FCC Working Group Releases Blueprint for Future of Media

Posted by David G. O’Neil on June 27, 2011

The FCC recently released a long-anticipated report on the future of journalism and localism, prepared by the FCC Working Group on the Information Needs of Communities. 

The report, entitled “Information Needs of Communities: The Changing Media Landscape in a Broadband Age,” could be a potential road map for the FCC moving forward on overhauling and updating the agency’s regulatory approach to print, broadcast, cable and the Internet. The report’s conclusions and recommendations are important because they signal the most current thinking of FCC staff about their roles as regulators.  Nevertheless, a lengthy process remains to transform these recommendations into regulations and policy.  It is unclear how many recommendations ultimately will be adopted. 

The working group comprises journalists, scholars, entrepreneurs and government officials, all of whom the FCC selected.  In 2009, a bipartisan commission by the Knight Foundation considered how technology is changing how the media functions and communities receive and process information.  The Knight Commission called on the FCC to examine these issues more closely, which led to formation of the working group.    

The report presents an optimistic view of the state of journalism.  News and information gathering is more vibrant than ever, and local news continues to play a vital role for media.  Commercial and nonprofit media are working on collaborative projects.  Nonprofit media have become more varied and more important.  The Internet has led to the free exchange of ideas and information.  The report, however, observes that the abundance of media outlets does not necessarily translate into an abundance of reporting. 

How does the working group propose to bridge this gap between the growth of media outlets and the reduction in reporting?  Through a combination of reducing regulatory burdens on media, encouraging entrepreneurship and philanthropy, and focusing on the historically underserved.  Here are some key components of the report: 

Online Disclosure and Transparency.  The report advocates that broadcasters should be required to provide more information about their operations online.  For example, the report recommends: 

  • eliminating the FCC’s requirement that local television stations retain a paper copy of their quarterly-issues programs lists and replacing it with a streamlined, web-based form. The form could include the amount of community-related programming, news-sharing and partnership arrangements, how multicast channels are being used, sponsorship identification, disclosures and the level of website accessibility for people with disabilities. 
  • requiring broadcasters to disclose any pay-for-play arrangements online in addition to the current required on-air disclosures. 
  • requiring satellite operators to post their disclosure forms online. 
  • migrating online or eliminating any material that FCC licensees are required by law to keep in public files and repealing the burdensome enhanced disclosure rules adopted in 2007.  These rules, which have not taken effect, were designed to replace the broadcaster’s quarterly issues/programs lists with a standard form that would report detailed programming information to the Commission and would post the completed form on the Internet. 
  • terminating the FCC’s localism proceeding, which proposed among other items that broadcast stations create community advisory boards, require staff to be on site whenever a station was on the air and provide reports on the quantity of local music played. 
  • formally repealing any remnants of the Fairness Doctrine, which was stricken in 1987. 

Universal Broadband. The report finds that local media innovation, as well as the information health of communities, requires a universal and open Internet. Efforts to expand broadband would include the use of voluntary incentive auctions for commercial and noncommercial broadcasters. 

Underserved Audience.  The report recommends that the FCC ensure that modern media work for people in historically underserved areas.  The report suggests: 

  • reserving TV channels 5 and 6 for TV and radio opportunities for new small businesses, including those owned by minorities and women. 
  • implementing the Local Community Radio Act in a manner that supports the growth of LPFM stations. 
  • that Congress restore the tax certificate program to promote diversity in media ownership. 

State-based C-SPANs. To promote the availability of local public affairs programming, the working group recommends establishment of a state-based C-SPAN in every state and that Congress give regulatory relief to multichannel video programming distributors who help facilitate such networks. 

Media Ownership and Access.  The report remains neutral with respect to increased media ownership, favoring an approach that considers the impact of the Commission’s rules as currently crafted or proposed on local news and public affairs reporting in the community as a whole.  The report implies that the focus of media ownership is whether the arrangement contributes to the overall media health of the community.  This approach may give some hope to broadcasters in smaller markets that the FCC may someday be more open to consolidation. The report also recommends re-assessment of the effectiveness of the satellite TV set-aside for educational programming and of cable TV leased access systems. 

