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By Lauren Lynch Flick and Paul A. Cicelski

As promised, yesterday morning the FCC conducted a public demonstration and webcast of the interface it has developed to host the online public inspection files for television broadcast stations. As we noted last week, the database is being developed in connection with the FCC’s recent Order requiring television broadcast stations to post their public inspection files online in a central, Commission-hosted database. These rules go into effect August 2, 2012. An archived version of the FCC’s webcast can be found here.

FCC Media Bureau Chief Bill Lake opened the demonstration by emphasizing that the FCC is focused on making it easier for broadcasters to use the system and for the public to access it than has been the case with the FCC’s legacy databases and paper-based public files. Greg Elin, the FCC’s Chief Data Officer, echoed Lake’s comments and demonstrated how the new interface brings together in one place items that have historically been stored in different locations on the FCC’s website, such as having the station’s contour map from the engineering database and its current authorization accessible from the main page for the station. The new system also replaces FCC Form numbers and abbreviations with plain English and will permit stations to upload documents in most major formats to make it more “user-friendly.” Elin also said that the FCC plans to use dedicated hardware for broadcasters to use to upload items so that surges in interest on the public side will not prevent broadcasters from managing their online file pages.

The FCC has been working on such issues for some time in connection with a planned Consolidated Licensing System (CLS) which it has demonstrated on a number of occasions over the past few years. The CLS is intended to consolidate and replace the FCC’s legacy filing databases, providing uniformity in electronic filing across all of the different Bureaus and types of authorizations. Media Bureau licensees are slated to be the first to use the new system when it’s ready. It appears that the FCC has integrated the public file interface with that on-going work, providing a uniform “look and feel” between the public file interface and what might ultimately become the sole online filing location on the Commission’s website.

It remains to be seen after watching the presentation the extent to which the interface will be ready to go by the FCC’s August 2 deadline. Lake and Elin each indicated that they expected that the interface would “evolve” over time as experience with its use is gained. Moreover, Elin stated that, while most issues for the August 2 launch have been ironed out for Mozilla and Firefox users, a number of applications associated with the interface do not yet function properly with Internet Explorer. It also appears that, although the database will be connected real-time to the FCC’s current Consolidated Database System (CDBS) allowing applications that are filed to be instantaneously included in the new database, the ability to effectively “search” the new database is still a way off. Finally, it was not clear how stations will be able to both (i) allow multiple employees, engineers and counsel to access the station’s page to upload and police the contents of the public file and (ii) monitor those various agents that might act on its behalf, especially if online electronic filing of applications is integrated with this interface.

Regarding the political file, which network affiliates in the top-50 markets must begin populating with newly created political documents beginning August 2, Elgin said that the FCC intends to establish a series of files and sub-files for stations to use based on data imported from the Federal Election Commission’s website. Specifically, the FCC’s database will include separate files for federal, state, and local election ad buys. Under those, FCC proposes to include sub-folders, such as one for each Congressional district, then further sub-folders for each candidate as well as for non-candidate specific issue ads. Stations will be given tools that will allow them to retain some flexibility when designing their individual online political files, but how much customization the new database will allow remains to be seen. The FCC will support file-sharing programs that can allow multiple employees at a station to upload information about ad buys, but stations will still have to address the issues regarding user identification noted above.

Given the FCC’s efforts to make the interface useable in a variety of ways, TV stations would benefit from the opportunity to test the system, to see which file formats work best for them, to learn and implement file sharing programs, and to set up internal controls for employee access to the station’s page. Unfortunately, while Elgin did indicate that the system would be up and running by August 2, he was unable to provide a date specific regarding when the database will be available for such testing. Remembering the difficulties encountered with the roll out of the new commercial ownership report, early testing will likely be key to the success of the new database.

Historically, each time the FCC has introduced an electronic filing form to replace a paper-based form, it has allowed broadcasters a significant transition time period to acclimate to the new form. Clearly, such a timeframe has not been contemplated here so far. Therefore, at a minimum, it would be appropriate if the FCC withheld all public inspection file enforcement activity against television stations until such a time as it is certain that the new interface is functioning smoothly and broadcasters have had an opportunity to familiarize themselves with the new system.

