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 Oxenfordwrites 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.
Michigan 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.
According to the press release by the U.S. House Energy and Commerce Committee, Communications and Technology Subcommittee Chair Marsha Blackburn (R-TN) introduced legislation to roll back the FCC’s requirement that non-commercial broadcasters, in connection with the Biennial Ownership Reports that are due by December 1 of this year, get an FCC Registration Number for every person who has an attributable interest in a non-commercial licensee.
The press release states, “The FCC last year voted to overhaul their ownership requirements to improve minority ownership of broadcast stations. While most of the changes were reasonable, the FCC imposed unnecessary and burdensome ownership rules on non-commercial educational (NCE) broadcasters. Under these reporting requirements NCEs are required to include their board members as owners, raising privacy concerns, among other things. This legislation would repeal the new reporting requirements for NCE board members but will continue to require NCEs to report basic ownership information.”
As the incentive auction enters its closing stages, the FCC has issued a basic plan and detailed procedures for repacking TV stations into the smaller TV band.
The repacking involves moving hundreds of stations to new channels within 39 months.
The FCC said it will manage the channel migration in phases as several stakeholders had suggested.
In a statement, the FCC said “Recognizing that resources needed for the transition process are limited, the commission determined that a phased construction schedule would facilitate efficient use of these resources, eliminate the need for all stations to obtain their equipment or schedule tower crews at the same time and could account for the complexities that stations may face.”
Under the plan, stations will be assigned to one of 10 transition phases, each with its own testing and completion deadline, the FCC said. The completion deadline will be the last day a station may operate on its pre-auction channel.
Quiet Period Remains
The plan also clarifies, but does not lift the prohibition on broadcasters discussing any aspect of the incentive auction among themselves or publicly even though the reverse auction in which broadcaster sold spectrum is closed. The FCC imposed the so-called quiet period to prevent collusion among broadcasters that could corrupt the auction.
Last week, House Speaker Tom Leonard (R-93) announced committee assignments for the 2017-2018 term. A new committee focused on Michigan’s competitiveness was created and added to the roster this legislation session.
The full roster of policy committees and appropriations subcommittees is available here and here, respectfully.
In an article published just after noon eastern time today (1/23), Broadcasting and Cable reports that the FCC’s spectrum auction isn’t finished quite yet.
In round 4 of stage 4 (in what is essentially the clean-up phase of the spectrum incentive auction), forward auction bidders upped their bids by about $35 million, from $18,299,482,587 in round 3 January 19, the most recent bidding day, to $18,354,882,127, during a two-hour round this morning.
Round 5 of stage 4 was scheduled to continue at 2 p.m. today.
The publication notes that broadcasters’ take is already fixed at $10,054,676,822, so anything above that (and the $1.9 billion to cover auction and repacking) goes to the treasury and deficit reduction.
Bloomberg is reporting that FCC Commissioner Ajit Pai will be nominated by President Donald Trump to lead the Commission. Pai, a Barack Obama nominee, has served as the senior FCC Republican for more than three years.
NAB CEO Gordon Smith issued the following statement after hearing the Pai news. “Without qualification, NAB supports President Trump’s selection of Ajit Pai to the position of FCC chairman. Ajit Pai is a known quantity who brings integrity, good humor and a fierce intellect to the Commission. We look forward to working with him and his colleagues on a pro-growth FCC agenda that benefits tens of millions of Americans who rely on free broadcast radio and TV for the most popular content, credible news and lifeline local emergency alerts.”
Pai, who turned 44 earlier this month, has spent much of his 18 years in Washington in public service with the DOJ, Senate Judiciary Committee and the FCC. He also worked for two years as a lawyer for Verizon and spent another year representing telecommunications clients at Jenner & Block.
Pai’s first public meeting as chairman–with a 2-1 majority–will be January 31. It features a single, noncontroversial item: “Eliminate the requirement that commercial broadcast stations retain copies of letters and emails from the public in their public inspection file and the requirement that cable operators retain the location of the cable system’s principal headend in their public inspection file.”
Once again this year, the MAB partnered with Central Michigan University to bring the Governor’s annual State of the State Address.
