Category Archives: Legislative Update

Regulatory Issues from the NAB Convention

License Renewals, ATSC 3.0, Translator Interference, Ownership Rules, and Children’s TV

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

Questions about regulations from Washington don’t disappear just because you are spending time in Las Vegas, and last week’s NAB Convention brought discussion of many such issues. We’ll write about the discussion of antitrust issues that occurred during several sessions at the Convention in another post. But, today, we will report on news about more imminent actions on other issues pending before the FCC.

In his address to broadcasters at the conference, FCC Chairman Pai announced that the order on resolving translator interference complaints has been written and is now circulating among the Commissioners for review. The order is likely to be adopted at the FCC’s May meeting. We wrote here about the many suggestions on how to resolve complaints from full-power stations about interference from FM translators. While the Chairman did not go into detail on how the matter will be resolved, he did indicate that one proposal was likely to be adopted – that which would allow a translator that is allegedly causing interference to the regularly used signal of a full-power broadcast station to move to any open FM channel to resolve the interference. While that ability to change channels may not resolve all issues, particularly in urban areas where there is little available spectrum, it should be helpful in many other locations.

At another session, FCC Audio Division officials talked about the upcoming license renewal cycle. They announced that the renewal forms will be filed in the FCC’s LMS database, which was first used by radio broadcasters in connection with their Biennial Ownership Reports filed last year. The forms themselves will likely be available for completion on or before May 1 for the June 3 filing deadline for radio stations in Maryland, Virginia, West Virginia and the District of Columbia. Watch for an FCC public notice next week providing more details on the forms and filing requirements. And, in the interim, make sure that your online public file is complete and up-to-date (including the Quarterly Issues Programs lists – which, for the first quarter of 2019, should have been uploaded to the online public file no later than yesterday), as the online file will likely be reviewed by the FCC during the license renewal process. See our articles here and here on these issues.

On the TV side, the FCC said that the forms for filing for ATSC 3.0 facilities should be available shortly, so that applications can be accepted before the end of the quarter. At the conference, a consortium of stations pushing the ATSC 3.0 standard announced that they will be rolling out the new standard in 60 markets early in 2020.

Revisions to the children’s television rules relating to the amount of required educational and informational programming for children are also being considered. However, no time frame for the exact date by which any changes will be adopted was given. See our article here about the FCC’s pending review of the Children’s television rules.

The FCC Commissioners also discussed the current Quadrennial Review of the ownership rules – the proposed changes to the local radio ownership rules were a particular topic of conversation. See our post here on what changes to those rules are being discussed. All three Republican Commissioners made statements that the ownership rules need to reflect current marketplace realities. But it was also pointed out, particularly by the newest FCC Commissioner, Commissioner Starks, that the FCC principles of localism, competition and diversity need to be considered in any analysis of the ownership rules. Deadline for initial comments in the new Quadrennial Review is April 29.

These were but some of the legal issues discussed at the Convention. Clearly, no one wants to gamble on their regulatory future – so pay attention to the FCC decisions on these important upcoming matters.

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.

FCC Order Addresses TV White Spaces

On March 20, the FCC released an order addressing rule changes for TV white spaces devices.

The order requires TV white spaces devices to incorporate an automatic geolocation capability to ensure that the TV white spaces database has accurate location information for all devices.

The order is designed to create a more accurate database and significantly decrease the potential harm that TV white space operations can cause to TV operations going forward.

Senate Majority Leader Opposes House Version of FOIA/LORA

State Senate Majority Leader Mike Shirkey (R- 16) voiced opposition to the bill package that expands FOIA to the Legislature and the Governor’s office as passed the House of Representatives. Spokesperson for the Senator said that whatever the Senate eventually votes on would be different than the House package and legislation from other states is being reviewed. Decision on how to proceed has not been made.

The bills generally open records not currently covered under the FOIA law. There are exemptions that include constituent communications, executive appointment, caucus materials, communications between lawmakers and others.  Under the Legislative Open Records Act (LORA), the Legislature would hire coordinators to handle the requests for records. Appeals would be handled by Legislative Council, a body of House members, rather than by a court. Michigan is one of only two states where the governor’s office is fully exempt from FOIA and one of eight where the Legislature is exempt.

Michigan Supreme Court Changes Rules on Attorney Advertising

In a new rule adopted by the Supreme Court, attorney advertising must include the name and contact information of at least one lawyer “responsible for the content of the advertisement.” If it is not practical for that information to be included in an ad because of size requirements, the court said, in Rule 7.2 (d), the information must appear on the firm’s website or a website the firm uses for advertising purposes.

