Category Archives: Legislative Update

Forward Auction Finishes At $19.6 Billion

The FCC announced last week that the forward auction has ended with $19.6 billion raised. Of this total, broadcasters will receive about $10 billion, with $1.75 billion going to broadcasters that incur costs in repacking and moving to a difference channel in the post-auction spectrum channel reassignment. More than $6 billion will go to the U.S. Treasury for deficit reduction.

The auction resulted in 84 megahertz of TV spectrum being repurposed for broadband use.

According to the FCC, the agency will prepare a Closing and Channel Reassignment Public Notice announcing the formal close of the incentive auction and providing information about the winning bidders and the post-auction TV band, including:

  • The results of the reverse auction, including the winning stations, the markets they serve, their incentive payments, their successful bidding option (moving off-air or to a different band), and whether they indicated an intent to channel share.
  • The results of the forward auction, including the winning bidders, the prices paid, and the specific frequencies they won in the assignment phase. The public notice will set the deadline by which winning bidders will then file “long form” applications to apply for licenses to operate on those frequencies.
  • The post-auction channel assignments for all reverse auction-eligible stations who will remain on the air after the auction.
  • The date by which each station must transition off its pre-auction channel.

The release of the Closing and Channel Reassignment Public Notice also marks the start of the 39-month transition for stations that are required to move.

MAB Attends Drone Bill Signing

02142017MacGregorBillSigning2FB
The MAB were a guest of Governor Snyder on February 14 as he signed Senate Bill 992 into law.
This legislation allows a person that authorized by the Federal Aviation Administration (FAA) to operate unmanned aerial systems (aka drones) for commercial purposes in a manner consistent with the authorization. The new law also sets up a legislative drone task-force to develop statewide policy recommendations on the use/operation of drones, and must include a member recommended by the MAB to represent the broadcast industry.

Senate Committee Passes FOIA Exemptions

capitol3Information on bids, quotes or proposals involved in a procurement process would be exempt from the Freedom of Information Act (FOIA) until after the contract is awarded under Senate Bill 69, which was voted out of the Senate Government Operations Committee. The information would be publicly available after a vendor is selected, but trade secrets, proprietary and other financial information about a company that may cause competitive harm to the company would not be available through a FOIA request under this legislation.

According to the bill sponsor, Senator Rick Jones (R-24), the purpose of the bill is that companies would not be able to see other companies’ contracts. “When companies find out that a department of state is going to do a process, they FOIA to see how much a state has to pay to make their bid higher, which hurts taxpayers,” Jones said. According to a report in Gongwer, Senator Jones said that by including this protection, he is also hopeful that companies, especially in the health care industry, will take another look at bidding on state projects in Michigan because their financial interests or trade secrets can continue to be kept from competitors. Officials with the Department of Technology, Management and Budget testified in support of the legislation.

MAB attorney John Ronayne III researched the bill and, though according to Mr. Ronayne certain parts of the bill are already covered under a FOIA exemption, trade secrets clearly are not. The MAB never likes to see exemptions to FOIA, but in this case we feel that the trade secret exemption is reasonable as long as it is narrowly applied.

FCC Releases First EEO Audit for 2017

Over 200 radio and almost 80 TV stations named in the audit notice, including Michigan stations.

David Oxenford - ColorBy: David Oxenford, Wilkinson Barker Knauer, LLP
www.broadcastlawblog.com

In the swirl of news about the deregulatory efforts of the new FCC, one could almost forget that there are still many regulations in place that require significant amounts of paperwork retention by broadcasters. That point was hammered home last week,  when the FCC released its first EEO audit letter of 2017 for radio and TV broadcasters. The FCC’s public notice announcing the commencement of the audit includes the audit letter that was sent to all of the targeted stations. The list of over 200 radio stations subject to the audit is here. The list of almost 80 TV stations is here. Responses are due March 28, 2017. As employment information for all stations within a named station’s “employment unit” must be provided in response to the audit, the reach of this notice goes far beyond the 300 stations targeted in the audit notices. While the FCC is considering a proposal to allow online recruiting sources to suffice to meet a broadcaster’s wide dissemination requirements (as we wrote here), that proposal is still at an early stage and, as this audit notice evidences, the underlying rules remain in place.

The FCC reminds stations that were targeted by the audit to put a copy of the audit letter in their public file. The response, too, must go into the file. For all the TV stations hit by the audit letter, and those radio stations that have already converted to the online public file, that will mean that the audit letter and response go into that FCC-hosted online public file.

