At its July 2019 Open Meeting this week, the FCC voted to make several changes to its Children’s Television Programming rules. It released its final Order adopting the changes this afternoon. Although characterized by Commissioner O’Rielly as “modest” changes, the revised rules are likely to alter television broadcasters’ compliance efforts in several significant respects, including the time at which the programming is aired, the type of programming that qualifies as educational, and how a broadcaster demonstrates compliance with the revised rules.
Last April, the broadcast industry was abuzz with the need to register previously unlicensed earth stations in order to reduce the chance of future displacement. In April 2018, the deadline for submitting the registrations was announced, and after two extensions, all fixed-satellite service (FSS) earth stations in use prior to April 19, 2018 that operated in the 3.7 to 4.2 GHz band were to be registered with the FCC by October 31, 2018.
Embedded in the Music Modernization Act signed into law in 2018 was a provision that extended most federal copyright protections to pre-1972 sound recordings. Prior to the enactment of the MMA, sound recordings made prior to February 15, 1972, may have been protected under state law, but federal copyright law protections did not apply.
At its February 14th meeting, the FCC gave a rather significant Valentine’s Day gift to broadcasters, eliminating the requirement that larger radio and television stations submit the EEO Mid-Term Report (FCC Form 397) at the midpoint of their license terms. While the FCC will continue to conduct EEO mid-term reviews, it determined that filing the EEO Mid-Term Report was no longer necessary, as most of the information required for an EEO mid-term review is already available in a broadcaster’s Online Public Inspection File.
Specifically, the EEO Mid-Term Report required broadcasters to provide three pieces of information: (i) the number of full-time employees; (ii) the point of contact for the station(s) that is responsible for compliance with the EEO rules; and (iii) the two most recent Annual EEO Public File reports. In eliminating the obligation to file the EEO Mid-Term Report, the FCC reasoned that the point of contact information and the Annual EEO Public File reports are already kept in a broadcaster’s Online Public Inspection File. As such, the additional requirement of filing an EEO Mid-Term Report with the FCC was unnecessary.
To gather the third piece of information requested in the EEO Mid-Term Report—the current number of full-time employees—the FCC will require that radio station employment groups indicate when uploading their Annual EEO Public File Reports whether or not they have 11 or more full-time employees (the number which triggers the need for an EEO mid-term review in radio). Because TV licensees are subjected to EEO mid-term reviews when the station employment group only has five or more full time employees—the same number that triggers the requirement to file Annual EEO Public File Reports—the FCC deemed such a requirement for TV licensees unnecessary (i.e., if a TV station is filing Annual EEO Public File Reports, the FCC already knows the station employment group is large enough to qualify for an EEO mid-term review).
The change in rules will be effective on May 1, 2019. The FCC noted that television stations in Delaware and Pennsylvania will therefore still be required to file their EEO Mid-Term Reports on April 1, 2019.
Originally intended as an “innovation band” for the testing of new wireless broadband services, the Citizen Broadband Radio Service (CBRS) was created in 2015 to permit commercial and federal spectrum users to operate in the same spectrum band. By utilizing smaller geographic areas for licenses, and short-term authorizations lacking an expectation of renewal, the CBRS was seen as a test bed for a variety of different wireless broadband services, including those of rural wireless broadband service providers.
To that end, the FCC created two new classes of licenses, Priority Access Licenses (PALs) and General Authorized Access Licenses (GAAs). GAAs are permitted to operate anywhere within the CBRS band, so long as incumbent licensees and PALs are protected. PALs are required to protect the incumbent licensees, and will receive protection from GAAs. A key component of the CBRS licensing scheme is the implementation of a central database, the Spectrum Access System (SAS) (had enough acronyms yet?), maintained by third parties who will coordinate among licensees to prevent interference.
At its October meeting, the FCC revised its rules for the service with the stated goal of further encouraging the rapid development of 5G technologies. The revised rules were adopted in response to petitions filed by CTIA and T-Mobile in 2017 which proposed several changes to the original 2015 rules. The FCC sought comment on those proposals, which suggested several changes to the Priority Access Licenses, including adjusting the size of the geographic license, expanding the initial and renewal terms for licenses, and adopting performance standards. Although the FCC did not fully adopt the proposals, the revised rules make significant changes before the FCC has even issued the first CBRS authorization.
License Area: Under the 2015 rules, PALs were to be issued based on census tracts. The intent was to encourage local broadband development, especially in rural areas that may not receive service by nationwide carriers. By highlighting the difficulty of managing the licensing and build-out of service in 74,000 separate census tracts, CTIA, T-Mobile and several other parties argued that the FCC should expand the PAL geographic area to the more-manageable Partial Economic Areas. Ultimately, the FCC rejected that proposal, but instead expanded the PAL geographic area to county-based authorizations.
