Category Archives: Legislative Update

WOOD-TV, WDIV-TV Will Host Gubernatorial Debates Announced for October 12 and 24

Candidates in Michigan’s November Gubernatorial election will appear in two debates in October.  Democrat Gretchen Whitmer and Republican Bill Schuette will appear in debates hosted by WOOD-TV (Grand Rapids) on October 12 and WDIV-TV (Detroit) on October 24.

In Grand Rapids, Rick Albin, host of WOOD-TV’s political show “To the Point,” will moderate then first debate, to be held at the WOOD-TV studios.  In Detroit, WDIV-TV’s Kimberly Gill and Devin Scillian will moderate the second debate.  That debate will be held at the WDIV-TV studios.

Each debate includes questions from the moderators and will permit opening and closing statements. Debates will be televised by the hosting stations, streamed online and likely will be simulcast across Michigan on other stations.

Reminder: TV Shared Services Agreements Must Be on File with FCC

The FCC reaffirmed its requirement for commercial TV stations to disclose their Shared Services Agreements (SSAs) by uploading them to the online public inspection files. This requirement took effect on March 23, 2018. Each commercial TV station that is a party to an SSA executed before the March 23 effective date was required to place a copy of the SSA in its public file within 180 days. The deadline for those stations (September 19) has just passed.

SSAs executed after the March 23, 2018 effective date must be placed in stations’ online public files in a timely fashion. Stations must upload SSAs to a folder designated “Shared Service Agreements” on their station profile webpages. Further information can be found in the FCC’s public notice.

C-Band Satellite Dish Users Must Register by October 17

According to the Broadcast Law Blog, the FCC issued a reminder to all operators “of fixed-satellite service (FSS) earth stations in the 3.7-4.2 GHz band that were constructed and operational as of April 19, 2018″ that the filing window to license or register such earth stations closes on October 17, 2018. This band and is commonly referred to as the “C-Band” and many of the “FSS earth stations” are satellite dishes that receive programming used by both radio and TV stations. The FCC is exploring allowing additional users into this spectrum, and has warned that only registered users of the spectrum will be entitled to any protections against any new users who may be authorized.

The FCC also stipulated in the public notice that those being protected not only need to have been operating by April 19 and registered by October 17 to be protected, but those entities will need to certify that the information in their registrations is correct on a form that will be made by the agency at a future date.

Pro-Trump SuperPAC Putting More than $850K Into the 8th and 11th Congressional Districts

The pro-Donald Trump SuperPAC called America First placed a $854,000 media buy into Michigan’s 8th Congressional District and a $850,000 order into Michigan’s 11th according to a report in Gongwer.

The spending was part of a $12.5 million ad buy put into 12 competitive 2018 midterm races. The ads will start October 2.

Universities Launch Media Campaign to Boost Enrollment

The Michigan Association of State Universities (MASU) launched a campaign with the goal of increasing higher education enrollment. The campaign, which is slated to run two years, includes radio and television advertising as well as online ads and is targeted to communities that have lower rates of enrollment.

The group is promoting both opportunities for financial assistance and the career possibilities of getting a degree.

The Assocation website is here.

See an news story on the advertising campaign from WILX-TV here.

Court of Appeals Upholds Copyright Royalty Board’s 2015 Webcasting Rate Decision

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David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

On September 18, The US Court of Appeals released a decision upholding the Copyright Royalty Board’s 2015 decision setting the SoundExchange royalty rates for 2016-2020. We wrote about that decision here, and provided more details here. In any appeal of an agency decision, the Court routinely affords the agency deference in reaching its decision. The Court will not overturn that decision unless it has no basis in the record developed on the matter before the agency, or unless the agency decision was arbitrary and capricious – in plain English, the agency did not reach a logical conclusion based on the facts before it. That means that the Courts will not overturn a decision just because the agency might have logically reached another decision – but instead it will only intervene where the agency came to a conclusion that could not be logically supported. In this case, no reason to overturn the CRB decision was found.

