President obama signs commercial loudness law for television stations
PRESIDENT OBAMA SIGNS COMMERCIAL
LOUDNESS LAW FOR TELEVISION STATIONS
Part 1
President Obama has signed the Commercial Advertisement Loudness
Mitigation Act. The CALM Act was passed by Congress on December 2,
2010. The new law generally requires television broadcasters to keep
commercials at the same volume as the programs during which they are
run.
LOW-POWER FM BILL PASSES
HOUSE AND SENATE
In the waning days of the lame-duck congressional session, the House of
Representatives voted to approve the Local Community Radio Act of 2010
(H.R. 6533), which would, among other things, require the FCC to
eliminate third-adjacent minimum distance separation requirements
between low-power FM stations and full-service FM, FM translator, and
FM booster stations. Following passage in the House, the Senate
approved the House version of the bill.
COPYRIGHT ROYALTY BOARD ISSUES
WEB STREAMING RATES FOR 2011-2015
The Copyright Royalty Board has released a decision that sets royalty
rates for 2011-2015 for noninteractive webcasting services, including
terrestrial radio broadcasters that stream programming on the Internet.
COMMERCE DEPARTMENT CALLS FOR
ONLINE PRIVACY BILL OF RIGHTS
The U.S. Department of Commerce has issued a report calling for the
adoption of a “Privacy Bill of Rights” to protect online consumers’
personal information and data and the creation of a new federal office to
develop related rules.
PRESIDENT OBAMA SIGNS COMMERCIAL
LOUDNESS LAW FOR TELEVISION STATIONS
President Obama has signed the Commercial Advertisement Loudness Mitigation
Act (“CALM Act”). The CALM Act was passed by Congress on December 2, 2010. The
new law generally requires television broadcasters to keep commercials at the same
volume as the programs during which they are run.
As previously reported, the CALM Act requires the FCC, by December 15, 2011,
to adopt regulations that require television stations to comply with ATSC’s A/85
standard—ATSC’s recommended practices for establishing and maintaining audio
loudness for digital television. The Act requires that the FCC’s rules go into effect one
year from the date the new rules are adopted. Therefore, it will likely be December 2012
before the FCC begins enforcing the new rules. However, television broadcasters will
wish to review the ATSC A/85 standard carefully, as compliance with the standard may
require them to purchase and install additional equipment by the time the rules go into
effect in 2012.
Television stations and MVPDs who are able to demonstrate that obtaining
equipment to comply with the FCC’s loudness rules would result in “financial hardship”
may be granted a waiver for one year by the FCC, with an additional year, if necessary.
The CALM Act does not define what constitutes a “financial hardship,” but presumably
the FCC will provide guidance when it adopts new rules to implement the CALM Act.
The CALM Act also includes a provision that allows any television station that
“installs, utilizes, and maintains” equipment and associated software in compliance with
the FCC’s loudness rules (once adopted) to be deemed in compliance with the
Commission’s loudness rules. We will monitor the proceedings required to implement the
CALM Act and apprise you of significant developments.
LOW-POWER FM BILL PASSES HOUSE AND SENATE
In the waning days of the lame-duck congressional session, the House of
Representatives voted to approve the Local Community Radio Act of 2010 (H.R. 6533),
which would, among other things, require the FCC to eliminate third-adjacent minimum
distance separation requirements between low-power FM stations and full-service FM, FM
translator, and FM booster stations. Following passage in the House, the Senate approved
the House version of the bill, and, as of December 27, 2010, the bill awaits President
Obama’s signature.
The bill attempts to provide certain additional interference protections for
broadcasters that were not included in earlier versions of the bill. However, the
elimination of third-adjacent channel protection continues to raise the possibility of
harmful interference to full-power FM stations and is of continued concern to broadcasters.
Fortunately, the bill requires low-power stations to report complaints of interference and to
take measures to remediate the problem. Whether these requirements will prove to be
adequate remains to be seen.
With a few important exceptions (detailed below), the bill is largely the same as the
version that passed the House in December 2009 (H.R. 1147), which we reported on in our
Legal Memorandum dated January 7, 2010. The earlier version of the bill, however, was
never voted on by the Senate.
Here is a summary of the bill that passed Congress and will become law once
signed by President Obama:
* Removal Of Certain Third-Adjacent Channel Minimum Distance Separation
Requirements. The bill requires the FCC to remove third-adjacent
minimum distance separation requirements between (1) low-power FM
stations and (2) full-service FM, FM translator, and FM booster stations.
* Second-Adjacent Channel Separation Requirements. The version of the bill
passed by Congress, in contrast to previous versions, expressly provides
that the FCC shall not amend its current rules to reduce the minimum cochannel
and first- and second-adjacent channel distance separation
requirements. However, the bill sets out a waiver process whereby any
low-power FM station may be granted a waiver of the second-adjacent
channel distance separation requirements if it can establish, “using methods
of predicting interference taking into account all relevant factors,” that its
proposed operations will not result in interference to any authorized radio
service. (Presumably the FCC will clarify what showing is acceptable
through a rulemaking proceeding.) Any low-power FM station that is
granted such a waiver must immediately suspend operations if it is notified
by the FCC that it is causing interference to the reception of an existing or
modified full-service FM station, and it cannot resume operations until it
either eliminates the interference or demonstrates that it did not cause the
interference.