Of course, there is the issue of the NAB’s pending emergency request with the D.C. Circuit Court of Appeals to stay the August 2 effective date of the rules, which could have the same effect. Check back frequently for updates as there is sure to be plenty of additional news prior to August 2.

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The FCC has announced that the preliminary television channel sharing rules in the FCC’s Report and Order in the Innovation in Broadcast Television Bands proceeding will become effective on June 22, 2012. The rules establish the basic framework by which two or more full-power/Class A television stations can voluntarily choose to share a single 6 MHz channel. Channel sharing is integral to clearing the television broadcast spectrum so that the FCC can auction it for wireless broadband as called for in the National Broadband Plan. The rules follow the signing of the “Middle Class Tax Relief and Job Creation Act of 2012”, which we discussed in detail in a previous post. Also called the “Spectrum Act,” that law gives the FCC authority to conduct incentive auctions to encourage television broadcasters to get out of the business or find new business models that rely on less spectrum, such as doubling up with another station on a single 6 MHz channel.

The FCC’s new rules allow a station to tender its existing 6 MHz channel to the FCC, making it available for the “reverse” or “incentive” spectrum auction. The tendering station can set a reserve price below which it won’t sell. To encourage more stations to participate in the auction, the FCC is also permitting stations, in advance of the auction, to agree to share a single 6 MHz channel after the auction. In this scenario, one of the two stations would tender its channel into the auction, and both stations would share the proceeds and operate on the remaining 6 MHz channel after the auction. The FCC’s Order makes clear that channel sharing arrangements will be voluntary, and that stations will be “given flexibility” to control some of the key parameters under which they will combine their operations on a single channel, including allocation of auction proceeds among the parties.

Each station sharing a 6 MHz channel will be required to retain enough capacity to transmit one standard definition stream, which must be free of charge to viewers. Each will have its own separate license and call sign, and each will be subject to all of the Commission’s rules, including all technical rules and programming requirements. Stations that agree to share a channel will retain their current cable carriage rights. Commercial and noncommercial full-power and Class A TV stations are permitted to participate in the incentive auction and enter into channel sharing agreements, but low power TV and TV translator stations are not.

Many more details will have to be resolved prior to the incentive auction. We recently discussed the procedural uncertainties surrounding the auction in a detailed and comprehensive interview conducted by Harry Jessell of TVNewsCheck. The transcript of the interview can be found here. At bottom, we concluded that the largest obstacle facing the FCC will be designing the auction so that a sufficient number of broadcasters find it attractive to participate.

The FCC invited us and other industry experts to participate in a Channel Sharing Workshop earlier this week. In the meantime, other Pillsbury attorneys have been actively helping stations assess the risks and opportunities of the incentive auctions, including spectrum valuation and strategies for the forward and reverse auctions and spectrum repacking. Many of the issues raised at the FCC’s Channel Sharing Workshop dealt with the intricacies of the arrangements broadcasters will have to craft to govern their relationship with a channel sharing partner. These ranged from how multiple channel “residents” will manage capital investments in facilities upgrades, to what might happen if one licensee on a shared channel goes bankrupt, sells, or turns in its license. A recording of the Workshop can be accessed here.

The FCC acknowledged that much work lies ahead of it. To that end, the FCC announced at the Workshop that the first of a series of Notice of Proposed Rulemakings concerning issues raised during the Workshop will be released in the Fall. The FCC did not predict a timeframe for completing the auction design process and establishing service rules.

As these and other issues take the fore, television broadcasters must remain engaged, shaping the process to allow them the maximum flexibility to develop relationships and business models that can thrive in the post-auction environment.

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There has been a recent uptick in class action lawsuits against video programming distributors under the Video Privacy Protection Act. The VPPA was enacted in 1988 in response to the disclosure of the video tape rental records of Supreme Court nominee Robert Bork during his confirmation hearings. Reflecting the era of its passage, the law refers to information regarding “video cassette tapes”, but is much broader, requiring those who are involved in renting, selling or distributing “prerecorded video cassette tapes or similar audio visual materials” to discard consumer information after a period of time (generally one year) and to get consumers’ consent before disclosing information about an individual’s viewing habits.

