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

[Blogmeister Note: The following piece, in a more compact form, appeared in Radio Ink magazine. We thank our friends at Radio Ink for allowing us to post this here as well.]

As we enter the political season, radio stations are being bombarded with reminders about the FCC’s political broadcasting rules – including, of course,  the lowest unit rate (“LUR”) requirement for many, but not necessarily all, political spots. 

LUR, of course, means that stations must provide all political candidates (federal, state and local) with the LUR for advertising bought during a statutorily-specified pre-election windows.  Those windows include the periods: (a) 45 days before a primary election, and (b) 60 days before a general election. 

In general terms, the LUR is the lowest rate of the station for a particular class and amount of time during a particular period.  “Lowest” means lowest.  Thus, candidates must get the benefit of all discounts, including those offered to the station’s most favored commercial advertisers for the same class and amount of time for the same period as that purchased by the candidate.  Note that only ads bought by candidates are entitled to receive LUR. Also, federal candidates must provide the “stand by your ad” certification in order to be entitled to receive the LUR. 

A spot “class” is one that has particular rights and characteristics, such as morning drive,  afternoon drive, fixed position, ROS, etc.  In many instances calculating the LUR for different classes of time can be relatively simple. But in other instances – particularly when different classes are bundled into packages for non-political advertisers, the calculation can get tricky fast.  Unlike state and local candidates, federal candidates cannot be denied “reasonable access” to a station, which means that they are effectively entitled to any and all commercial opportunities as a standard advertiser. (State and local candidates can be limited to certain classes.) So for federal candidates, stations must determine the per-class LUR for each component of the package and make that rate available to the political advertiser, whether or not he/she buys the whole package

That process is already confusing enough – and it has gotten increasingly so as stations have expanded their streamed content on the Internet. How does Internet streaming of content – including political spots – affect LUR calculations?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Goal: Help prepare EAS participants for upcoming nationwide EAS test

As we all know, the first NATIONWIDE test of the Emergency Alert System is scheduled for November 9. Lisa Fowlkes, Deputy Chief of the FCC’s Public Safety and Homeland Security Bureau, has passed along the following message about a “virtual roundtable” being conducted next week (August 15, to be precise – see details below) featuring FCC, FEMA, NOAA and other experts. The exercise is intended to help one and all prepare for the nationwide test. Among other topics will be a “best practices guide” which is being developed to guide participants through the entire EAS alert process. 

Additionally, an EAS website has been set up to provide a forum for suggestions and discussion about a variety of EAS-related matters.  Ideas from that website will be among the topics on the agenda at the August 15 roundtable.

Here’s Lisa’s message:

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Además el cambio ca, además de que es lo mismo.

Five years ago I was quoted in an article in Billboard about whether Spanish-language broadcasters get a pass when it comes to enforcement of the FCC’s indecency rules. Several English-language broadcasters – including Howard Stern (who quoted me on the air) – have frequently complained that the FCC does not enforce the rules equally.  Suspected reasons for the disparity: fewer complaints get filed against Spanish language programs, and the Spanish-speaking staff at the FCC has traditionally been undermanned. 

Now a couple of groups are looking to change the first of those possible reasons.

The National Hispanic Media Coalition (NHMC) and the Gay & Lesbian Alliance Against Defamation (GLAAD) have filed a complaint (173 pages in all, including extensive attachments) with the FCC against a TV station in the Los Angeles area. The focus of their complaint: the Spanish-language television talk show “José Luis Sin Censura” (translation: “José Luis Uncensored”).

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

 Not quite two years ago, we called our readers’ attention to developments on the sponsorship ID front, Spanish-style. What got our attention back then was the fact that the Enforcement Bureau had sent out a number of Letters of Inquiry (LOIs) to a number of Spanish language stations which allegedly had dealings with Univision Music Group (UMG), an entity controlled by Univision Communications, Inc. (UCI). The back-story: a former UMG executive had spread a boatload of specific factual allegations about specific payola-like conduct in a lawsuit filed out in California. Word of those allegations – along with a list of stations allegedly involved in payola-like conduct – had reached the FCC, and the Commission was interested in checking things out for itself.

