Webcaster Wake-Up Call! A To-Do List For NONCOMMERCIAL Webcasters

New year brings filing deadlines for noncommercial webcasters

The beginning of another year brings renewed obligations for all broadcasters who are operating a non-interactive webcast (as opposed to an on-line service that provides interactive downloads or podcasts). That universe is populated by three separate and distinct types of webcasters, each of which has slightly different obligations from the others. Those three types are: (1) commercial webcasters; (2) noncommercial webcasters; and (3) noncommercial educational webcasters.

Important definitional note: For purposes of webcasting royalties, the distinction between commercial and noncommercial is not based on the nature of the underlying broadcast license. Rather, it’s based on the reporting entity’s status under Section 501 of the Internal Revenue Code. If a webcaster is exempt from taxation under Section 501, it is deemed to be NONcommercial when it comes to webcaster royalty matters. And if a noncommercial webcaster’s operation is substantially staffed by students, it is a noncommercial educational webcaster. This post is addressed to noncommercial licensees. (Simultaneously with this item we are also posting similar items for the other two types of webcasters – so if you happen to be commercial webcaster or a noncommercial educational webcaster, look elsewhere here on CommLawBlog.com for a post addressed to your own particular situation.)

If you are engaged in the NONCOMMERCIAL WEBCASTING of one or more streams, your first filing of the new year – primarily consisting of an annual minimum fee statement of account with payment of $500 per channel – is due on January 31, 2011.  But your obligations continue throughout the year with statements of account and playlist reports of use required on a monthly basis. 

Noncommercial webcasters (unlike their commercial and educational counterparts) have several decisions to make. The eligibility requirements described below should be reviewed carefully.

A.        Noncommercial webcasters who have NOT elected to participate in any major webcaster settlement agreement

There is absolutely no distinction on the noncommercial side between a webcaster that operates a broadcast station and one that does not. But there is a distinction between an entity that elects to participate in the general noncommercial webcasters settlement agreement (the “General Agreement”) and one that does not.  (Note: Participation in that agreement offers significantly better terms, in my view.) Fortunately, you can elect that status even if you have not done so before. (Helpful reminder: even if you have previously elected that status, you must “re-up” every year.) For reasons discussed in Section C below, I strongly recommend that the General Agreement option be chosen, if at all possible.

However, if you cannot or decide not to participate in the General Agreement or any other webcaster settlement agreement, your obligations are:

Annual Minimum Statement of Account Form and Fee – File an annual minimum fee of $500 per channel by January 31, 2011 using the 2011 Noncommercial Webcaster Minimum Fee Statement of Account form found here. A separate form must be filed for each channel or station. 

Monthly Statement of Account Form and Fee – File any fees incurred for exceeding the 159,140 aggregate tuning hour maximum, along with the 2011 Noncommercial Webcaster Monthly Usage Statement of Account form found here.  You must file this form even if no fees have been incurred, marking “zero” in the "excess performances" column.  Again, a separate form must be filed for each channel or station.

Playlist Reports of Use – Playlist Reports of Use must be filed on a quarterly basis using the template report for filing (in Excel format) found here, unless you exceed 159,140 aggregate tuning hours in a given month during 2010 or 2011, in which case you file on monthly basis. Also note that you may be able to opt out of this requirement if you qualify as a Noncommercial Microcaster (see Section D below for details).

Notice of Election – No notice of election is required. 

B.        Noncommercial webcasters who HAVE elected to participate in the webcaster settlement agreement between CPB (on behalf of PUBLIC RADIO STATIONS) and SoundExchange

As in previous years, some noncommercial stations do not have to file forms with SoundExchange. Entities subject to this exemption include station that are: CPB-supported; NPR members; National Federation of Community Broadcasters members; or part of American Public Media, the Public Radio Exchange or Public Radio International. Under the terms of the separate CPB/SoundExchange settlement agreement, NPR’s Public Radio Interactive is making those payments. Stations participating in the CPB/SoundExchange agreement will be contacted by Public Radio Interactive with regard to their obligations.