The Commission has pledged to randomly audit 5% of all broadcast stations and cable systems each year to assure their compliance with the Commission’s EEO rules – including the requirements for wide dissemination of information about job openings and non-vacancy specific supplemental efforts to educate a station’s community about job opportunities in the media industry. We recently summarized FCC EEO issues here, reminding broadcasters of the possibility of being audited. The FCC also has the opportunity to audit larger broadcasters’ EEO performance when they file their FCC EEO Mid-Term Report. We also wrote about the start of the obligations for the filing of FCC Form 397 EEO Mid-Term Reports – which started the year before last for radio groups with more than 11 full-time employees and last year for TV licensees with 5 or more full-time employees in a few months, and are filed on the 4th anniversary of the filing deadline for the station’s license renewal – which will give the FCC another chance to review station EEO performance.

The audit letter requires all stations with five or more full-time (30 or more hours per week) employees to provide a significant amount of information about their EEO programs and recruiting efforts (including copies of their two latest Annual EEO public file reports and documentation backing up the efforts listed on those reports). Even stations with fewer than five full-time employees need to report the job titles of their employees and the number of hours they are assigned to work each week, and provide any information about law suits, EEOC complaints or similar employment actions brought as a result of equal employment or discrimination matters. Information about any time brokerage agreement must also be disclosed.

If any station in your cluster is on the list, all stations in that “station employment unit” (a group of commonly owned stations serving the same area with at least one common employee) must respond. But, if a cluster has been audited in 2014 or 2015, or if its renewal was granted in the last 18 months, the FCC may allow you to avoid responding to this audit – but you have to request that “pass” from the FCC. If a station that is being audited is involved in an LMA with another broadcaster, the audit may require that the broker provide employment information as well as the licensee.

All stations should review the audit letter as it provides a good outline of the documents that stations should be retaining to demonstrate their compliance with the FCC’s EEO rules. For more information about compliance with the EEO rules, see our post about an EEO webinar in which I participated, held by the FCC in early 2012 to explain its EEO rules. Also, you can find a link to a presentation that I did just over a year ago on the EEO rules for broadcasters, here. You may also want to review the last set of fines for broadcast EEO violations, about which we wrote here.

Many broadcasters complain that the EEO rules are among the more burdensome paperwork requirements, and no doubt much time and money will be spent responding to this audit notice. But whether a broader review of the EEO requirements, beyond simply looking at the acknowledgement that online recruiting is how recruiting is now done, will be in the cards at the FCC remains to be seen.

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 membership.

Pai Revokes Wheeler’s Regulations

fcc-logo_dark-blueFCC Chairman Ajit Pai announced that the commission was revoking a number of orders and reports issued in previous Chairman Tom Wheeler’s term, what Pai called “midnight regulations.” Pai said, “In the waning days of the last administration, the Federal Communications Commission’s bureaus and offices released a series of controversial orders and reports. In some cases, commissioners were given no advance notice whatsoever of these midnight regulations.”

Among the repealed orders was one requiring tougher scrutiny of any joint sales and shared services agreements proposed by the broadcasters. NAB spokesman Dennis Wharton said: “NAB is pleased that Chairman Pai is eliminating unlawful and arbitrary processing guidelines governing broadcast joint sales and shared service agreements. These regulations unfairly punished smaller broadcasters attempting to conserve resources to reinvest in localism and high quality programming.”

Chairman Pai Institutes Greater Transparency

According to a report by TVNewsCheck, FCC Chairman Pai on February 7, released a “process reform measure” that changes previous commission procedure that he said he has sometimes found “inappropriate and disrespectful.”

Pai said, “I started a pilot program under which the Federal Communications Commission publicly released the text of two items to be voted upon at the agency’s upcoming Feb. 23 meeting. This program is designed to give Americans greater insight into the commission’s thinking about meeting items.  Accordingly, I pledge that during my tenure as chairman, my office will share with every commissioner’s office every item that will be considered at an open meeting before anyone in my office discusses the content of those items publicly or the FCC releases the text of those documents.”

FCC Lifts Quiet Period for Broadcasters

According to a report in Broadcasting & Cable, the FCC lifted the quiet period and enabled broadcasters who participated in the incentive auction to talk freely and negotiate among themselves to buy or sell their stations.

In January of 2016, the FCC imposed the gag order to prevent broadcasters from colluding before or during the reverse auction bidding. The FCC stated that the prohibition is no longer necessary as the reverse auction part of the spectrum auction is now closed. “Broadcasters are free to negotiate assignments or transfers of broadcast licenses or other transactions involving a transfer of control of a licensee that has been involved in the reverse auction,” the FCC said in a public notice. The quiet period is still in effect for wireless carriers bidding for spectrum in the forward auction.

