NEW FCC RULES BAN LOUD COMMERCIALS; PROMOTE "CALM"
The FCC has adopted new rules governing how loud commercials may be in digital programming, in response to the Commercial Advertisement Loudness Mitigation (“CALM”) Act. As a result, beginning December 13, 2012, all digital TV broadcasters, digital cable operators and other digital multichannel video programming distributers (“MVPDs”) must make sure that their digital TV commercials are transmitting at volumes no louder than the accompanying program, in accordance with industry standards. For the first time the television industry must monitor and if necessary adjust the loudness of television commercials.
Who Must Comply? The new rules apply to digital TV commercials broadcast on digital TV or cable stations as well as to digital MVPDs. The new rules do not apply to analog broadcasts or to non-digital MVPD service. The new rules will not apply to noncommercial broadcast stations unless the stations transmit commercial advertisements as part of an ancillary or supplementary service. Under limited circumstances the FCC may grant waivers based upon financial hardship.
Who is Responsible for Compliance? Complying with the new rules will vary based on whether the commercial is locally inserted or embedded. “Locally inserted” commercials are added by the station or MVPD prior to transmission to the public, while “embedded” commercials are placed in the programming by a third party and then transmitted by the station or MVPD. Most stations or MVPDs will have a higher standard of care for locally inserted commercials than for embedded commercials.
What is the Standard of Compliance? The FCC has created safe harbors for embedded and for locally inserted commercials. For embedded commercials, stations and MVPDs must have the proper equipment to pass through compliant programming from third parties. Compliant programming means programming that uses industry accepted standards for ensuring that commercials will be transmitted at appropriate levels consistent with the Commission’s rules and the CALM Act. The equipment must be properly installed, maintained and utilized. The stations and MVPDs must obtain certifications of compliance from the programmers, must conduct annual spot checks of non-certified programming and must conduct spot checks of specific channels in the event the FCC so directs. The spot checks will vary depending upon the size of the television station or MVPD, with rigorous spot checking for the largest entities and less to no spot checking for the smaller stations and MVPDS. The FCC plans to phase out the spot checks after completion of two annual spot checks, as more programmers certify compliance. A station or MVPD is eligible for the safe harbor for embedded commercials in a particular program if the programmer provides a certification that the programming is compliant and the station or MVPD has no reason to believe the certification is false.
For locally inserted commercials, in addition to proper installation and maintenance of equipment, the station or MVPD must maintain records showing the use of the equipment in the regular course of business and that the equipment is maintained and tested to ensure continued proper operation. The station or MVPD must be able to certify that it has no knowledge that the equipment is in violation of industry standards and if a violation has occurred, that the equipment has been repaired in a prompt manner.
Television stations, cable operators and MVPDs will need some time to adapt to these new requirements. Although the requirements do not go into effect for a year, common sense dictates taking steps now to get ready for the new requirements. This includes researching and if necessary making plans to purchase any equipment, establishing procedures for complying with the new rules and above all, keeping accurate and complete records.
Presumably, it will take months (perhaps years) for some programmers to bring all of their programming (and inserted commercials) into compliance. Therefore, careful scrutiny of programming should be undertaken, certainly during the two-year period when the FCC will require spot checking.