Category Archives: Legislative Update

Copyright Royalty Board Announces Rate Increases for Webcasts

According to a report from Inside Radio, broadcasters will have to pay higher royalty fees for streaming in the next year.

The Copyright Royalty Board has announced the rates will increase 5.9 percent to $0.0018 per performance for non-subscription based webcasts like those offered by broadcast radio stations. Rates for non-interactive subscription services will rise 4.5 percent to $0.0023 per performance according to the Federal Register published on November 27.

A special discounted rate remains for noncommercial webcasters as long as they do not exceed 159,140 Aggregate Tuning Hours (ATH) in a given month on a station or single stream.

December FCC Meeting Important for Broadcasters

According to the Broadcast Law blog, the FCC released an agenda for the agency’s December meeting.

One of the main items of interest to the broadcasters is the Notice of Proposed Rulemaking, looking to determine if the FCC should amend the cap limiting one TV station owner to stations reaching no more than 39 percent of the national audience. The FCC asks a series of questions, including whether it has the power to change the cap, or if the power is exclusively that of Congress.

Also on the agency’s agenda is a proposal for the Modernization of Media Regulation, looking at whether the FCC should change some of the requirements on cable operators and other MVPDs for giving written notice to customers about changes in their operations. Additionally, the FCC is looking to adopt a new event code for its EAS system – a Blue Alert to notify the public of an imminent threat to law enforcement personnel. Read more here.

FCC To Review Ownership Caps

According to the NAB’s SmartBriefs, the FCC formally initiated a notice of proposed rule-making to review the national ownership cap for TV stations that limits the number of stations a single entity can own, which is now set at 39 percent of U.S. TV households.

The review of the ownership cap is tied to another decision made by FCC chairman Ajit Pai – the UHF discount — a formula for calculating a company’s TV station holdings against the 39 percent limit — was reinstated by Pai in April after it was eliminated by the previous FCC chair.

“Earlier this year, the Commission reinstated the UHF discount, finding that the prior FCC’s decision last year to eliminate it absent a simultaneous review of the 39 percent national cap effectively tightened the cap without determining whether that was in the public interest. Because the national cap and the UHF discount are inextricably linked, any review of one component of the rule must include a review of the other,” Pai said in a statement.

FCC To Vote on Blue Alerts

According to a report in Inside Radio, the FCC is getting ready to approve the creation of Blue Alerts. The agency scheduled a vote next month that will create the new Emergency Alert System (EAS) code “BLU” which will be similar to codes for civic emergencies and weather events.

The code would give state and local emergency management agencies the option of using the EAS to issue a warning about an imminent and credible threat to police officers’ safety  across TV and radio stations.

Three years ago Congress passed the Blue Alert Act to “encourage, enhance, and integrate Blue Alert plans” nationwide with the Justice Department coordinating the effort. To date, 27 states have adopted a Blue Alert program on their own, including Michigan, which adopted the program in October 2015.

SoundExchange Royalties Going Up for Webcasters in 2018

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP,
BroadcastLawBlog.com

The Copyright Royalty Board announced in the Federal Register, here, that the sound recording royalty rates paid to SoundExchange will be increasing next year.  In December 2015, when the CRB set the current royalty rates that apply from January 1, 2016 through December 31, 2020 (see our articles here and here), the CRB noted that the rates would increase based on increases in the Consumer Price Index. Last year, the Board determined that the CPI had not increased enough to merit an increase in the royalties. This year, based on the calculations set out in the Federal Register, there will in fact be an increase.

So, for all streaming in 2018, nonsubscription webcasters will pay a per performance royalty of $.0018 instead of this year’s $.0017. For subscription streams, the rate will increase to $.0023, an increase from $.0022 per performance rate. These rates apply to all noninteractive webcasters who pay the statutory royalty (see our article here for an explanation of the difference between noninteractive and interactive webcasters). Thus, the rate increase will include simulcasts of broadcasters’ over-the-air programming.  Noncommercial webcasters who exceed 159,140 aggregate monthly tuning hours (for which they pay $500 per year) will also pay at the $.0018 rate for performances above the tuning hour limit.

Note that these rates apply through the end of 2020. As the CRB proceedings take two years to arrive at new rates, the Board will be starting a new proceeding to determine royalty rates for 2021 through the end of 2025 starting in January 2019. It’s never too early to start thinking about the next proceeding now.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your MAB membership.

Group Submits Signatures for Prevailing Wage Repeal

Protecting Michigan Taxpayers, a group seeking a voter-initiated act to repeal Michigan’s prevailing wage law, announced that it has submitted over 380,000 signatures of registered voters to put its proposal before the Legislature.

Michigan’s current prevailing wage law requires the payment of union-scale wages on public construction projects.

The Department of State’s Bureau of Elections will take 60 days to review a sample of signatures to determine whether the group gathered at least the necessary 252,523 valid signatures from registered voters.

