Requests FCC Permission to Exceed 25% Foreign Ownership Benchmark Under Section 310(b)(4), Providing First Test of FCC’s Case-by-Case Approach to Broadcast Foreign Investment

Posted in Broadcast Regulation, Foreign Ownership, Music Licensing

Just over a year ago, Internet streaming music provider Pandora filed an application seeking FCC consent to acquire a South Dakota radio station, KXMZ(FM).  As we explained at the time, Pandora was motivated in part by a desire to qualify for lower royalties for public performances of musical works in the repertories of the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) that are made via Pandora’s webcasting service.  Those lower rates are available to the owners of terrestrial radio stations, but not to pure-play webcasters like Pandora.  ASCAP and BMI promptly opposed Pandora’s attempt to qualify for the lower rates, with ASCAP launching an attack on Pandora’s assignment application.  Among other things, ASCAP raised questions regarding Pandora’s ability to demonstrate compliance with the FCC’s foreign ownership limits.

At the time of ASCAP’s initial objection, the FCC had applied a de facto rule prohibiting investment in broadcast licensee parent companies in excess of 25%.  This rule derived from Section 310(b)(4) of the Communications Act, which authorizes the FCC to disallow such foreign investment if it finds that the public interest will be served by doing so.  Late last year, however, the FCC issued a Declaratory Ruling explaining that it will consider, on a case-by-case basis, requests to exceed the 25% limit in the broadcast context.

In response to ASCAP’s objection and resulting FCC inquiries as to its demonstration of compliance with the 25% foreign ownership limit, Pandora last week filed a Petition for Declaratory Ruling requesting authority to exceed the limit.  Continue Reading

FCC: Busy 2014 Precedes Mid-2015 Incentive Auction

Posted in Broadcast Regulation, Corporate/Business, Spectrum, Transactions

The FCC continues to target mid-2015 for conducting the incentive auction, according to an Estimated Timeline of Key Events released today.  To realize that goal, the FCC plans to release in the fast-approaching third quarter of 2014 the “Auction Comment Public Notice,” which, as detailed in a previous post, will seek comment on:

  • The methodology for determining starting prices in the reverse and forward auctions;
  • The “adjustment factors,” such as a station’s potential for interference, that affect the value of a station in clearing spectrum;
  • The specific benchmarks that the FCC will use for determining the final stage rule;
  • How much market variation to accommodate;
  • How prices will change from round to round; and
  • Details about the mechanics of the auction.

Also in the upcoming quarter, the Commission plans to adopt methodology for preventing “inter-service interference” between television and wireless broadband operations.   In addition, the Commission has slotted numerous auction and repacking-related proceedings for the third quarter of 2014 that will address:

  • The future of LPTV and TV translator stations;
  • Revision of the Part 15 rules to allow use of TV White Space devices in the repacked television spectrum, in the 600 MHz Band guard bands, and on Channel 37;
  • The long-term needs of wireless microphone users; and
  • Review of the Designated Entity rules.

The FCC plans to release orders in all of these proceedings by the first half of 2015.

In the first quarter of 2015, and with 90 days advance notice to broadcasters, the Media Bureau will announce its deadline for completion and license of “authorized construction of new full power station facilities, channel substitutions for licensed full power stations, modifications to existing full power and Class A facilities granted before the April 2013 freeze, and Class A digital conversion facilities.”  Only facilities licensed before that pre-auction licensing deadline will be entitled to repacking protection.  Then, in the first half of 2015, the FCC’s Office of Engineering and Technology will publish a baseline list of broadcast facilities eligible for preservation in the repacking process along with their coverage areas and population served.  Also during this timeframe, the Media Bureau will issue a final catalog of repacking costs eligible for reimbursement.

Following “bidder education tutorials and seminars,” the FCC will then conduct the incentive auction in mid-2015.

Post-Auction Timeline

Though the FCC is not committing to specific dates for post-auction activities, the Estimated Timeline did provide some detail on relative timeframes:

  • At auction completion, the FCC will announce final television channel assignments in the Channel Reassignment Public Notice.  Within three months of this PN, broadcasters and MVPDs must provide an estimate of relocation costs.  The Media Bureau will review these estimates and issue initial allocations from the TV Broadcast Reimbursement Fund.  Also within three months of the PN, broadcasters must file construction permit applications to operate on their new channels.  The Media Bureau will establish construction deadlines and also announce a limited window for operating LPTV and TV translators to submit displacement applications.  Within 39 months of the PN, broadcasters must complete their transition to their new channel or go dark on their pre-auction channels.
  • “As soon as practicable after conclusion of the auction,” the FCC will begin disbursing proceeds to broadcasters relinquishing some or all of their spectrum.  These stations have three months to terminate operations after receiving payment (stations which will channel share will have three months to terminate operations on their existing channels).

We will continue to provide coverage of ongoing incentive auction issues on our Twitter feed (@WileyonMedia) and on this blog.  As always, please contact us with any questions.

Supreme Court Sides with Broadcasters, Holding that Aereo Internet TV Service Infringes Public Performance Copyright Rights

Posted in Copyright

In a significant win for broadcasters, today the Supreme Court of the United States declared (6-3) in a broadly-worded ruling that transmissions of television programs by the Aereo Internet television service are “public performances” that infringe copyright owners’ rights under the Copyright Act.  In American Broadcasting Companies, Inc. v. Aereo, Inc. , the Court held that, despite technological differences, Aereo’s system functions in essentially the same way as the cable television (CATV) systems that Congress intended to capture in the 1976 amendments to the Copyright Act.  Justice Breyer wrote the majority opinion.  Justice Scalia dissented, joined by Justices Thomas and Alito, and would have held that the user, not Aereo, engages in the performance.

The Court reasoned that Aereo, by providing a system that transmits television programs in near real time to its subscribers, engages in the act of “performing” copyrighted works.  According to the Court, under the language adopted by Congress in 1976, “both the broadcaster and the viewer of a television program perform,’ because they both show the program’s images and make audible the program’s sounds.”  Further, according to the Court, under the “transmit clause” of the definition of public performance, “an entity that acts like a CATV system itself performs, even if when doing so, it simply enhances the viewers’ ability to receive the broadcast transmission signals.”  The Court was influenced by the similarity between Aereo and cable systems, and by the facts that “[i]n providing this service, Aereo uses its own equipment, housed in a centralized warehouse, outside of its users’ homes.”  The Court believed that the technological distinctions between Aereo’s service and cable systems “mean[] nothing to the subscriber” and “mean[] nothing to the broadcaster.”

The Court then held that Aereo’s performances are made to the public, despite the fact that the transmissions are made from separate copies that are created for each user.  According to the Court, the differences between Aereo’s system and traditional cable systems, “concern only the behind-the-scenes way in which Aereo delivers television programming to its viewers screens.  They do not render Aereo’s commercial objective any different from that of cable systems.  Nor do they significantly alter the viewing experience of Aereo’s subscribers.”

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