Last month, we wrote about the FCC issues facing broadcasters in 2015. Today, we’ll look at decisions that may come in other venues that could affect broadcasters and media companies in the remaining 11 months of 2015. There are many actions in courts, at government agencies and in Congress that could change law or policy and affect operations of media companies in some way. These include not just changes in communications policies directly, but also changes in copyright and other laws that could have a significant impact on the operations of all sorts of companies operating in the media world.
Starting with FCC issues in the courts, there are two significant proceedings that could affect FCC issues. First, there is the appeal of the FCC’s order setting the rules for the incentive auction. Both Sinclair and the NAB have filed appeals that have been consolidated into a single proceeding, and briefing on the appeals has been completed, with oral arguments to follow in March. The appeals challenge both the computation of allowable interference after the auction and more fundamental issues as to whether an auction is even permissible when there is only one station in a market looking to give up their channel. The Court has agreed to expedite the appeal so as to not unduly delay the auction, so we should see a decision by mid-year that could tell us whether or not the incentive auction will take place on time in early 2016.
Also in the Courts is the challenge to the FCC’s decision determining that TV Joint Sales Agreements are attributable interests – agreements that can be entered into only between stations that can be co-owned under the multiple ownership rules. Parties challenge whether the FCC had the record to establish that these agreements were not in the public interest, as well as other details of the FCC’s decision not to review various aspects of the ownership rules at the same time when it adopted its JSA rules as part of the last Quadrennial Review. Certain DC public interest groups are also appealing – arguing that the FCC didn’t go far enough in tightening the ownership rules. That case is not moving as fast as the incentive auction case, so we’ll be lucky if we see a decision this year.
FCC issues are also being considered in Congress. Congress is talking about communications changes both large and small – some suggesting a rewrite of the Communications Act, which was last substantially rewritten in 1996. Almost 20 years later, some have suggested that the communications world has changed dramatically, and the statute governing the industry should change to meet today’s marketplace conditions. Many of the calls for changes come from those dealing with questions like net neutrality and other issues in the broader telecommunications world. Similar issues also drove the 1996 reforms, yet very significant broadcast regulatory changes (which we summarized here) made their way into that legislation. So broadcast issues could quite well come up in any review of the Communications Act. While some have suggested that the review of the Communications Act will only involve procedural changes in the way FCC adopts rules (adopting requirements for more consideration of the economic costs of such regulations) and the processes that apply to dealing with applications pending before the agency (e.g. putting stricter time limits on agency actions and restricting conditions that are put on mergers), whatever the initial goal of the reform, it will likely grow in unanticipated directions. However, how long it would take to adopt any such reforms (when Congress has not even held hearings on many of the specific reforms being considered) is a big question, so whether such legislation will be finalized anytime soon is unknown.
Congress could also get involved in other areas in which media companies have interests. While we suggested that Congress might get involved in privacy issues last year, there was no such comprehensive reform. So, as more media companies rely on targeted advertising in connection with their digital properties and otherwise collect and keep information about viewers and listeners, there are concerns by some that this information could be misused. Fears are heightened as personal information is associated with location information from mobile phones or even cars as cars become connected to the Internet. Thus, privacy, too, may still be on the table in this Congress. In addition, the FTC and other government agencies have talked about rules and guidelines to govern the use of personal information. As some states like California become more active in adopting their own privacy rules, some look for one uniform national policy to be adopted. Maybe this will be the year that these matters are considered.
We have written about patent issues that have affected broadcasters as well as other digital companies including podcasters and, recently, some companies using the Ibiquity digital radio platform. While the Patent laws were amended in the last few years to try to cut down on patent claims, some businesses still consider the current rules still too capable of abuse, and have been pushing Congress for further reform. There was some thought that there would be legislation last year, but as the bills that were introduced died without passing both houses of Congress, these issues will be back again this year.
Congress also started looking at music licensing reform last year. As we wrote last year, Chairman Goodlatte of the House Judiciary Committee promised a “Music Bus” legislation addressing all sorts of music issues that currently face digital music companies and copyright holders. Expect that legislation to be back on the table.
That is especially true, as both the Copyright Office and the Department of Justice are also looking at music issues, with both expected to issue reports and recommendations during the course of the first half of the year. The Copyright Office is looking at all issues involved in music licensing (see our articles here and here), with its recommendations going to Congress. The DOJ’s recommendations will deal with the ASCAP and BMI antitrust consent decrees (see our summary here), and those would go to the Courts that administer the consent decrees. With all of these proceedings going on, Congress may well be under pressure to enact reform legislation to deal with all of the suggestions that it will be receiving.
Pressure on Congressional copyright reform may also come from the lawsuits on pre-1972 sound recordings. Cases have been pending against Pandora and Sirius XM, and after some initial decisions that decided that there was a public performance right in pre-1972 sound recordings (which will no doubt be appealed, see our article here and the other articles to which it links), cases have recently been filed against many other digital music services. These rulings, if read broadly, could even suggest that a performance right exists for the use of pre-1972 sound recordings by broadcasters and even retail businesses – even though no such rights exist under Federal law for post-1972 recordings. Watch for further developments in those cases, including appeals of the initial decisions.
The Copyright Royalty Board will also be deciding on the royalty rates for webcasters before the end of this year. We wrote about the proposals of the parties litigating the case here. That decision, under the statute governing the CRB, needs to be released by December. The CRB also has before it a proceeding to revise the recordkeeping obligations of webcasters (see our summary here). We could also see a decision in that proceeding this year.
Finally, there has been discussion of even broader copyright reform. The Department of Commerce started a study by issuing a Green Paper on copyright reform in 2013 (see our summary here), and Congress has also held hearings on broader Copyright issues. Questions about appropriate damages for copyright infringement, and the scope of the safe harbor for user-generated content, are among the issues being considered. Like in the communications industry, once a bill starts to move, who knows what issues will end up being considered as part of the final legislation?
This is a list of plenty of issues for broadcasters and digital media companies to consider, and other issues will no doubt come up. So watch carefully to see how these play out as the rest of the year progresses, and how these actions could affect your business.