We concluded that report by pointing out that we didn’t know how long this regulatory telenovela would take to play out, or what the final upshot would be.

We now know.

Univision Radio, Inc. has entered into a Consent Decree with the Enforcement Bureau. No admissions of wrong-doing, mind you, but Univision Radio does agree to make a “voluntary” contribution to the Feds to the tune of $1,000,000. Plus, it agrees to an extensive set of “Compliance Plans” and “Business Reforms” designed to discourage sponsorship ID violations.

URI gets something in return.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

An FCC reminder about important emergency contact information

With the Fourth of July fading into the past and Labor Day looming ominously just beyond the horizon, hurricane season is upon us. Lisa Fowlkes, Deputy Chief of the Commission’s Public Safety & Homeland Security Bureau, has asked us to pass along to our clients and readers some important FCC contact information in case Mother Nature turns nasty in the coming weeks and months.

The link to the FCC's emergency contacts page, including its 24/7 Operations Center, is http://www.fcc.gov/pshs/about-us/contacts.html.

Also, the Bureau continues to encourage communications service providers – particularly broadcasters – to register with the Commission’s Disaster Information Reporting System (DIRS) and to participate in DIRS if the system is activated.  The link to the DIRS login page is https://www.fcc.gov/nors/disaster/Login.cfm.  FEMA and FCC emergency response personnel (ESF-2) use DIRS reports to coordinate needed assistance (e.g., fuel, generators, etc) in the aftermath of natural disasters. (“ESF-2” is FEMA-speak for “Emergency Support Function #2” – the governmental system that, among other chores, supports the restoration of the communications infrastructure and coordinates Federal communications support to response efforts during incidents requiring a coordinated Federal response.)

Thanks for the reminder, Lisa. We all hope that none of us will need to call on the guv’mint to “restore communications infrastructure”, a notion which conjures up images of worst case scenarios.   But the unfortunate truth of the matter is that Big Storms are beyond our control. This is one of those cases where a timely ounce of prevention is clearly worth a pound of cure.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, I delivered to House Speaker Nancy Pelosi a letter urging her to look into the impact on minority broadcasters of the Performance Rights Act (PRA) pending before Congress. I signed the letter as a Director of the Spanish Broadcasters Association and Washington counsel to the Puerto Rico Broadcasters Association. Co-signers included David Honig, Executive Director of the Minority Media and Telecommunications Council, and Barbara Arnwine, Executive Director of the Lawyers' Committee for Civil Rights Under Law.  

Two weeks ago I moderated a panel of Spanish language radio broadcasters from across the country who gathered on Capitol Hill top brief Congressional staffers on the detrimental effects of such legislation.  If passed into law, the PRA would impose hundreds of millions of new fees on local radio stations for music aired free to listeners. Fifty percent of the new fee would go directly to the record label companies, three out of four of which reside outside the United States.

The bill was approved by the House Judiciary Committee last week, over the objections of various minority groups that wanted a hearing on the potential effects of the bill.  As we said in our letter to Speaker Pelosi, the PRA "would disproportionately harm present and future minority radio broadcasters and their listening communities" and could bankrupt as many as one-third of all minority-owned radio stations.  Another point we make in the letter is that there has been no examination of whether radio should be compensated for the promotional value of their airplay; as a result, the PRA “is not ripe for floor consideration”.  

While the bill is not, by any means, a uniquely minority-focused issue, it is clear that many minority owned stations, which frequently struggle in a healthy economy, and are barely surviving in the economic downturn. They could be snuffed out entirely by the imposition of an additional performance fee. As Amador Bustos of Bustos Media noted during the Capitol Hill briefing I moderated, "The performance tax would be the added and final nail in the coffin for these small broadcasters like ours, and I think that it is just absolutely ludicrous that the record companies are trying to sort of bite the hand that feeds them." The encouraging news is that while our letter was making its way to the Speaker’s desk, additional lawmakers threw their support behind a bipartisan resolution opposing "any new performance fee, tax, royalty, or other charge" on local radio stations.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Spanish-language broadcasters bring the fight to Capitol Hill.

