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As we reported in a previous Client Alert, full payment of all applicable Regulatory Fees for Fiscal Year 2010 must be received no later than today, August 31, 2010, at the Commission’s St. Louis, Missouri address by 11:59 PM, Eastern Daylight Time.

As in previous years, failure of a licensee to submit the required regulatory fees in a timely manner will subject it to a late payment penalty of 25% in addition to the required fee. In order to pay the fees, licensees must generate an FCC Form 159 using the FCC’s online “Fee Filer System” which can be found at: In order to access the Fee Filer System, you must have a valid FCC Registration Number (FRN) and password. Once you have successfully accessed the System, you will have the ability to review your fees. Licensees are required to either pay online with a credit card, pay online using a bank account, pay by mailing a check, or pay by sending a wire. The FCC’s instructions for filing fees can be found at:

For more information on annual regulatory fees, including assistance in preparing and filing them with the FCC, please contact any of the lawyers in the Communications Practice Section.

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Having spent a good portion of last week on the road and on conference calls talking about the latest Performance Tax developments, I heard a lot from broadcasters on the subject. For those blissfully unaware of this legislative battle, the recording industry has been seeking a financial parachute from broadcasters to help slow the rate of its descent into an economic abyss. The irony of course is that if illegal music downloads on the Internet are what has caused the recording industry’s plunge, reaching out to drag broadcasters into the abyss with them merely weakens an ally in the battle to protect content from illegal distribution over the Internet.

Famously dubbed a performance “tax” by broadcasters, the legislation sought by the recording industry would require broadcasters to pay royalties to the recording industry for playing music on-air. Beyond the obvious short term benefit of royalty checks from broadcasters that choose to retain a music-based format, the recording industry hopes the passage of a U.S. law requiring such royalties for broadcasts in the U.S. will cause foreign countries to release royalties already being collected for airplay of U.S. artists in those countries. Unfortunately, because most of the record companies are now foreign-owned, much of that money, along with royalties paid by U.S. broadcasters, would wind up in foreign hands, undercutting any argument for this “found money” being an economic benefit in the U.S. All of the royalty funds would come from the U.S., but only a portion of those funds would stay in the U.S. However, one would hope that at least some of those royalties, if they do come to pass, would actually reach the U.S. artists responsible for creating the music that the recording industry has been selling and reselling to us over the years.

Broadcasters have been successful in blocking Performance Tax legislation because of good grass roots efforts to remind Congress that radio promotes the sale of music at no charge to the record labels or to the artists that have ridden radio airplay to fame (and whose records and concert tickets continue to sell because of radio airplay). The long, sordid history of payola — the record labels’ efforts to curry airplay via cash and other payments to radio station programmers — supports broadcasters’ proposition that the “value” of radio airplay exceeds any “costs” it imposes on the recording industry.

It was therefore with great surprise that many radio broadcasters heard last week that negotiating teams for the two industries were floating a multi-part proposal to resolve the legislative impasse — a compromise that would require, for the first time, that artist (as opposed to songwriter) royalties be collected on broadcast airplay of music. While the proposal has some attractive features for broadcasters (most importantly the inclusion of FM receiving chips in cellphones), I got an earful from broadcasters absolutely incensed at the notion of promoting music and concert sales, and then being charged for doing it.

If any member of Congress thinks that “radio promotes music sales” is just a broadcaster talking point for meetings, encountering a broadcaster last week would have decisively corrected that impression. Some broadcasters I talked to had such a visceral reaction to the very concept of such payments that it didn’t matter to them what the beneficial points of the proposal were. For them, it was as if someone had told them to “pay the ransom to the kidnappers and hope for the best.” Some appreciated that it could be the pragmatic thing to do to put the issue behind them, but still found the very concept reprehensible. To be sure, there is money involved and that can sway a person’s thinking. However, a number of the broadcasters I spoke with were so fundamentally opposed to the concept that they would reject the idea even if other parts of the proposal actually resulted in more money coming in from the proposal than going out.