In this day and age of apps that share the songs individuals listen to and the newspaper articles they read, the VPPA has been cited as a major impediment to similar online sharing regarding video downloads and rentals. Congress has considered legislation that would amend the VPPA to permit social media sharing of an individual’s video viewing without requiring that individual’s consent on a title by title basis. While it may seem an anachronism to those accustomed to rampant social sharing, the VPPA’s requirements, and those of similar state privacy laws, apply to far more than just local video rental stores.

The attached Client Alert discusses a recent California case in which an individual brought a class action lawsuit against Sony. The suit claimed that Sony had retained the history of customers’ PlayStation Network movie and video game purchases and rentals, and that it disclosed such information to the new owner of the PlayStation Network when the network was transferred, and that the new owner then disclosed that information to advertisers.

As a review of the Client Alert reveals, any video on demand provider, whether cable, satellite, or online, needs to be knowledgeable of the requirements of the VPPA. The VPPA provides an avenue for individuals to bring class actions on behalf of thousands of affected customers, and to seek actual, liquidated, and/or punitive damages for the violation, as well as legal fees. Because of this, the financial stakes can be quite high for what might be an entirely unintentional violation of consumers’ privacy.

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The FCC today issued a Public Notice officially launching the television station license renewal cycle. The Public Notice, however, also contains an unusual new request. Specifically, the FCC asks that television station licensees or their counsel log into their accounts in the FCC’s Consolidated Database System (CDBS) and update the licensee’s and its counsel’s contact information using the Account Maintenance function. The FCC will use this information to e-mail stations a reminder that their license renewal application is due. This is a new use of the CDBS system and makes one wonder how else the FCC will be able to use CDBS to communicate with licensees in the future.

Licensees that do not have a CDBS account must create one, since, as the FCC notes, all renewal filings must be made electronically. Licensees creating new accounts, however, must both create the new account and immediately use it to file a Change in Official Mailing Address form, which is found by clicking on the link labeled “Additional non-form Filings.” Existing account holders making changes to their contact information must also follow this procedure.

The Public Notice announces that license renewal applications can be filed beginning on May 1, 2012. The first stations to file will be television stations licensed to communities in Maryland, Virginia, West Virginia, and the District of Columbia, which must begin airing pre-filing announcements starting on April 1, and file their renewal applications by June 1, 2012. We note that even though the FCC has announced that applications can be filed as early as May 1, stations should not file in advance of the schedule for their state, and that full power licensees in the first group of stations will still be airing pre-filing announcements until May 16 and should file their applications after that date.

The FCC’s Public Notice also contained some other pointers to jog memories, since most stations have not had to file this particular application in eight years. Specifically, it noted that the obligation to file a renewal application applies to all TV, Class A TV, LPTV, and TV Translator stations (even those that may still be waiting for their last renewal application to be granted), that a Form 396 EEO filing must also be made, and that noncommercial licensees must submit an Ownership Report on Form 323-E as well. Finally, the FCC reminded stations that they will need to respond to a new question which asks them to certify whether their advertising sales contracts have contained a non-discrimination clause since March 14, 2011.

The major point of the Public Notice, though, was unmistakeable. “Failure to receive a notice does not excuse a licensee from timely compliance with the Commission’s license renewal requirements.”

We’re here to help.

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March 2012

TV, Class A TV, LPTV, and TV translator stations licensed to communities in Maryland, Virginia, West Virginia, and Washington DC must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations are due by June 1, 2012.

Pre-Filing License Renewal Announcements

Stations in the video services that are licensed to communities in Maryland, Virginia, West Virginia, and Washington DC must file their license renewal applications by June 1, 2012.

Beginning two months prior that filing, full power TV, Class A TV, and LPTV stations capable of local origination must air four pre-filing renewal announcements alerting the public to the upcoming license renewal application filing. These stations must air the first pre-filing announcement on April 1, 2012. The remaining announcements must air on April 16, May 1, and May 16, for a total of four announcements. A sign board or slide showing the licensee’s address and the FCC’s Washington DC address must be displayed while the pre-filing announcements are broadcast.

