CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

Last week we provided a reminder that Form 317 (for reporting broadcast DTV stations’ revenues from ancillary/supplementary services) is due by December 1. We also emphasized that this is the first year that LPTV/TV Translator/Class A TV operators will be required to file that report (and pony up the five percent fee, if applicable). In providing that last factoid, we failed to point out that the rule change expanding the reporting requirement to the lo-po universe had not technically become effective. As we reported back in July, since that requirement is technically a new “information collection” (at least as far as LPTV/TV Translator/Class A operators are concerned), it couldn’t be implemented until all the Paperwork Reduction Act hoops had been jumped through.

No problem, though. In a notice published in the Federal Register on November 28 – a comfortable three days before the December 1 filing deadline – the FCC has announced that OMB signed off on the revised language of Section 73.624(g) on November 17. And with the November 28 Register notice, the rule has become effective as of November 28, 2011.

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And this year we DO mean ALL DTV broadcasters 

Hey, all you DTV broadcasters! Before you start to carve the turkey and settle in for a long Thanksgiving weekend of football later this week, don’t forget to make a note in your calendar that Form 317 is due at the FCC by December 1. Form 317 is the “Digital Ancillary/Supplementary Services” Report on which you have to report whether, between October 1, 2101 – September 30, 2011, your DTV station provided any ancillary or supplementary services for a fee and, if so, how much revenue the station received. If you did provide any such services, then you’ve got to fork over five percent of the gross revenues you got from them (the payment to be accompanied by a completed Form 159, thank you very much.)

“Ancillary or supplementary services” include any services that are provided using the portion of a facility’s spectrum that is not needed for its required one free broadcast signal.  Multiple video streams that are received free by the public are not considered to be ancillary or supplementary services.

This year, we truly mean all digital broadcasters of television programming, including TV translators, LPTV and Class A television stations, whether operating pursuant to a license, program test authority, or Special Temporary Authority.

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Commissioners cheer new policy, but is it really what they had in mind?

In late October, amid much congratulatory buzz, the American Association of Advertising Agencies (which sometimes refers to itself as the 4A’s) adopted a new “best practices” policy recommending that ad agencies adopt “non-discrimination vendor policies and procedures”. In the eyes of some – Commissioners Copps and McDowell, for two prominent examples – this move was just what the Commission had in mind back in 2007-2008, when it first announced that broadcasters would have to certify (in their renewal applications) that they (that would be the broadcasters) don’t discriminate on the basis of race or ethnicity in their advertising contracts.  The Commission’s action was designed to put a stop to, or at least curb, so-called “No Urban/No Spanish” dictates in ad time buys.

The Commission’s policy is not without its conceptual shortcomings. Not the least of those shortcomings is the fact that, since it’s applicable only to broadcasters, the FCC’s policy leaves a gaping hole in protection against the supposed discriminatory practices to which it is directed. After all, broadcasters are in the business of selling time for others’ commercial messages; broadcasters are thus generally not the ones making the decisions as to which station’s time will be purchased. Moreover, stations are often at least one step removed from those decisions, since advertisers frequently rely on ad agencies in crafting their campaigns, including the stations on which the ads are to be placed.

The new 4A’s best practices statement would seem at first blush largely to fill that hole. As noted above, the announcement was met with laudatory statements from two Commissioners. Commissioner Copps effused that “[t]hese best practices from the advertising agencies will pave the way for more equal treatment,” and that they will have “a positive impact in communities across the country.” 

Hold on there. Let’s take a look at the actual language of the “Non-Discrimination Policy Related to Vendor Selection”.

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Media Bureau staff continues to check station websites for compliance

A couple-three years ago, we warned readers that the staff of the FCC’s Media Bureau appeared to be browsing the websites of broadcast stations, checking for compliance with the EEO rules. Actually the FCC staffers were then apparently checking for compliance with an imaginary EEO requirement that didn’t – and still doesn’t – exist, but the important take-home message was the same regardless: FCC staffers were inspecting broadcasters’ websites.

It appears that that practice continues.

Recently, an FCC staff member emailed us, questioning whether one of our clients had posted its annual EEO report on its website. (As noted below, the rules do require such posting.) The staffer reported that she had been unable to find the report on the site. Happily, we were able to confirm (and demonstrate) that the report had in fact been posted – albeit not necessarily in the most obvious place on the station’s site – and the staffer apparently went away satisfied.

But that encounter prompts us to remind broadcasters that their websites are wide-open for inspection by anybody, including FCC staffers.  And nowadays those staffers are apparently motivated to engage in such inspection in connection with the license renewal process, which is swinging into high gear. (Two batches of renewals have been filed already, with more to come at two-month intervals for the next few years.)