Public Interest.  The report’s public interest analysis is its most interesting and surprising aspect.  The report concludes that many rules intended to advance public interest goals are ineffective and out of sync with the information needs of communities and the nature of modern local media markets.  In some cases, policies do not achieve their intended goals.  In other cases, policies that might have once made sense have not kept up with changes in media markets.  Several policies are not sufficiently oriented towards addressing the local information gap.  Most of all, any rules or policies must live within and respect the essential constraints of the First Amendment. 

Notably, the report states that government is not the solution to providing robust local news and information but can remove obstacles confronting those working to solve these problems.  Instead, most of the solutions to today’s media problems will be found by entrepreneurs, reporters and creative citizens, not by legislators or administrative agencies. 

In 475 pages filled with recommendations, the report defies a quick and simple analysis.  At first blush, one is stricken by the report’s ambitious, comprehensive nature; in the end, however, such scope guarantees that each and every recommendation will not ultimately become law.  Some will face Constitutional challenges (such as any laws that specifically favor minorities or females as opposed to small businesses) and others will face challenges from competing interests and other stakeholders.  All of this assumes of course that there is no change in administration next year, in which case the report could find itself relegated to the dustbin of history, as have so many previous reports. 

One last point: it does not necessarily follow that adoption of these recommendations will result in massive government deregulation.  For example, while substitution of a new disclosure form for the quarterly issues/programs list and elimination of the enhanced disclosure form is certainly welcome news, the report does recommend adopting a new disclosure form.  A parallel example may be the changes in the FCC’s Equal Employment Opportunity (“EEO”) policies; a change from the agency’s traditional analysis to the modern EEO Program Reports.  Although the changes modernized the EEO process, by no means did it unburden broadcasters’ EEO obligations. 

Even with these provisos, the report represents an impressive accomplishment in bringing the discussion of journalism, localism and the media into modern times.

TelecomMediaTech Law Blog Recognized

Posted by Rini Coran, PC on June 15, 2011

Rini Coran, PC's TelecomMediaTech Law Blog has been recognized by Guide to Computer Training as among the very best telecommunications blogs in America. In selecting TelecomMediaTech Law Blog for inclusion, the Guide to Computer Training noted that "There's no denying the world's excitement in learning about the latest telecommunications innovation to come along, on what feels like an almost daily rate. At the same time, we're all cognizant of how important it is that the industry be monitored and kept in line. This blog helps its readers understand more of the legislation that surveys the industry, ensuring that innovation is matched with respect and discipline." Steve Coran's blog post about TV white spaces also was recognized. Managing attorney Robert Rini says: "We launched the blog six months ago to better engage our clients and opinion leaders in a dialogue about telecom issues, from our unique perspective. The response has exceeded our expectations, demonstrating the power of new media to influence outcomes in Washington, DC."

FCC's Outage Reporting NPRM: Comment and Reply Comment Deadlines Set

Posted by Rini O'Neil, PC on June 10, 2011

The Federal Register reports the publication of deadlines for the FCC’s Notice of Proposed Rulemaking seeking to extend outage reporting requirements to interconnected VoIP and broadband Internet service providers. Comments are due August 8 and Reply Comments are due October 7. My earlier blog post about the proposed rules is here.

Shhh! FCC Proposes Rules to Turn Down Loud Commercials

Posted by Rini Coran, PC on June 09, 2011

There’s a kind of hush on the way as lawmakers and regulators in Washington, DC have quickly escalated their war on loud commercials in video programming.  On May 27, 2011, the Federal Communications Commission proposed new rules to implement the Commercial Advertisement Loudness Mitigation Act (the “CALM Act”), enacted by Congress on December 15, 2010.  These rule changes would incorporate new technical standards aimed at requiring broadcast stations, cable operators and other multichannel video programming distributors (“MVPDs”)  to turn down the volume of commercials in video programming. The FCC is required to prescribe regulations by December 15, 2011, and the new regulations would have to take effect within one year after the date they are adopted.  The comment cycle has been announced in the Federal Register. Comments are due on or before July 5, 2011 and reply comments are due on or before July 18, 2011. 