Walden Applauds Pai’s Move to Increase FCC Transparency

(L-R) Greg Walden (R-OR) and Marsha Blackburn (R-TN)
(L-R) Greg Walden (R-OR) and Marsha Blackburn (R-TN)

U. S. House Energy and Commerce Chairman Greg Walden (R-OR) and Communications and Technology Subcommittee Chairman Marsha Blackburn (R-TN) issued a press release commending FCC Chairman Pai on taking steps to increase the agency’s transparency by releasing the text of two proceedings for public comment.

The lawmakers wrote, “This is the type of transparency we’ve been urging the FCC to implement for the last several Congresses. Then-Commissioner Pai and Commissioner O’Rielly had long pushed for greater transparency during Chairman Wheeler’s tenure…We applaud Chairman Pai’s decision to release the text of the FCC’s proposed AM revitalization and next generation broadcast items. We’re glad to see these items being advanced and look forward to working with Chairman Pai to create a more open, transparent and accountable FCC.”

In January, the House of Representatives unanimously passed H.R. 290, the Federal Communications Commission Process Reform Act of 2017, sponsored by Chairman Walden. H.R. 290 contained provisions that would make the FCC more efficient, transparent and accountable through reforming the commission’s processes and ensuring the FCC regulates in an innovative and dynamic way. Part of the bill included the transparency reform FCC Chairman Pai announced.

FCC Deregulates Public File Requirement Re: Letters from the Public

Ajit Pai
Ajit Pai

New FCC Chairman Ajit Pai chaired his first Commission meeting with a Commission consisting of two Republicans (Pai and Michael O’Rielly) and one Democrat (Mignon Clyburn). The Commissioners unanimously approved a proposal to eliminate a rule requiring commercial TV and radio broadcast stations to maintain copies of correspondence (both letters and emails) from the public in a locally maintained public file. Full language of the Report and Order is available here.

The Commissioners stated that, in today’s world of social media, the requirement for the retention of letters in a paper public file is no longer necessary. National Association of Broadcasters’ EVP/Communications Dennis Wharton commented, “NAB applauds the FCC for its bipartisan decision to eliminate archaic correspondence file requirements and we thank Commissioner O’Rielly for his leadership on this issue. The order serves as a strong demonstration of Chairman Pai’s commitment to curtailing burdensome regulations that hinder broadcasters’ ability to operate, create jobs and serve the public interest.”

David Oxenford writes that the change will become effective once published in the Federal Register, following approval of rule change by the Office of Management and Budget under the Paperwork Reduction Act.  Until that publication, the rule remains in effect, so stations shouldn’t rush to the dumpster with their correspondence files just yet.

Scott Flick, in the CommLawCenter, notes that TV stations have been required to have all other portions of their public file online for a while now. Radio stations, on the other hand, have only recently begun to move their public files online, with commercial stations that are located in the top 50 markets (and which have five or more full-time employees) having to have uploaded all documents (except for the political file) by December 24, 2016. Because such stations have only had to upload their political file documents on a going-forward basis since June 24, 2016, unless such a station elects to also voluntarily upload all of its last two years of political documents (the political file retention period), it cannot eliminate its physical public file until June 24, 2018, at which point the station will have uploaded on a going-forward basis two years of political file documents.

All other radio stations, including noncommercial stations, are not required to upload their public file documents until March 1, 2018, and again, that excludes political file documents, which only must be uploaded on a going-forward basis beginning on that date. As a result, radio stations in this “Second Wave” won’t have all of their public file documents (including political file documents) online until March 1, 2020. Consequently, these stations won’t get the benefit of eliminating their physical public file until 2020 unless they elect to upload all public file documents, including the political file, earlier than that.

Bills Expand FOIA to Legislature and Governor’s Office

capitol3Michigan House of Representatives held a bi-partisan press conference last week announcing reintroduction of the legislation to expand open record laws to include the Legislature and Governor’s office. Last session, the House overwhelmingly passed the legislation, but it stalled in the Senate.

The 11-bill package is the first major initiative announced by the new House. The bills would mostly end the exemption the governor has always had from the Freedom of Information Act and create the Legislative Open Records Act (LORA) that declares what records of the Legislature would become newly public.

LORA contains several exemptions from open records requests, including:

  • Constituent communications due to privacy concerns;
  • Personnel records that are personal in nature, such as human resources files;
  • Records relating to an ongoing internal or legislative investigation or litigation;
  • Advisory communications within the public body or between public bodies;
  • Trade, commercial or financial records that are provided confidentially to assist in public policy;
  • Communications regarding bill drafting, sergeant-at-arms security issues and auditor general records; and
  • Records exclusively maintained by legislative caucuses.