“It’s like throwing a surprise party for a friend, and at the end of the night your friend charges you for an appearance fee.”

That's how Spanish Broadcasting System VP/GM Frank Flores described the push by record labels to impose a performance fee on radio stations. Flores’s comparison, which was a reference to the roughly $2 billion in music sales that the Free Radio Alliance claims is earned by the record industry as a result of the free airplay of their songs on commercial radio, was made during a May 5 panel discussion by leading Spanish-language radio broadcasters, which I moderated. The broadcasters gathered on Capitol Hill to brief Congressional staffers on the potential impact of a performance royalty on their stations. Flores went on to say that "we have worked real hard with the record labels and the artists.  And to be honest with you, a lot of these artists wouldn't be where they are if it wasn't for these radio stations."

Univision Radio's top morning show host, Eddie "Piolín" Sotelo, and ten other Spanish-language radio broadcasters told a room of Congressional staffers that a new performance tax on local radio stations could mean bankruptcy and more job losses for many Hispanic stations. “The performance tax would be the added and final nail in the coffin for these small broadcasters like ours, and I think that it is just absolutely ludicrous that the record companies are trying to sort of bite the hand that feeds them," Amador Bustos of Bustos Media told the audience.

Border Media's Miguel Villarreal noted the potential for more layoffs in the radio business. After the panel discussion, the broadcasters walked the halls of Congress through the afternoon, meeting with members of the Congressional Hispanic Caucus. 

The event was organized by the Free Radio Alliance, which opposes passage of HR 848, the bill which would impose a performance fee on radio stations that air recorded music. Under the terms of the bill, 50% of the royalties would go directly to the recording labels. After the panel discussion, the broadcasters met with members of the Congressional Hispanic Caucus throughout the afternoon. According to one broadcaster, the broadcasters were able to obtain additional support in opposition to the bill and in favor of the Local Radio Freedom Act, a non-binding resolution opposing the performance fee.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

(The following is an extended essay originally published in Radio World – The Newspaper for Radio Managers and Engineers. Check it out at http://www.rwonline.com/.)

For decades the Federal Communications Commission has refused, as a matter of policy, to allow lenders and equity investors to take security interests in the FCC licenses that permit spectrum users — broadcasters, wireless operators and all the rest — to use the spectrum.

While this may not seem like a big deal to some, many lenders disagree: They claim that the FCC's policy significantly impedes the flow of communications-related investment funding.

While debates over the wisdom of the FCC's policy have flared up periodically over the years, the FCC has not budged and its policy has remained unchanged.

But the current credit crunch has brought this issue into focus for renewed reevaluation. With the availability of capital drying up for small- and medium-size broadcasters and telecommunications companies, it is important to examine any kinks in the financial pipeline that might unnecessarily slow, or block, the flow of capital.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If you thought that the departure of Elliott Spitzer from the public scene might have put out the FCC’s fire for enforcement of the payola rules, think again. That fire is still blazing. In recent days the Enforcement Bureau has sent out letters of inquiry to a number of Spanish-language radio stations demanding responses concerning allegations of payola.

The claims arise from a lawsuit filed in Los Angeles two years ago. The plaintiff there, one Daniel Mireles, claims that he was wrongfully discharged from his position as Vice President of Promotions at Univision Music. (As always, the pivotal role of the “disgruntled former employee” should never be underestimated.) According to his complaint, Mireles was instructed by management-level executives of Univision and Fonovisa (a record label owned by Univision) to make “cash payments to the program directors and others at radio stations in order to increase the airplay of Fonovisa’s records”. While Mireles alleges that he resisted those instructions initially (apparently he had been involved in a payola investigation in the 1990s and was understandably gun-shy about going through the meat grinder again), he acknowledges that, between February-June, 2006, he was given some $720,000 to pay to “individuals at radio stations”. The goal was apparently to “get Fonovisa’s records played more frequently on the radio”.

Mireles claims that, in drawing up his list of “individuals at radio stations”, he spoke with people at “approximately fifty or more” stations. He allegedly made deals to make payments ranging from $3,000-$10,000 per month.

• Email This
• Print
• Comments
• Trackbacks
• Share Link