The proposed change is aimed at addressing such situations as a sign on a building saying “1-800-LawFirm,” for example, or lawyer ads posted on social media sites. The new rule takes effect on May 1.

Upton to Co-Chair Public Broadcasting Caucus

Congressman Fred Upton and MAB President/CEO Karole L. White (File photo)

Four seasoned federal legislators – two Democrats and two Republicans – will co-chair the Public Broadcasting Caucus in the 116th Congress.

Taking seats as co-chairs are Republicans Fred Upton (6th-MI) and John Yarmuth (3rd-KY) and Democrats Earl Blumenauer (3rd-OR) and Mark Amodei (2nd-NV).

Rep. Upton chaired the House Energy & Commerce Committee for six years, while Rep. Yarmuth chairs the House Budget Committee. Rep. Amodei is a member of the House Appropriations Committee, and Rep. Blumenauer is a member of the House Ways & Means Committee and chairs its subcommittee on trade.

Blumenauer founded the Congressional Public Broadcasting Caucus more than 20 years ago to bring his colleagues together in support of public media and the important services they provide.

On March 18, President Trump on March 18 released his fiscal 2020 budget proposal, rescinding a large portion of funding for public broadcasting.

Upton noted that he majored in journalism and understands the importance of supporting public broadcasting for communities around the country. “It is simply good public policy,” said Upton. “I’m proud to offer my steadfast support so public broadcasting can continue to provide valuable services in education and public safety to families in Michigan and across the nation.”

“I am eager to work together with the new co-chairs of the Congressional Public Broadcasting Caucus to expand understanding in Congress of the vital role of public broadcasting in communities large and small,” Blumenauer said.

Rep. Yarmuth added,. “Public Broadcasting plays a vital role in communities across America and provides an irreplaceable service to all citizens. From children’s educational content, to promotion of the arts and humanities, to providing job training and public safety information — Congress should be working to increase federal investment and expand the important services public broadcasting provides. I look forward to working with my colleagues to help lead that charge in the 116th Congress.”

Rep. Amodei said, “Without federal support for public broadcasting, many localities would struggle to survive – particularly those in rural communities like mine,” he said. “I’m pleased to be a co-chair of the Public Broadcasting Caucus for the 116th Congress, and I look forward to working with my colleagues to ensure Americans continue to have access to important public broadcasting programs and services.”

In response to the caucus’ leadership choices, APTS President/CEO Patrick Butler said, “The bipartisan nature of this leadership team reflects the bipartisan nature of public support for federal funding of public broadcasting. We look forward to working with these distinguished Members to increase this funding for the first time in 10 years and enable us to teach more children, protect more lives and property, and create more well-informed citizens to guide the world’s most important democracy.”

Advertising for CBD – Safe for Broadcasters?

David Oxenford - Color
David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

In the last few months, we probably have had more questions about advertising for CBD products than any other topic. At this point, CBD products seem to be sold in nearly every state in the country, and discussions about CBD’s effectiveness seem to be staples on national and local television talk programs. Broadcasters naturally ask whether they can advertise these seemingly ubiquitous products. Unfortunately, the state of the law on CBD at the current time is particularly confusing, as discussed in this article.

First, a primer on terminology. CBD, short for cannabidiol, is a derivative of the Cannabis sativa plant. Industrial hemp is produced from portions of a strain of the same plant containing low concentrations of the psychoactive chemical known as THC, or tetrahydrocannabinol, and hemp can also be used to produce CBD. In contrast, recreational and medical cannabis, derived from the dried flowers, leaves, and stems of the female Cannabis plant (which we’ll call marijuana to distinguish it from hemp), contains higher concentrations of THC and lower concentrations of CBD. Preliminary clinical research has shown the potential benefits of using CBD to treat anxiety, cognition, movement disorders, and pain, and certainly these properties are attributed to the substance in popular culture. But is it legal?

Although recreational marijuana use is now legal in 10 states and the District of Columbia, and medical marijuana is legal in 33 states, it remains an illegal Schedule I drug under the federal Controlled Substances Act. Possession and distribution is a felony under federal law, as is the use of radio, TV or the Internet to facilitate that distribution. Because marijuana is still illegal under federal law, we have written repeatedly that it remains a product that broadcasters are taking significant risks in advertising – even if it is legal in a particular state for medical or recreational purposes (see, for instance, our articles here and here). But now CBD is in a different category, at least if it is hemp-derived CBD with low levels of THC.

