Impaired Transparency?

Where’s the FCC’s copy of the MusicFIRST Request been hiding?

As we reported recently, the FCC has invited comment on the Request for Declaratory Ruling filed by the MusicFIRST Coalition. For the convenience of our readers, we provided a link to a copy of the Request. Good thing that we did. Apparently the FCC has been having quite a time trying to track down any copy in its files reflecting a “received” stamp from the Secretary’s office. 

As an apparent result, as of 5:00 p.m. today (August 12, 2009) no copy at all of the Request had been posted in Docket No. 09-143 on ECFS, even though the public notice inviting comments was supposedly released five days ago – so anybody who (a) might have wanted to read the Request between then and now and (b) hasn’t thought to look for it on CommLawBlog.com would have had a bear of a time finding it. 

We’ve heard from one source who suggested that it’s not clear that the Request ever made it to the Secretary’s office. To be sure, the copy of the Request that we have in hand (no thanks to the FCC) includes a certificate of service indicating that it was being filed at the appropriate FCC filing address – but ordinarily, when things are filed at that address, stamped copies are made and retained by the Commission for future reference. So if it did pass through the Secretary’s office, it’s unclear why it didn’t get stamped in . . . and if it did get stamped in, it’s unclear why it’s taking so long to get a stamped copy posted for public review.

We’ve also heard that the way the Request came by its official docket number was a bit, um, unorthodox, but what the heck – the FCC controls its docket number assignment processes, and as long as it can keep those numbers straight, it can assign them however it wants.

While documents can be misfiled or mislaid by even the best of us, the Commission’s delay in making a copy of the Request available for public review is troubling. In our experience the Secretary’s office is one of the tightest-run ships around, so it’s striking that they reportedly haven’t been able to come up with a stamped copy. Unfortunately, thanks to the delay, we’ve already burned through five of the 30 days provided for comments. Since the deadline for comments was thoughtfully set for the Tuesday after Labor Day weekend, every day counts here.  (Yes, we know that this doesn’t affect us, because we’ve already got our copy. But what about everybody else?)

Perhaps most distressing is the question of why there has been any problem here at all.  After all, the Commission issues public notices and opens up dockets all the time. Presumably it has a standard operating procedure to assure that everything is in order before a proceeding is initiated, a docket number assigned, public comments invited, etc. And (also presumably), if that SOP had been followed, somebody would have realized that the stamped copy of the Request – i.e., evidence that the Request had in fact been filed at all – had apparently gone missing. We like to think that the process would then have stopped until the supposedly errant copy had been wrangled back into the files.

So the fact that the public notice was hustled out as a “late release” (supposedly on Friday evening, but did anybody actually see it released before Monday morning?) is odd. After all, what’s the hurry here? Why was it so darned important to get the notice out the door on August 7 when August 10, 11, 12, etc., all would presumably have done just as well?

It is, of course, entirely possible that there are perfectly reasonable answers to these questions. But we’re having trouble coming up with any. The seemingly slapdash haste with which the invitation for comments was issued is particularly problematic in view of the fundamental questions of First Amendment protections and scope of FCC authority posed by the Request.

Unless and until the Commission provides some explanation for both (a) the delay in getting a copy (and particularly a stamped copy) of the Request posted for all to see and (b) the decision to release the public notice on a rush-rush basis late on a Friday with the stamped copy still AWOL, folks at the FCC should not be surprised if many of us take their paeans to “transparency” (like here, or here, or here) with more than a grain of salt.

Responding To A False Alarm?

FCC invites comments on alleged improprieties in Performance Rights Act debate

A new front has been opened in the on-going struggle over the Performance Rights Act (PRA). The new battleground is the FCC, which has invited comment on a “Request for Declaratory Ruling” filed by MusicFIRST Coalition back in June.

As we have previously reported (here and here, for example), the PRA would require radio stations to pay for the on-air performance of copyrighted sound recordings. That would be over and above the royalties broadcasters already pay to the composers of the underlying works (through ASCAP, BMI and SESAC). Historically, of course, radio has provided on-air exposure to recording artists for free, just as the artists have made their recordings available to broadcasters for free. That quid pro quo arrangement has served everybody – artists, broadcasters and the listening public – well for decades. The artists – well, at least some of the artists, and certainly the record companies for which they work – now want to change the deal.

Whether the proposed change makes much sense is a matter of considerable (to put it mildly) debate. (See our colleague Peter Tannenwald’s post here for an interesting take on the situation.) But thus far, the debate has been thrashed out in Congress, in connection with various bills which would either impose a new performance rights royalty obligation or not. (While no final votes have been taken, some observers – including our colleague Kevin Goldberg – have concluded that the PRA is doomed to failure in this Congress.)

Perhaps sensing a need to expand the battlefield, MusicFIRST – a “partnership of artists and organizations in the music community who support compensating performers for their work when it's played over the air” – has tried to lure the FCC into the fray. 

And the FCC has taken the bait.

In June MusicFIRST filed its Request, alleging that, “[b]y using their licenses over public airwaves to promote their own pecuniary interests and to distort an important matter of public debate”, broadcasters are violating their public interest obligations. The Coalition suggested that the Commission should consider “strengthening the license renewal process and shortening license terms”.