License Terms: In 2015, the FCC was concerned about the warehousing of spectrum, so it limited the license term of PALs in a particular geographic area to two sequential three-year periods, with no option for renewal. Several parties filed comments arguing that the three-year limit for licenses would serve as a roadblock to robust investment by wireless companies. The FCC has now agreed and extended the initial term to ten years. The FCC also modified its rules to permit licensees to renew their PAL authorizations.
Performance Standards: In light of its decision to extend the license term and permit renewals, the FCC imposed a “substantial service” performance standard for services operating in the CBRS band. For mobile and point-to-multipoint services, a licensee must demonstrate that it provides service to at least 50 percent of the licensed service area. For point-to-point service, a licensee must demonstrate that it provides at least four links in areas with a service population of 134,000 people or less, and at least one link per 33,500 people in service areas with a population greater than 134,000 people. This showing will be required when the licensee files its license renewal application.
Competitive Bidding: Finally, the FCC decided to grant PALs in accordance with its competitive bidding auction rules, permitting applicants to claim bidding credits as “small” or “very small business” entities, as a rural service provider, and/or if they propose to serve qualifying Tribal lands.
Support for the proposed rule changes was first signaled by then-Commissioner Pai and Commissioner O’Rielly in their concurring statements when the original rules were adopted in 2015. Because the FCC is still working on approval of the various SAS database proposals, and because there was a change in FCC leadership in January 2017, it was possible for the petitioning parties to seek revision of the 2015 rules before the FCC issued its first CBRS authorization. To date, the FCC has not issued authorizations for PALs or GAAs, but it is possible that new authorizations could be issued in 2019. Thus, while the rule changes will not impact any existing PAL or GAA licensees, these changes will have a significant impact on the operation of the CBRS band in the future.
In adopting a Notice of Proposed Rule Making late last week, the FCC took the first step in establishing ground rules for reimbursing Low Power Television, TV translator and FM radio stations affected by the TV spectrum repack. Most of the proposed rules track the statutory direction contained in the Reimbursement Expansion Act (REA) adopted in March, but a few potentially controversial proposals were included as well.
The REA limited reimbursement eligibility for LPTV, TV translators and FM radio stations to stations that were licensed and operating on April 13, 2017. In addition, LPTV stations must establish that they were broadcasting for nine of the twelve months prior to April 13, 2017, which was the date the Incentive Auction officially ended. The FCC is seeking comment on what evidence it should request from licensees to substantiate their eligibility, including potentially requiring licensees to provide program guides and/or power bills.
The FCC is also seeking comment on guidelines for reimbursing licensees, focusing on both the types of expenses that should be reimbursed, and the process for licensees seeking reimbursement. For example, the REA limited eligibility to those LPTV and TV translators that filed a Special Displacement application, so the FCC proposed to limit the reimbursable expenses to just those relating to the displacement of such stations.
While it is likely that no FM radio stations will be permanently displaced as a result of the Incentive Auction, the FCC developed a three-tier proposal to reimburse FM stations for expenses to operate auxiliary stations instead of temporarily ceasing operations while tower work is done. The FCC noted that its rules permit stations to either power down or temporarily discontinue operations for less than thirty days without seeking advance authority, so the FCC proposes to limit reimbursement for constructing new or upgraded FM auxiliary facilities to those stations that will be off-air for extended periods of times.
Under the proposal, FM radio stations off-air for more than 30 days would receive reimbursement for 100% of their expenses to construct or modify existing auxiliary facilities, but stations off-air between 11 and 30 days would receive reimbursement for only 75% of their expenses, and stations expected to be off-air for 1-10 days would receive reimbursement for only 50% of their expenses. To be eligible for reimbursement, FM auxiliary facilities will need to cover 80% of the existing station’s geographic or population coverage.
While the FCC obviously intends to borrow heavily from the existing reimbursement process used by Class A and full-power television stations, it is clear that there are unique circumstances surrounding the reimbursement of expenses for LPTV, TV Translator and FM radio stations that will require further examination. Moreover, Commissioner O’Rielly noted in his separate statement that the FCC has proposed to allocate reimbursement funds based on the length of time that FM radio stations will be off air, but urged parties to submit alternative proposals if the FCC’s assumption that “time equals money” is incorrect.
Comment deadlines have not yet been established, but comments on the FCC’s proposals will be due 30 days after the NPRM’s publication in the Federal Register, with reply comments due 30 days after that date.