For commercial stations, at least two of these four announcements must air between 6:00 pm and 11:00 pm. Locally-originating LPTV stations must broadcast these announcements as close to the above schedule as their operating schedule permits. Noncommercial stations must air the announcements at the same times as commercial stations; however, noncommercial stations need not air any announcements in a month in which the station does not operate. A noncommercial station that will not air some announcements because it is off the air must air the remaining announcements in the order listed above, i.e. the first two must air between 6:00 pm and 11:00 pm.

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March 2012

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

Noncommercial radio stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, and television stations licensed to communities in Texas must electronically file their Biennial Ownership Reports by April 2, 2012, as the filing deadline of April 1 falls on a Sunday. Licensees must file using FCC Form 323-E, and must place the form as filed in their stations’ public inspection files.

In 2009, the FCC issued a Further Notice of Proposed Rulemaking seeking comments on whether the Commission should adopt a single national filing deadline for all noncommercial radio and television broadcast stations like the one that the FCC has established for all commercial radio and television stations. That proceeding remains pending without decision. As a result, noncommercial radio and television stations continue to be required to file their biennial ownership reports every two years by the anniversary date of the station’s license renewal application filing.

A PDF version of this article can be found at Biennial Ownership Reports are due by April 2, 2012 for Noncommercial Radio Stations in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, and for Noncommercial Television Stations in Texas

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March 2012

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Michigan and Ohio must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations, and for in-state FM translator stations, are due by June 1, 2012.

Pre-Filing License Renewal Announcements

Full power commercial and noncommercial radio, LPFM, and FM Translator stations whose communities of license are located in Michigan and Ohio must file their license renewal applications with the FCC by June 1, 2012.

Beginning two months prior to that filing, however, full power commercial and noncommercial radio and LPFM stations must air four pre-filing announcements alerting the public to the upcoming renewal application filing. As a result, these radio stations must air the first pre-filing renewal announcement on April 1. The remaining pre-filing announcements must air once a day on April 16, May 1, and May 16, for a total of four announcements. At least two of these four announcements must air between 7:00 am and 9:00 am and/or 4:00 pm and 6:00 pm.

The text of the pre-filing announcement is as follows:

On [date of last renewal grant], [call letters] was granted a license by the Federal Communications Commission to serve the public interest as a public trustee until October 1, 2012. [Stations that have not received a renewal grant since the filing of their previous renewal application should modify the foregoing to read: “(Call letters) is licensed by the Federal Communications Commission to serve the public interest as a public trustee.”]
Our license will expire on October 1, 2012. We must file an application for renewal with the FCC by June 1, 2012. When filed, a copy of this application will be available for public inspection during our regular business hours. It contains information concerning this station’s performance during the last eight years [or other period of time covered by the application, if the station’s license term was not a standard eight-year license term].

Individuals who wish to advise the FCC of facts relating to our renewal application and to whether this station has operated in the public interest should file comments and petitions with the Commission by September 1, 2012.

Further information concerning the FCC’s broadcast license renewal process is available at [address of location of station’s public inspection file] or may be obtained from the FCC, Washington, DC 20554.

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March 2012

This Broadcast Station EEO Advisory is directed to radio and television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee and Texas, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Introduction

April 1, 2012 is the deadline for broadcast stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas to place their Annual EEO Public File Report in their public inspection files and post the report on stations’ websites.

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment.

In addition, those SEUs with five or more full-time employees (“Nonexempt SEUs”) must also comply with the FCC’s three-prong outreach requirements. Specifically, all Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening except in exigent circumstances, (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits, based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term. These Menu Option initiatives include, for example, sponsoring job fairs, attending job fairs, and having an internship program.

Nonexempt SEUs must prepare and place their Annual EEO Public File Report in the public inspection files and on the websites of all stations comprising the SEU (if they have a website) by the anniversary date of the filing deadline for that station’s FCC license renewal application. The Annual EEO Public File Report summarizes the SEU’s EEO activities during the previous 12 months, and the licensee must maintain adequate records to document those activities. Stations must also submit the two most recent Annual EEO Public File Reports at the midpoint of their license terms and with their license renewal applications.

Exempt SEUs – those with fewer than 5 full time employees – do not have to prepare or file Annual or Mid-Term EEO Reports.