I understand that perspective, but lawyers are trained to assess the options, and to assist their clients in choosing the best option for that client. Often, but not always, the “best” option is the one most economically beneficial to the client. Here, some broadcasters are not interested in the economics, but in the unfairness of being forced to pay a performance royalty as any part of the package. Despite that, all broadcasters should give the compromise proposal a careful look, if only to sharpen their understanding of the numerous issues in play and how they might affect the future of radio broadcasting. There are any number of reasons why the proposal might not gain momentum, or even be possible given the dynamics of Washington, and I hope to address those in a future post. For now, radio broadcasters should suppress the instinct to reflexively ignore it, and instead talk to their colleagues and counsel about the issues this proposal raises for their future, and for the future of their industry.

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The FCC has opened a rulemaking proposing reforms to its broadband health care initiatives for rural and tribal areas. The FCC’s Notice of Proposed Rulemaking originally released in July was published in the Federal Register today, which establishes the deadline for submitting Comments and Reply Comments in the proceeding. Comments in response to the Notice of Proposed Rulemaking are due on September 8, 2010. Reply Comments are due on September 23, 2010.

Chief among the proposals contained in the Notice of Proposed Rulemaking are:

• Creating a health infrastructure program that would support up to 85% of the construction costs of new regional and statewide broadband networks serving public and non-profit health care providers where broadband is currently unavailable or insufficient;
• Creating a health care broadband services program that would subsidize 50% of the monthly recurring costs of access to broadband services for eligible public or non-profit rural health care providers; and
• Expanding the class of health care providers eligible to receive these funds to include skilled nursing facilities, renal dialysis centers and facilities, and certain off-site administrative offices and data storage centers that perform support functions for health care providers.

We discussed the details of this Notice of Proposed Rulemaking in a recent Client Advisory. Health care providers, as well as rural and tribal communities interested in improving their broadband access for local health care services, should get involved in this proceeding. It is important to provide the FCC with real world examples of the needs and problems faced in providing modern health care services in your community so that those needs are taken into account as the FCC attempts to craft its rural health care initiative.

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The FCC is moving quickly to implement the Satellite Television Extension and Localism Act of 2010 (STELA). STELA is the latest law to extend and update the original Satellite Home Viewer Act of 1998, allowing direct to home satellite carriers to deliver the signals of local television stations to subscribers. The Commission has commenced two rulemakings which, because Congress gave the FCC a deadline of November 2010 to wrap up its proceedings and adopt implementing rules, have very short comment periods.

The first proceeding deals with satellite carriers’ ability to import distant, but significantly viewed, television signals into a local station’s television market. The FCC’s proposals could result in an increase in importation of significantly viewed signals by satellite providers. Therefore, stations should familiarize themselves with their rights concerning significantly viewed signals. Comments in this proceeding are due on August 17 and Reply Comments are due on August 27. An in-depth analysis of this proceeding can be found in our Client Advisory.

The second proceeding deals with the method by which the FCC determines whether a subscriber is eligible to receive the imported signal of a distant network-affiliated station. The FCC is examining both its computerized predictive model for determining whether a particular household is “served” by the local station, as well as its methodology for making actual on-site signal strength measurements. Where a satellite subscriber seeks to receive the signal of a distant network-affiliated station, the FCC’s predictive model is used to assess whether the subscriber can receive the local network affiliate over the air. A household that is found to be “served” by the local affiliate is generally not eligible to receive the imported signal of an out of market affiliate of the same network. However, the subscriber can challenge the results of the FCC’s predictive model by seeking an on-site measurement of the local station’s signal.

STELA directs the FCC to update its predictive methodology to account for the completion of the nationwide transition to digital television, as well as to make specific modifications to the definition of “unserved” households. Comments in this proceeding are due on August 24 and Reply Comments are due on September 3. A detailed discussion of the FCC’s proposals in this proceeding can be found in a second Client Advisory released today.