What has prompted legislation and new regulations designed to give viewers serenity from loud commercials?  According to the FCC, complaints about loud commercials are not new, but the rise of digital television has expanded the dynamic range of audio, both in program material and in commercials. The FCC stated that it has received more than 800 complaints about “loud commercials” since January 2008.  The CALM Act is not only specific in how Congress expects the FCC to tackle the issue, it also sharply limits the FCC’s authority on the matter.

As the CALM Act requires, the new rules would incorporate a technical standard published by the Advanced Television Systems Committee (“ATSC”) called ATSC A/85. A consumer’s home receiver would be capable of automatically adjusting volume based on metadata (called a “dialnorm”) encoded in the programming.  These volume adjustments would occur as programming transitions between program material and commercials or when the viewer changes channels.  Under the proposed rules, the ATSC A/85 standard and “successor” standards would be incorporated by reference into the rules and that public notice and an opportunity for comment would not be necessary.

For broadcasters and MVPDs, the new regulations likely will produce disquiet about increased regulatory risk and legal liability. Some considerations: 

  • The rules would apply to all commercials transmitted by a broadcaster or an MVPD. There be no exceptions for commercials that are inserted by third-party content providers; thus raising questions about who bears the ultimate responsibility for compliance.  The rules would not be enforced directly against third-party content providers, and there will be situations where responsibility remains to be allocated – for example, if an MVPD carries a broadcast station’s programming that contains loud commercials.
  • The FCC has raised some interpretive questions regarding what counts as a “commercial advertisement” for purposes of the rules. For example, the FCC wants to know whether the rules would include political ads by a legally qualified candidate or promotions of specific video programs. In addition, the FCC has asked about the impact on noncommercial broadcast stations, which are legally prohibited from broadcasting advertisements.
  • Broadcasters and MVPDs would have new burdens to demonstrate compliance with the rules in response to a consumer complaint alleging loud commercials.  Compliance could occur with respect to a “safe harbor” under the statute or in other ways.  To qualify for the safe harbor, the entity would have to install, utilize and maintain in a “commercially reasonable manner” the equipment and necessary software to comply with the ATSC A/85 standard.  The FCC has sought comment on what practices are “commercially reasonable” for this purpose.  The FCC also wants to know other ways compliance can be demonstrated. For example, stations and MVPDs may choose to enter into agreements with content providers whereby the provider would agree to deliver content that complies with ATSC A/85 RP. The station or MVPD would remain responsible but could choose to negotiate for indemnification clauses in these contracts.
  • Broadcast stations and MVPDs would be able to apply for a limited, one-year waiver from the CALM Act requirements based on financial hardship.  The FCC cites a Senate Committee report that estimates the cost of equipment as ranging from a few thousand to about $20,000 per device.  Under the FCC’s proposal, financial hardship would be demonstrated based on evidence of the station’s financial condition, cost estimates for new equipment, a detailed explanation of the justification for the postponement and an estimate of the time to comply.  Waiver proponents would not be required to demonstrate financial hardship.  The FCC has sought further comment regarding whether blanket waivers may be necessary in smaller markets.
  • The FCC has identified “practical challenges” in compliance for some MVPDs who use a different type of audio system than the AC-3 system for which the technical standard was designed but who nevertheless would be subject to the rule.  The FCC has sought comment about these challenges.
  • Some providers receive program material from third-party programmers.  The FCC wants input on the technical ability to pre-screen that content for loud commercials.
  • The FCC has proposed a consumer-driven complaint process whereby consumers would be permitted to prepare and submit an online form that relates specifically to complaints about loud commercials.  There would be no filing fee, but the complainant would be required to submit contact information and specific information about the programming that is the subject of the complaint.  The broadcaster or MVPD receiving the complaint would be expected to retain records and documentation to demonstrate compliance. 

Despite the prevalence of digital video recorders (or more importantly, their fast-forward functionality) and the volume button on remote controls, through the CALM Act, Congress has charged the FCC to act quickly to combat loud commercials.  As the NPRM makes clear, however, questions remain, and we have yet to hear the answers.