C.       Noncommercial webcasters who HAVE elected to participate in the General Agreement and are NOT considered Microcasters because they have an average of at least 44,000 aggregate tuning hours per year 

While a decision (“Webcasting III”) by the Copyright Royalty Board last December sets the default royalty rates and related terms for non-interactive webcasters, those rates and terms vary somewhat from rates and terms specified in the General Agreement. If you are a party to the General Agreement (and I recommend that all eligible entities take this option), you are still subject to certain obligations. (As mentioned in Section A, above, you must renew this classification each year.) Those obligations include:

Notice of Election – File a Notice of Election by January 31, 2011 on the 2011 Notice of Election for Rates and Terms for Noncommercial Webcasters Form found here. 

Annual Minimum Statement of Account Form and Fee – File an annual minimum fee of $500 per channel by January 31, 2011 using the 2011 Noncommercial Webcaster Minimum Fee Statement of Account form found here. A separate form must be filed for each channel or station.

Monthly Statement of Account Form and Fee – File any fees incurred for exceeding the 159,140 aggregate tuning hour (ATH) maximum, along with the 2011 Noncommercial Webcaster Monthly Usage Statement of Account form found here. You must file this form even if no fees have been incurred, and you must calculate and insert your total ATH in the appropriate columns even if you do not exceed the maximum. Again, a separate form must be filed for each channel or station.

Playlist Reports of Use – Playlist Reports of Use must be filed on a quarterly basis using the template report for filing (in Excel format) found here, unless you:

exceed 159,140 aggregate tuning hours in a given month during 2010 or 2011, in which case you file on monthly basis; and

do not exceed 44,000 aggregate tuning hours in the entire year 2010, in which case you can pay $ 100 for the right to be exempted from this requirement altogether, as per section D, below. 

D.        Noncommercial Webcasters who HAVE elected to participate in the GENERAL AGREEMENT and ARE considered Microcasters because they had fewer 44,000 aggregate tuning hours last year.

This section applies to extremely small noncommercial webcasters who have signed onto the General Agreement. As we have explained in years past, these webcasters can be exempted from the playlist reporting requirement and, by definition, will not be paying royalties because they will never exceed 159,140 aggregate tuning hours in any given month.  Again, to be eligible, you must have elected to participate in the General Agreement in previous years and renew that election this year.

If you choose this category, your obligations are:

Notice of Election – File a Notice of Election by January 31, 2011 on the 2011 Notice of Election for Rates and Terms for Noncommercial Microcaster Form found here. If you wish to avoid filing Playlist Reports of Use, you must file a $100 proxy fee with this form.

Annual Minimum Statement of Account Form and Fee – File an annual minimum fee of $500 per channel by January 31, 2011 using the 2011 Noncommercial Microcaster Minimum Fee Statement of Account form found here. A separate statement of account must be filed for each channel or station.

Monthly Statement of Account Form and Fee – By definition, a station in this classification will not exceed 159,140 aggregate tuning hours, so no monthly statement of account is required.  

Playlist Reports of Use – Of course, the benefit of this classification is that you can opt out of filing Playlist Reports of Use. If you do not choose this option, the reports must be filed on a monthly basis; SoundExchange prefers that you adhere to the template report for filing (in Excel format) found here. Each Playlist Report of Use is also due within 45 days of the end of the month to which it pertains. 

Again, the requirements described in all of the above sections do not apply to "noncommercial educational" webcasters, i.e., noncomm stations whose operations are not substantially staffed by students. If you are a noncommercial educational webcaster, you should review our post relating to your particular situation.

Remember, your annual minimum statement of account forms and payments (and Notice of Election, if applicable) are due by January 31, 2011.  You cannot file these forms electronically, and there is a penalty for late payment (or worse consequences, for late-filing a Notice of Election), so if you haven’t gotten started yet, now would be a good time.