The broadcast, along with the Democratic Response, was provided via satellite to 29 commercial and public television stations throughout the state. In addition, 33 commercial and public radio stations aired coverage anchored by Michigan Public Radio Network Capitol Bureau Chief Rick Pluta, along with Zoe Clark from Michigan Radio.
Many stations, both television and radio, also streamed the address on their websites. Overall, MAB’s efforts resulted in the address being seen and heard in every DMA in the state.
We thank CMU Public Television, WKAR-TV’s Gary Blievernicht, the Michigan Association of Public Broadcasters and the Michigan Public Radio Network for their assistance. And, of course, we thank our members for their participation!
Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The five questions below will hopefully shed some light on these issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.
1. What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?
GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.
2. What does a station need to do, in order to protect itself while negotiations are going on?
Because the penalties for playing a song without a license can be as much at $150,000 per play, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR.
3. What does the “Interim License” through September mean?
The Radio Music License Committee (RMLC) is the group that represents most commercial radio broadcasters in music royalty negotiations with the various organizations that represent songwriters. They have been trying to reach a license agreement with GMR, but have not been able to reach one at rates that they consider to be an appropriate reflection of the airplay received by songs written by GMR songwriters. RMLC has actually sued GMR, arguing that GMR has violated the antitrust laws in the negotiation process, and asking that an arbitration process be set up to determine rates (and GMR has, seemingly in response, sued RMLC).
Since it was clear that no final agreement between RMLC and GMR could be reached by January 1, to avoid having stations that play GMR music being subject to lawsuits for copyright violations, GMR has offered an interim license that lasts for 9 months. Presumably, if in that time GMR and RMLC settle their disputes and arrive at a reasonable royalty rate, and that royalty rate is less than the interim rate, some credit for part of the sums paid under this interim rate could potentially be built into the new rates.
GMR has this week reached out to many station groups with specific proposals as to an interim rate. Commercial stations that did not receive information from GMR can reach out to them and ask for the rate information. GMR has given stations until January 31 to agree to that rate, sign the interim license agreement and pay the first month’s royalties. If a station does not choose to sign the interim deal and has not negotiated its own royalty agreement, and if it continues to play music written by GMR artists, then it is potentially subject to a copyright infringement lawsuit.
4. Is this going to lead to more people making demands for payment for songs broadcast on the radio?
If GMR is successful in collecting enough money to pay its songwriters more than writers receive from ASCAP and BMI, this could encourage other organizations to create similar licensing organizations. Some large publishing companies have already suggested that possibility, and there are certain other companies that specialize in maximizing royalties for songwriters that have the potential to do the same thing. However, starting a performing rights organization like ASCAP, BMI and SESAC is not easily accomplished as it requires setting up infrastructure for collection, reporting, distribution and enforcement activities. It also requires waiting for existing contracts granting performance rights to expire. Thus, new organizations are not likely to pop up overnight.
5. Is this related at all to the radio streaming waiver with SONY that the NAB is urging stations to consider?
The GMR issues all involve the rights to perform the underlying words and music to a song, not the rights to perform a recording of that song as recorded by any particular band or singer. The recording by a particular performing artist is called a “sound recording” or “master recording.” Broadcasters do not pay for the over-the-air performance of sound recordings, but they do pay performance fees when those recordings are streamed. The Sony waiver involves the digital performance right to sound recordings, and some of the rules that apply under the license for those digital performances. It is unrelated to the GMR controversy.
For more detailed information about some of these issues, I have written a number of articles discussing music rights on my Blog – www.broadcastlawblog.com.
According to the Broadcast Law Blog, the FCC released a tentative agenda for the agency’s open meeting scheduled for January 31. This will be the first meeting without Chairman Wheeler, who is set to step down on January 20. The only item on the Republican-controlled FCC meeting agenda is the elimination of the requirement that broadcasters maintain a paper public file, open for public inspection, containing letters and emails from the public about station operations.
The FCC in the past had cited privacy concerns for requiring such communication be kept out of the online public file database, but the agency now says it believes the legacy paper requirement does little to ensure broadcasters are serving the public interest. This meeting may serve as an initial indication of how the regulatory treatment of broadcasters may change under the new Administration. The National Association of Broadcasters (NAB) supports the idea, saying it will “reduce the regulatory burdens” on commercial broadcasters while keeping up with 21st century communications.