Acting with unusual speed – in our experience, this kind of declaratory ruling request can gather dust for months, if not years, before the FCC even acknowledges that it’s been filed – the Commission has invited comments. In particular, the agency is looking for input on the following points:

  • whether and to what extent certain broadcasters are “targeting and threatening artists who have spoken out in favor of the PRA,” including a refusal to air the music of such artists;
  • the effects of radio broadcasters’ alleged refusal to air advertisements from MusicFIRST in support of the PRA;
  • whether and to what extent broadcasters are engaging in a media campaign, coordinated by NAB, which disseminates falsities about the PRA; and
  • whether certain broadcasters have evaded the public file requirements by characterizing their on-air spots in opposition to the PRA as public service announcements.

MusicFIRST is clearly trying to get broadcasters’ attention by attacking them where they are arguably most vulnerable – in the soft white underbelly of the regulatory/licensing process.

Of course, the Request does not ask the FCC to address the merits (or lack thereof) of the PRA . . . and properly so, since the FCC has neither the expertise nor the statutory authority to weigh in on such issues. Rather, the Request gets the FCC’s attention by claiming that at least some broadcasters may not be playing by the rules and may be acting unfairly in some way. Using that as a hook, MusicFIRST suggests regulatory responses (e.g., shortened renewal terms, possible disciplinary action) that might, um, incentivize broadcasters to be more, er, open to the PRA and its advocates.

The Request is particularly interesting for what it does not provide: any significant, detailed, factual information to support its extravagant claims of some industry-wide cabal resulting in rampant disregard for any particular rule(s). While the Request purports to “reveal a pattern of threats and intimidation by which broadcasters are using their licenses” improperly, the Request describes in the tersest possible manner a total of five instances of such supposed misconduct. And those instances are not identified with respect to the station(s) in question or the artists who were supposedly threatened or intimidated. While such vague, unverified and unverifiable charges may have worked for Joe McCarthy back in the day, we thought that government had gotten past that particular gambit by now. Apparently not.

Moreover, even if the five examples sketched anonymously in the Request could be shown to be every bit as bad as MusicFIRST would have us believe, that would still reflect the conduct of but a very, very small handful of stations in a radio industry numbering more than 14,000 stations. (By the way, one of the five anonymous instances referred to in the Request has been tracked down by a newspaper: it turns out to be a 100-watt noncommercial high school station in Delaware at which the students opted for a one-month boycott of MusicFIRST-related artists two years ago. It would be difficult to claim with a straight face that that incident reflects some industry-wide “pattern of threats and intimidation”.)

The Request also alleges that “broadcasters are refusing to accept ads” from MusicFIRST and its allies relative to the PRA. Again, however, the “evidence” of such refusals is slim at best. The Request mentions six – count 'em, six – stations (by call sign) which purportedly declined the MusicFIRST spots. It also says that a request to run the spots “in 38 different markets on a variety of different types of stations” was sent to Clear Channel – and as of the date of the Request, Clear Channel had not responded, even though “[i]t has now been over a week since we sent the script.” No real smoking gun there.

The Request claims that broadcasters are “spread[ing] malicious and untruthful information about the PRA.” MusicFIRST’s knickers are all in a twist because, for example, some anti-PRA materials distributed by some broadcasters refer to the PRA as a “tax”.   MusicFIRST’s position is that the term “tax” can refer only to situations involving making payments to a government, and since the PRA provides for no such payments, well, then, obviously, use of the word “tax” has got to be a Big Lie. But the word “tax” also means “a heavy burden”, without reference to the precise nature of the burden. If the promo items in question had been hypertechnical legal documents in which the use of the word “tax” called for ultra-precision, MusicFIRST’s criticism might have some basis. But the materials don’t appear to have called for such nice distinctions. And since pretty much everybody agrees that the PRA would, in fact, impose a heavy burden on broadcasters, it’s hardly malicious or untruthful to refer to it as a “tax”.

Finally, MusicFIRST frets that all of this supposed nefarious skullduggery is being orchestrated by the NAB and is “blatantly anti-competitive”.

So, gesticulating wildly at all that blue smoke and all those mirrors, MusicFIRST urges the Commission to come to the rescue. Interestingly, while the gist of the Request sounds an awful lot like a complaint under the long-gone Fairness Doctrine, MusicFIRST defensively claims that that’s not the case. But it asserts that broadcasters “have a statutory duty to use their monopoly . . . responsibly and not simply to further their own economic interests.”

The Commission, for its part, acknowledges that “substantial First Amendment interests are involved in the examination of speech of any kind.” It also recognizes that no remedies may be necessary, or available, to address the activities which MusicFIRST alleges.

But none of that is stopping the Commission from jumping right into this fracas with both feet, notwithstanding the anonymous, non-specified, unverified and unverifiable nature of MusicFIRST’s claims. By doing so, the FCC seems to be signaling its sympathy for the artists’ position – for sure, by inviting any comments at all the Commission appears to be giving the benefit of every conceivable doubt to MusicFIRST.

If you want to chip in your two cents’ worth, you have until September 8, 2009 to file comments. Reply comments are due by September 23.