For a detailed description of the EEO rule and practical assistance in preparing a compliance plan, broadcasters should consult “Making It Work: A Broadcaster’s Guide to the FCC’s Equal Employment Opportunity Rules and Policies” published by the Communications Practice Group. This publication is available at: https://www.pillsburylaw.com/siteFiles/Publications/CommunicationsAdvisoryMay2011.pdf.

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March 2012

The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ local public inspection files by April 10, 2012, reflecting programming aired during the months of January, February, and March 2012.

On Statutory and Regulatory Requirements

As a result of the Children’s Television Act of 1990 and the FCC Rules adopted under the Act, full power and Class A television stations are required, among other things, to: (1) limit the amount of commercial matter aired during programs originally produced and broadcast for an audience of children 12 years of age and younger, and (2) air programming responsive to the educational and informational needs of children 16 years of age and younger.

These two obligations, in turn, require broadcasters to comply with two paperwork requirements Specifically, stations must: (1) place in their public inspection file one of four prescribed types of documentation demonstrating compliance with the commercial limits in children’s television, and (2) complete FCC Form 398, which requests information regarding the educational and informational programming the station has aired for children 16 years of age and under. Form 398 must be filed electronically with the FCC and placed in the public inspection file. The base forfeiture for noncompliance with the requirements of the FCC’s Children’s Television Programming Rule is $10,000.

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The Comment and Reply Comment dates have been set for the FCC’s Notice of Proposed Rulemaking in the Congressionally-mandated Quadrennial Regulatory Review of the FCC’s broadcast ownership rules. Comments are due on March 5, 2012 and Reply Comments are due on April 3, 2012.

As discussed in more detail in our Advisory, the NPRM can fairly be described as the regulatory equivalent of moonwalking–appearing to go forward with deregulation while actually going backward–and it is important for broadcasters to step up and get involved.

While the FCC tentatively has concluded that, other than minor tweaks that may not be so minor, it will make almost no changes to any of its broadcast ownership rules, the NPRM asks many questions about the future of the media marketplace. In particular, the NPRM seeks to scrutinize many contractual relationships among broadcasters, such as Local News Services (“LNS”) agreements and Shared Services (“SSA”) agreements, that currently fall outside of the FCC’s ownership rules, and asks whether those rules should be modified to make such agreements attributable ownership interests.

The commissioners’ separate statements regarding the NPRM make clear that the lack of definitive forward movement is the result of significant differences among the commissioners along the traditional regulatory/deregulatory fault line. This fault line is particularly apparent with regard to the suggestion that the ownership rules be expanded to encompass a wide array of contractual and operational practices in the industry.

When the FCC released the Notice of Inquiry in 2010 that commenced this proceeding, it did not ask for comment regarding whether any contractual arrangements should be deemed attributable under the FCC’s ownership rules. The FCC’s sudden interest now is therefore the result of comments filed by public advocacy groups in response to the Notice of Inquiry. These comments follow on the heels of calls for disclosure of such agreements in other proceedings, such as the proceedings concerning online public inspection files and quarterly public interest programming report requirements for television broadcasters, and the FCC’s report on the Information Needs of Communities. These advocacy groups assert that inter-broadcaster agreements result in layoffs, lower the quality of news programming, reduce the number of diverse voices in a market, and allow a station to have as much control over another station’s programming and operations as a Local Marketing Agreement (“LMA”), which the FCC already regulates under its ownership rules.

The FCC notes in the NPRM that its attribution rules are intended to restrict any arrangement which confers such influence or control over a station that it has the potential to impact programming or other “core” functions of that station. The FCC asks whether LNS and SSA arrangements confer a level of influence similar to an LMA, and if so, whether they should therefore be regulated like LMAs. Related to this question, the FCC asks whether the amount of local news programming available in a market would be reduced if LNS and SSA agreements are restricted in the same manner as LMAs.

While the FCC’s future treatment of such agreements is only one of many consequential matters presented by the NPRM, it is one that will have a significant impact on how broadcasters operate in the future. Although the FCC’s NPRM may itself be an exercise in regulatory moonwalking, broadcasters now need to put their best foot forward, or face the prospect of more regulation from this “deregulatory” proceeding.