The Commission’s rules currently specify only one type of “public file” document that must be included on a station’s website (assuming, of course, that the station has elected to have a website): the licensee’s most recent annual EEO report, the specs for which may be found in Section 73.2080(c)(6) of the rules. (Obscure regulatory factoid: The public file rule technically still requires that DTV transition education reports – Form 388 – be posted on websites. However, since the retention period for those reports is only one year, and since all but a dozen or so TV stations completed their move to digital more than a year ago and thus no longer have to file Form 388, the continuing impact of that particular requirement is minimal at this point.)

Of course, stations with fewer than five full-time employees are exempt from the annual EEO report requirement. But if you are not exempt, and if you do have a website, it would be a good idea to be sure that your most recent EEO report is posted there. While the rule does not specify how prominently the report is to be posted, it would probably be a good idea to make it pretty darned easy to get to the report from the station’s home page. That should assist FCC staffers in locating the report at your site – thus enabling them to move on to somebody else’s site that much quicker.

Our recent interaction with the staff did not indicate that the FCC is looking to dole out fines to stations that don’t happen to have posted their reports as required. But you never know.

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“Eligible entity” policies suspended in light of Third Circuit decision

From our Unintended Consequences File:  The recent Third Circuit decision on multiple ownership rules – which took the Commission to task for failing to do more to promote minority and female broadcast ownership – has led to the abrupt termination of a Commission policy intended to (wait for it) promote minority and female broadcast ownership. While there remains at least a chance that that termination may be forestalled, a recent public notice from the Commission has set the termination process in motion. 

Under the policy at issue, the Commission extended unbuilt broadcast construction permits by 18 months when they were assigned to “eligible entities”. An “eligible entity” was generally defined as an entity that qualified as a small business under the standards of the Small Business Administration for industry groupings based on revenue. The policy was first announced in the Commission’s Diversity Order released in 2008, as part of a wide-ranging agency effort to promote “diversity”.

As we reported earlier this month, the Third Circuit found that the FCC had not shown how its revenue-based definition of eligible entity would advance its goal of promoting minority and female ownership of broadcast stations. Accordingly, the Court tossed the policy, preventing the Commission from continuing to utilize it at all.

In response, the Commission has issued a public notice alerting potentially affected permit holders and prospective permit assignees of the effect of the Court’s decision.

To understand the way the shut-down will work, you have to understand the concepts of (a) “finality” of FCC actions and (b) issuance of the “mandate” relative to the court’s action.

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Initial deadline: April 5, 2011

If you’re a TV licensee providing over-the-air feeds to one or more distant translator/LPTV/Class A stations, cable head-ends or satellite local receive sites, heads up. You need to act soon if you want reception of your signal at those sites to be protected from unlicensed devices operating in the TV band. April 5, 2011 is the deadline for TV stations with receive sites more than 80 kilometers beyond their protected contour to seek a waiver of the Commission’s geographic limitation to be able to register such receive locations. Note: this is a one-time-only opportunity.

Back in 2008, when the Commission adopted rules to govern the operation of unlicensed devices in the so-called “TV white spaces”, it sought to protect existing TV operations by establishing a database in which certain locations requiring protection could be registered. While receive locations that happen to be within a TV station’s protected service area were already routinely protected, that wasn’t the case for receive sites serving distant TV translator/LPTV/Class A TV stations, satellite or cable (MVPD) services, all of which deliver the signal to viewers outside the originating station’s protected contour. The Commission decided to protect, within reasonable bounds, the ability of such stations and services to receive programming over-the-air for retransmission.  “Within reasonable bounds” in this context meant within 80 kilometers of the originating TV station’s protected contour. Translator/LPTV/Class A stations and MVPD services with receive sites so located were thus allowed to register their sites in the TV bands device database.

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Answer: Apparently not, but enjoy it while it lasts, because next year will likely be a different story.

As all full-power DTV licensees and permittees presumably know, the FCC requires that they file a “Digital Ancillary/Supplementary Services” report on Form 317 on or before December 1, a deadline which is fast approaching. But does that requirement apply as well to digital Class A television, LPTV, and TV translator licensees? 

The short answer is apparently not, thanks (it seems) to our old friend, the Paperwork Reduction Act (PRA).

Form 317 is used to report whether, during the 12-month period ending the preceding September 30,  a DTV station has provided any ancillary or supplementary services for a fee and, if so, how much revenue the station received. If there were any such services, the licensee/permittee must fork over five percent of the gross revenues it received. (Ancillary or supplementary services are defined to include any services that are provided using the portion of a facility’s spectrum that is not needed for its required one free broadcast signal. Multiple video streams that are received free by the public are not considered to be ancillary or supplementary services.) Originally the requirement applied only to full-power stations.

So far, so good.

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FCC finally sets eligibility guidelines for set-aside Sirius/XM channels

Look for diversity to start raining down from the skies. The FCC has finally filled in the details for implementation of the Sirius/XM set-asides which were initially approved, in non-detailed terms, more than two years ago. Those new rules are set to be implemented by April 17, 2011.