The Farm Act, passed in late 2018, removed hemp (and thus hemp-derived CBD) from Schedule I, so its possession is no longer illegal under federal law as long as the THC level is less than 0.3%. But CBD derived from marijuana remains an illegal Schedule I drug, so it is important to know how the CBD is being produced, as it helps determine whether the CBD is legal or illegal. Making the law surrounding CBD even more confusing is that, while there is no longer a federal ban on the possession of hemp-derived CBD, there is not yet a legal mechanism for widespread commercial production of CBD, except in limited circumstances, and whether the production fits under these limited circumstances is difficult to discern when a broadcaster is approached to advertise a CBD product. Moreover, other issues must be weighed in any advertising decision.

The 2018 Farm Act sets out a process for the legalization of the production of hemp products, including CBD. But, under the Act, any industrial manufacture of CBD products can only be done through state plans to regulate the sale and distribution of these products, or pursuant to a federal plan to be adopted by the US Department of Agriculture. The state plans also must be approved by the USDA before production begins. At least two states have filed requests with the USDA for approval of their state plans. Unfortunately, the USDA has not yet adopted rules for approving these programs. It held a “listening session” earlier this month on proposed rules for processing requests for approval of state plans (see the transcript of the listening session here), but it does not seem likely that rules will be adopted until much later this year, as there was much discussion during the session of trying to have the rules ready for the 2020 growing season. But there were also calls for quicker action, and more clarity on the current state of the law, including one from a representative of a trade association for supermarkets and drug stores, which face the same issues as do broadcasters – is it really legal to sell the CBD products that are already on the market?

Until the USDA has adopted rules for processing state plans, and has approved some of those plans (as well as a federal plan for states that do not act), the only manufacturing of CBD that is permitted is production authorized under a prior Farm Act from 2014. The 2014 Act only permitted hemp production projects authorized by a state or a university as part of a research program, and no widespread commercial exploitation of CBD under the 2014 Act was supposed to happen except under pilot programs as part of a research project. From some of the testimony given at the recent USDA listening session, it appears that some of the state plans for production on an experimental basis allowed for some serious operations – one company representative talking about how it had over 200 employees producing legal hemp products pursuant to one of these supposedly experimental state projects. While federal authorities may not have envisioned such large commercial production under the 2014 Act, it does not appear that there have been any federal efforts to reign in these producers.

The reason for regulatory oversight of hemp production by the USDA and the states appears to be to make sure that consumers are actually getting what they think they are buying, and also to make sure that producers take steps to reduce the risk that marijuana products (or hemp products with greater than .3% THC) become available for public consumption. See the USDA statement of principles here. In recent years, there have been numerous articles and statements from regulators suggesting that CBD products are often not what they claim to be – some allegedly having more THC than advertised, others having little or no actual CBD. The FDA is supposed to hold hearings in April about its authority over CBD, and part of that process seems to be geared toward gathering evidence as to what products are safe and what limits to put on the purity and potency of such products, and the disclosure of their contents.

Some broadcasters, after (1) discussion with their counsel, (2) investigation with the advertiser, and (3) some degree of reasonableness (avoiding sales that are done in some dark garage or from the back of a truck on one hand, to possibly being more comfortable with products sold at a big national retailer where there is some expectation that the advertiser has done some of its own due diligence), may be able to satisfy themselves about the question of whether the CBD product that they are being asked to advertise was legally produced and is otherwise lawful. After all, there are plenty of products being advertised on the radio where the broadcaster has never thought to inquire as to whether the product was legally manufactured. But that does not end the broadcaster’s consideration as to whether to run a CBD ad. In fact, there may be far more serious questions to consider, given that a particular type of CBD may be illegal under federal law.

Even though the USDA is moving to implement the provisions of the Farm Act that legalize the production and commercial distribution of hemp products with low THC levels, the FDA retains jurisdiction to prohibit uses of any cannabis product as a pharmaceutical product or food additive. Under this authority, the FDA has made clear that it still prohibits the sale of CBD (hemp-derived or otherwise) as a food additive or oral supplement (see its statement here, issued after the adoption of the 2018 Farm Act). In fact, this year, after the adoption of the Farm Act, the FDA has raided stores selling CBD as a food additive, and health authorities in several states have followed suit. As noted above, the head of the FDA announced in recent Congressional testimony that it would hold hearings on CBD, but he soon thereafter announced his resignation, leaving that timetable up in the air. Edibles and dietary supplements containing CBD will likely be a principal topic that will be considered at the FDA hearing whenever it is finally held.