SoundExchange on appeal had attacked the CRB decision on several grounds – arguing that several defects led to an inappropriate decision as to the rates that would have been determined by a “willing buyer and willing seller” in a marketplace, the standard to be used by the CRB in setting rates. SoundExchange attacked the benchmarks that were relied on by the CRB to set the rates (the direct licensing deals on royalties arrived at between webcasters Pandora and iHeart Media and various record companies) arguing that these rates were too low as they were negotiated in the “shadow of the statutory license.” They argued that the only direct deals that could have been done were ones that were lower than the rates established by the CRB during the prior rate term, as no music service would agree to higher rates. Arguments were also raised that these rates relied on “steering” – the prospect that labels who agreed to the rates had songs played more frequently than those that did not agree to lower rates. SoundExchange argued that not all labels could take advantage of steering (as a label can only get the benefit of steering when a service is playing less of the music of labels that did not pay for steering). The appeals also challenged the determination that a qualified auditor to check royalty compliance had to be a CPA licensed in the state where the audit was conducted.

The Court looked at all of these arguments and a few related claims, and found that the CRB had adequately justified its decision. The direct deals were the only negotiated benchmarks that existed for noninteractive webcasting services, so they were appropriate to use in setting the royalties. The Court found that there was nothing wrong with relying on agreements that did exist, rather than trying to determine what agreements might exist in some hypothetical situation where a statutory royalty did not exist. The rejection of the steering argument was also appropriate, as the CRB had found that the royalties approximated what would happen in a competitive market were there no statutory royalties where labels were competing to get their product played on music services. The Court also found that the decision as the auditors had a basis in the record.

With this decision, any lingering doubts (see our article here about the appeal being filed) about the current royalties have been resolved, and the rates will (absent an unlikely further appeal) stay in place though the end of 2020. Of course, that is not far away, and next year, the process will begin again, as the CRB starts its proceeding to determine the rates for 2021-2025. The process that seemingly never ends…..

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 Annual Regulatory Fees Due by September 25

According to the Broadcast Law Blog, the FCC released an order setting the amounts for the Annual Regulatory fees that are due by September 25.  The agency also released a Fact Sheet detailing the fees for broadcast and other licensees regulated by the Media Bureau and how those fees should be paid.

Fees are due for stations based on the FCC authorization held on October 1, 2017. The FCC also notes that expanded band AM stations, that have previously been exempt from fees as they are part of a paired license with stations in the core AM band, now have to pay fees independently from their paired station.

The Fact Sheet sets out the fees owed by radio stations based on the population they serve, and for TV stations based on the size of the DMA in which they are located. The Fact Sheet also sets out details of the payment process, and notes that those licensees whose total fees are $1000 or less are exempt from any payment obligations as their fees are considered “de minimis.”

Board of Canvassers Sets Ballot Proposals

The Board of state Canvassers unanimously certified Promote the Vote ballot proposal which means that the voters will decide whether to allow same-day voter registration and whether any eligible voter should be able to vote absentee. With the action, the proposals portion of the ballot is set. Proposal 1 will be the marijuana legalization initiative, Proposal 2 the constitutional amendment to overhaul redistricting and ban partisan gerrymandering and Proposal 3 the voting access constitutional amendment.

Court Decision: No Straight Ticket Voting in November

According to a report in Gongwer, the 6th U.S. Circuit Court of Appeals in a 2-1 decision granted a motion by the state to stay a ruling that Michigan’s ban on the straight ticket voting is unconstitutional. This means that the voters will not be able to choose a party’s slate of nominations with a single selection during the general election.

Ruth Johnson praised the decision in a statement: “Michigan now joins more than 40 other states in which voters choose the person instead of the party. For too long, important ballot questions and nonpartisan offices, including judges of all types, were skipped over by people who marked a straight ticket thinking they had voted their full ballot.”

Reminder: Lowest Unit Rate Period Now in Effect

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David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

With the lowest unit charge window for the November elections now in effect (as of September 7), we thought that it was a good idea to review the basics FCC rules and policies affecting those charges. With this election, where control of Congress may well be hotly contested and may result in competitive elections across the country, your station needs to be ready to comply with all of the FCC’s political advertising rules. Lowest unit charges (or “Lowest Unit Rates”) guarantee that, in the 45 days before a primary and the 60 days before a general election, legally qualified candidates get the lowest rate for a spot that is then running on the station within any class of advertising time and particular daypart. Candidates get the benefit of all volume discounts without having to buy in volume – i.e., the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class. But there are many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.