If it succeeded, the initiative will go to the Legislature, which will have 40 days to pass it. While Gov. Rick Snyder indicated his support for the prevailing wage and said he would veto a bill repealing it, he cannot stop a voter-initiated act passed by the Legislature under Michigan’s Constitution.

Congresswoman Dingell Raises Privacy Concerns about ATSC 3.0

Congresswoman Debbie Dingell

U.S. Congresswoman Debbie Dingell (D-MI-12) recently sent a letter to Federal Communications Commission (FCC) Chairman Ajit Pai with questions about ATSC 3.0. Specifically, she is concerned about the privacy implications the new broadcast technology standard will have on consumers.

Dingell asked questions about what types of information would be collected from consumers to implement targeted advertisements under the new standard, and how the data would be handled and protected to ensure consumers’ privacy. She also asked how many television sets will be obsolete when the new standard is fully implemented.

“Broadcasters and other stakeholders deserve credit in developing this new standard that will undoubtedly bring significant benefits to consumers including more localized safety warnings and improved picture quality,” Dingell wrote.

“It is my understanding that the new standard also contemplates targeted advertisements that would be ‘relevant to you and what you actually might want to see.’ This raises questions about how advertisers and broadcasters will gather the demographic information from consumers which are necessary to do targeted advertisements, and what privacy protections will be in place for consumers.”

Dingell also sent a similar letter to NAB’s CEO Gordon Smith.

Redistricting Proposal Collects More Than 300K Signatures

Organizers behind a ballot proposal initiative to change how Legislative and Congressional districts are drawn in Michigan have collected more than 300,000 signatures toward putting its constitutional amendment on the 2018 ballot, according to a report in Gongwer.

The organization Voters not Politicianshas set a goal of about 400,000 signatures to provide a cushion against invalid signatures, such as duplicates or people not registered to vote. The group is required to submit 315,654 valid signatures from registered voters to place the proposal on the ballot.

Their proposal would move redistricting authority out of the Legislature and put it in the hands of a 13-member commission consisting of four self-identified Democrats, four self-identified Republicans and five people who say they are not affiliated with either of the two major political parties.

The selection of commission members would come from a combination of people applying on their own and having the Secretary of State mail applications to 10,000 randomly selected registered voters. Once a pool of 60 applicants from each of the two major political parties and 80 from the unaffiliated group would be randomly drawn from the applicants, legislative leaders from both parties could veto up to five applicants. The Secretary of State would then randomly draw the names of the commission’s members from the final pool of applicants.

State House Rejects No-Fault Overhaul

Legislation to change  Michigan’s auto insurance system was defeated last week in the state House of Representatives.

HB 5013 proposed three levels of personal injury protection (PIP). A $250,000 plan – split into $225,000 for emergency care and $25,000 for post-hospital care – $500,000 and the current unlimited medical coverage for those injured in catastrophic accidents. Those levels would have provided an average savings on the PIP portion of a bill of 40 percent, 20 percent and 10 percent respectively. The bill would also have established a fraud authority, made  changes to the litigation process and limited attendant care. Changes adopted to the bill before it failed would have increased the fee schedule to 160 percent of Medicare for health care services and put a five-year sunset on the entire bill.

The bill was defeated by a vote of 63  to 45.

FCC Sets Dates for Lifting Upgrade Freeze for Unrepacked TV Stations

The FCC announced on November 6 that it will temporarily lift its 2013 freeze on certain TV station modification applications that would increase coverage areas. The freeze will be lifted on November 28 and reimposed at 11:59 p.m. on December 7, according to a news release by the media bureau.

“Lifting the freeze would let full-power and Class A TV stations that weren’t able to expand facilities in the just-ended modification windows for repacked stations (ie, stations that were not affected by the repack) to do so for the first time in nearly five years,” explained Pillsbury Chief Editor Scott R. Flick in a CommLawCenter.com article following the FCC announcement.

“The purpose of the planned thaw is to let these stations implement desired modifications of their facilities long prohibited by the freeze, as well as to react to changes in coverage and interference coming from competing stations that were repacked. By lifting the 2013 freeze before the FCC opens its planned Special Displacement Window for LPTV stations early next year, the FCC hopes to avoid having LPTV stations apply for and build out displacement facilities only to then be displaced again when these long-frozen full-power and Class A TV stations finally have a chance to modify their facilities.”

During the temporary thaw, full-power and Class A TV stations that were not assigned a new channel in the repack will be able to file for minor modifications of their facilities.

“Unlike other recent filing windows where applications filed at any time during the window were all treated as having been filed on the same day, applications filed in this window will be processed on a first come, first served basis,” Flick wrote. “That means there is a definite benefit to filing on the first day of the window.

“While most stations that avoided being moved to a new channel in the repack were thrilled by that fact, being locked in place while those all around them modify and maximize facilities has been frustrating. Now they have a chance to join other stations in nudging and jostling for position in a post-repack world. They will need to move quickly, however. Winter is coming.”