But the diversity we’ll be seeing may be different from the diversity that some folks might have expected.

Back in 2008, the FCC decided to let XM and Sirius merge. In response to objections that maybe, just maybe, reducing the number of satellite radio services from two to one might reduce competition and diversity, XM and Sirius took a bold step: they made a number of “voluntary” commitments aimed at defusing those objections. (We put “voluntary” in quotes here because the Commission’s 2008 order granting the merger made clear that, without those commitments, the merger would not have been approved.) One of those commitments involved setting aside 4% of the capacity on each of the Sirius and XM platforms for long-term leases for noncommercial educational (NCE) programming and programming by one or more “Qualified Entities”.

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Which TV licensees have to file?

Recently, the Minority Media & Telecom Council asked the FCC to suspend enforcement of the EEO rules for three months. (You can read MMTC’s request here; alternatively, you can read our monthly Memo to Clients summary of the request here.) At this point, it’s anybody’s guess as to whether the FCC will grant MMTC’s request – although, frankly, if even MMTC is asking that EEO enforcement be suspended, the Commission really should be wondering what’s wrong with this picture.

But regardless of what the Commission eventually does, it might want to take this opportunity to clean up at least one aspect of its EEO “Broadcast Mid-Term Report” (FCC Form 397) that seems oddly and unnecessarily confusing, if not flat-out inconsistent.

Form 397 is a cute little three-page form. The first page calls on the reporting licensee to provide its name and contact information and identify the stations covered by the report. No real surprises there.

But on page two, Section I consists of the following single yes/no question:

Does your station employment unit employ fewer than five full-time employees, if television, or fewer than eleven full-time employees, if radio?

Not an overly complicated question. Then the form reads:

If yes, you do not have to file this form with the FCC. However, you have the option to complete the certification below, return the form to the FCC, and place a copy in your station(s) public file.

This last instruction raises an obvious question – i.e., who in his right mind would “opt” to file a form that the FCC specifically says does not have to be filed? – but that’s not the problem. Rather, the problem arises from the fact that the “filing instructions” located immediately above Section I include the following:

If a television station employment unit employs fewer than five full-time employees, only the first two pages of this report need be filed.

So does that mean that TV stations with fewer than five have to file a report (even if the report is limited to only two pages), or does it not have to file anything at all (unless, of course, it opts to)?

Oh, and did we mention that the underlying rule (47 C.F.R. §73.2080(f)(2)) provides that

The Commission will conduct a mid-term review of the employment practices of each broadcast television station and each radio station that is part of an employment unit of more than ten full-time employees four years following the station's most recent license expiration date as specified in §73.1020.

Let’s get this straight. If you’re a TV licensee with fewer than five full-timers, according to Form 397 either “you do not have to file this form” or “only the first two pages of this report need be filed”. Huh? And Section 73.2080(f)(2) isn’t much help in sorting this out, since that section could be read to say that mid-term reports are expected from TV stations with more than ten FT employees – even though the 2002 Report and Order adopting the rules makes reasonably clear (check out Paragraph 153) that the Commission intended to limit mid-term EEO reviews to TV stations with five or more FT employees.

There is at least one possible way (see “Suggested Solution”, below) to twist this regulatory Rubik’s cube to make all the seemingly incongruous parts look consistent, but really, would it be that hard for the FCC to take the time to articulate its requirements clearly and consistently in the first place? Sure, we know that the number of TV stations with fewer than five full-time employees may be limited, but is that any excuse for at-best-ambiguous-at-worst-hopelessly-inconsistent forms?

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OCAS system could reduce collisions, power costs, and avian mortality – what’s not to like?

What would you think about a tower safety device that reduces the number of aircraft collisions with towers, is environmentally friendly, and eliminates the need for towers to be continually lit? Too good to be true? Perhaps, but OCAS, Inc. (a company founded by two former military pilots) has petitioned the FCC for approval of just such a system.

Specifically, OCAS has asked the Commission to add a new Subpart T to Part 87 of its rules in order to allow its Obstacle Collision Avoidance System (OCAS ® – hence the company’s acronymic name) to be widely deployed. The technology at work here is similar to air-to-air collision avoidance systems in use for some time now. In fact, the OCAS system itself has been used in a number of locations worldwide, including at some U.S. government (shh!) installations. In light of its successful operations over a period of time – not to mention marketplace demand for an improved obstacle warning system – OCAS is asking the Commission to make the rule changes necessary for the system to be much more widely-used.

The OCAS system consists of three basic components: a low-powered continuous wave radar; an energy supply source to turn on and control the lighting on the structure; and a VHF radio which can transmit simultaneously on virtually all aviation-band frequencies.

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