It is a common misperception that a station has one lowest unit rate, when in fact almost every station will have several – if not dozens of lowest unit rates – one lowest unit rate for each class of time in each daypart. Even at the smallest radio station, there are probably several different classes of advertising spots. For instance, there will be different rates for spots running in morning drive than for those spots that run in the middle of the night. Each time period for which the station charges a differing rate is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, each rotation on the station is its own class, with its own lowest unit rates (e.g., a 6 a.m. to Noon rotation is a different class than a 6 a.m. to 6 p.m rotation, and both are a different class from a 24-hour rotator – and each can have its own lowest unit rate). Even in the same time period, there can be preemptible and non-preemptible time, each with its own set of charges resulting in different classes of time, each with its own lowest unit rate. Any class of spots that run in a unique time period, with a unique rotation or unique rights attached to it (e.g., different levels of preemptibility, different make-good rights, etc.), will have a different lowest unit rate. Stations need to review each class of time sold on their station, find the lowest rate charged to a commercial advertiser for a spot of the same class that is running at the same time that the candidate wants to buy a spot, and that lowest rate will be what the candidate is charged.

One question that still comes up with surprising regularity is whether these rates apply to state and local candidates, as well as Federal candidates. Indeed they do – so if your station is running advertising for candidates for mayor or city council; or for governor or the state senate; or even for the board of education, municipal court judge, or state attorney general – they and any other candidate in any public election for which your station chooses to accept advertising gets lowest unit rates. See our past articles on this topic here and here.

In modern political elections, where PACs, Super PACs and other non-candidate interest groups are buying much political advertising time, broadcasters need to remember that these spots don’t require lowest unit rates. Even if the picture or recognizable voice of the candidate that the PAC is supporting appears in the ad, spots that are sponsored by an independent organization not authorized by the candidate do not get lowest unit rates (note, however, that spots purchased by independent groups featuring the voice or picture of the candidate may trigger public file and equal opportunities obligations for the station if the station decides to run those spots). Stations can charge these advertisers anything that the station wants for non-candidate ads – no need to stick to lowest unit rates.

From time to time stations may face the one exception to the above paragraph, where political parties are requesting lowest unit charges. In some cases, parties may in fact be entitled to these rates – but only where the spot features the recognizable voice or picture of the candidate and the party is using specific types of donations to pay for the ad. These donations are ones that are subject to political campaign donation limitations (known as “hard money”). To get lowest unit rates, the advertising purchases must be authorized and “coordinated” with a candidate (and, in Federal races (and in several states that have adopted laws on the subject), the spots should make that coordination clear with the “I approved this message tag” or, under some state laws, some variant of the tag that discloses the coordination. Not all party spots are entitled to this treatment – only this special class of coordinated expenditures – and stations are entitled to get written confirmation from the party or the candidate that the expenditures are coordinated under the election laws. If not coordinated, the parties get charged the same as any other third-party organization.

Various advertising sales packages, and how they are factored into lowest unit rate calculations, also seem to lead to many questions by broadcasters. Candidates cannot be forced to buy single-station packages to get low unit rates. Instead, the package must be broken down by the station into a price per spot for each class of spot that is contained in the package. That is done by allocating the package price to the various spots of each class that are contained in the package. Then the allocated rates, on a unit basis, are compared to other spots of the same class that have been sold on the station either on their own or in other packages to determine if the spots from this package have any impact on the station’s lowest unit rates. This allocation is done in an internal station record, which does not need to go into the public file, and does not need to be revealed to the candidate. Other than the station, only the FCC will see this allocation if they decide to conduct some sort of audit. We wrote more about this process of allocating spots in a package here.

And these are just some of the myriad issues that arise in computing lowest unit rates. Stations need to be familiar with these rules, and apply them accurately through the lowest unit rate window. Check with your own legal advisor to discuss the specifics of these issues as they arise as they are often very difficult to apply in the real world. Some of the other situations that arise with lowest unit rates, and with other political issues that come up in any election season, are covered in our Political Broadcasting Guide, available here. This article is in an update of an article from a series that we did several years ago on Political Broadcasting Basics, which we may update from time to time over the next few weeks. But until we post the updates, you can find the original articles on our blog by clicking on these links: equal opportunities, reasonable access, the no-censorship provision that governs candidate ads, and the potential for station liability for untruthful statements made in third party ads.

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.