Until the FDA acts, and regardless of what the USDA does with respect to hemp production, it seems to still be a federal offense to sell any CBD product that is to be ingested – whether it is as a dietary supplement or as an additive to foods and beverages – unless the FDA has approved those products. Late last year, the FDA approved the use of a CDB-based product (sold under the brand name Epidiolex) as a drug to control epilepsy seizures, but that is a very limited exception at this point. Note, again adding to the confusion, the FDA has also approved the use of certain hemp products in food, but only where they have negligible levels of CBD and THC (see, e.g. the FDA notice here). The approval of hemp as an addition to foods confuses many in the public, as hemp is often seen as the equivalent of CBD (or marijuana) so, when they see it advertised in foods or beverages, they believe it to the be the same as CBD. The FDA, however, sees these products as legally different.

Similarly, both federal and state authorities warn about making unproven health claims about any of these substances. The FDA and FTC have informally suggested that they may be concerned about any health claims made for any CBD products not backed by academic studies. With these warnings from government agencies about CBD products that make health claims or which can be ingested, and the broadcaster’s status as a federal licensee, it would seem as if steering clear of the promotion of products that are still prohibited under federal law would make sense.

But even if a broadcaster can satisfy itself that the CBD comes from legal sources, is not to be ingested, and does not make unverifiable health claims, this does not end the inquiry. The various states have differing laws on hemp products generally and CBD specifically. Some states still have not liberalized their laws along the lines of the 2018 Farm Act, and thus are still taking a hard line on any sales of hemp or CBD. Others, even including some states that have legalized recreational or medical marijuana, have rules that appear more restrictive of hemp and CBD products than of “legal” marijuana. Others have already amended their laws to effectively legalize these products. Even then, most states restrict sales to minors (and some specifically address advertising restrictions), so it would make sense for stations to observe the same kinds of rules that they do for alcohol advertisements, by keeping ads out of programming where a high percentage of the audience may be under the legal age (see our articles here and here). Stations need to do a thorough check of their state’s laws and the regulations of their state agencies to see what other rules might apply to these sales.

After all that, we are back to where we began. There are no clear answers on CBD advertising yet. Consider these factors, consult with your own attorney and give some careful thought as to whether or not to accept CBD advertising on your station, and watch for developments as they occur in the coming months.

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.

FCC approves $150M in Repack Funds for LPTVs, Radio

FCC Commissioners unanimously voted to approve $150 million in funding for low-power TV and FM radio stations that are disrupted by the post-spectrum auction repack. Congress directed the agency to add LPTVs and FMs to the funding list and set a deadline of March 23 to do it. The funding was included in the Ray Baum Act FCC Reauthorization legislation that passed last year, which set aside additional repack funding for full power TV as well as the LPTVs, translators and FMs.

FCC chair Ajit Pai said the ongoing repack “has imposed and will continue to impose” a “financial hardship” on many FM stations. But he credited Congress giving the FCC the expanded authority to reimburse radio stations, FM translators and low-power TV stations for their expenses.

“This made it much less likely that these classes of broadcasters will have to pay out of their own pockets after being forced through no fault of their own to relocate or modify their facilities,” Pai said.

State Supreme Court Orders Arguments in FOIA Case Involving Schuette

The Michigan Supreme Court will hear arguments on whether state government can claim immunity as a defense for disclosing public records. The case involves former Attorney General Bill Schuette’s refusal to conduct a search to see if his office sent emails involving public business using private email accounts.

The court ordered the arguments in Progress Michigan v. Attorney General (SC docket No.158150-1) in the case that has been ongoing for several years.The court directed the two sides to address whether the state can argue it has either a sovereign or governmental immunity defense that would cover not releasing public records, and whether the FOIA waives such an immunity.

The Court of Claims had rejected Schuette’s argument that he had immunity, but the Court of Appeals held the filing was invalid from the beginning and found for Schuette. No date was set for the arguments before the Supreme Court.

House Passes Open Records Expansion

The Michigan House has passed a package of bills adding the Governor’s office to the Freedom of Information Act and creating Legislative Open Records Act (LORA) for State Legislature. The bills have been referred to the Senate; however, it’s been reported that Majority Floor Leader Mike Shirkey (R-16) does not support the package. To date, this is the third time the House passed similar bills in the last two legislative sessions.

Under the bills, records from the Executive Office would be open under FOIA, with additional exemptions that include constituent communications, communications about gubernatorial appointments, decisions to remove or suspend an official from office and budget recommendations. The Legislature would be covered under a parallel system called the Legislative Open Records Act. It largely mirrors FOIA but includes new exemptions as well, including constituent communications and communications between legislators.