* Compliance With Certain Minimum Distance Separation Requirements For
Radio Reading Services. The bill requires the FCC to apply its existing
minimum distance separation requirements (presumably including bandadjacency
protection) for full-power FM stations, FM translator stations,
and FM booster stations that broadcast radio reading services via an analog
subcarrier frequency to avoid potential interference by low-power FM
stations.
* Licensing Considerations And Availability Of Spectrum. The bill requires
the FCC, when considering applications for new FM translator stations, FM
booster stations, and low-power FM stations, to ensure that licenses are
available to FM translator stations, FM booster stations, and low-power FM
stations and that licensing decisions are made based on “the needs of the
local community.” The bill as amended still does not specifically define
any criteria for determining the needs of the local community. In contrast
to earlier versions, the 2010 version of the bill also affirms that FM
translator stations, FM booster stations, and low-power FM stations will
“remain equal in status [with respect to each other] and secondary to
existing and modified full-service FM stations.”
* Modification Of Certain Low-Power FM Rules. The bill requires the FCC
to amend the rules authorizing operation of low-power FM stations to
(1) prescribe protection for co-channels and first- and second-adjacent
channels, and (2) prohibit applicants that have engaged in the unlicensed
operation of any station from obtaining a low-power FM license. The bill
also renders invalid any license issued to a low-power FM station before
April 2, 2001, that does not comply with the rule amendments adopted by
the Commission.
* Protection Of FM Translator Input Signals. The bill requires the
Commission to modify its rules to address the potential for predicted
interference to FM translator input signals on third-adjacent channels.
* Procedures For Remediation Of Interference. The bill requires the FCC to
amend its interference complaint process (Section 73.810 of the FCC’s
Rules) in the following ways:
(1) For those low-power FM stations licensed at locations that do not satisfy
third-adjacent channel spacing requirements, the FCC must provide the
same interference protections that FM translator stations and FM
booster stations are required to provide under existing (as of the date
of enactment) interference rules. Generally, under these FCC rules, if
interference cannot be properly eliminated by the application of suitable
techniques, the offending FM translator or booster station must suspend
operations and may not resume operations until the interference has
been eliminated.
(2) For a period of one year after a new low-power FM station is
constructed on a third-adjacent channel, the low-power FM station must
broadcast periodic announcements alerting listeners that interference
they experience could be the result of the operation of the low-power
FM station on a third-adjacent channel. The low-power station must
instruct affected listeners to contact the station to report any
interference. The FCC must require all newly constructed low-power
FM stations on third-adjacent channels to (a) notify the Commission and
all affected stations on third-adjacent channels of an interference
complaint by electronic communication within 48 hours after the receipt
of such complaint, and (b) cooperate in addressing any such
interference.
(3) Low-power FM stations on third-adjacent channels must address
complaints of interference within the protected contour of an affected
station and will be “encouraged” to address all other interference
complaints, including complaints to the FCC based on interference to a
full-service FM station, an FM translator station, or an FM booster
station by the transmitter site of a low-power FM station on a thirdadjacent
channel at any distance from the full-service FM station, FM
translator station, or FM booster station. The Commission must provide
notice to the low-power FM station of the existence of such interference
within seven calendar days of the receipt of a complaint from a listener
or another station.
(4) To the extent possible, the FCC must grant a low-power FM station on a
third-adjacent channel the technical flexibility to remediate interference
through the colocation of its transmission facilities with any other
station on a third-adjacent channel.
(5) With respect to interference complaints, the FCC must (a) permit the
submission of informal evidence of interference, including any
engineering analysis that an affected station may commission; (b) accept
complaints based on interference to a full-service FM station, FM
translator station, or FM booster station by the transmitter site of a lowpower
FM station on a third-adjacent channel at any distance from the
full-service FM station, FM translator station, or FM booster station;
and (c) accept complaints of interference to mobile reception.
(6) For full-service FM stations that are licensed in significantly populated
states (more than 3,000,000 population and a population density greater
than 1,000 people per one square mile), the FCC must require all lowpower
FM stations licensed after the date of enactment of the bill and
located on third-adjacent, second-adjacent, first-adjacent, or co-channels
to such full-service FM stations to provide the same interference
remediation requirements to complaints of interference, without regard
to whether such complaints of interference occur within or outside of
the protected contour of such stations, under the same interference
complaint and remediation procedures that FM translator stations and
FM booster stations are required to provide to full-service stations as set
forth in the FCC rules (Section 74.1203). This provision was added to
the 2010 version of the bill and offers some additional protection to fullpower
FM stations located in larger markets.
* FCC Study On Impact Of LPFM Stations On Full-Power Commercial FM
Stations. The bill requires the FCC to conduct an economic study of the
impact that low-power FM stations will have on full-power commercial FM
stations. No later than one year after enactment of the bill, the FCC must
submit a report of the study to the Senate Committee on Commerce,
Science, and Transportation and the House Committee on Energy and
Commerce. However, the study and report requirement must not affect the
licensing of new low-power FM stations as otherwise permitted by the act.
President Obama is expected to sign the bill soon. We will monitor Commission
proceedings to implement the law and apprise you of significant developments.
COPYRIGHT ROYALTY BOARD ISSUES WEB
STREAMING RATES FOR 2011-2015
The Copyright Royalty Board has released a decision that sets royalty rates for 2011-
2015 for noninteractive webcasting services, including terrestrial radio broadcasters that
stream music on the Internet. The rates established by the Board apply to webcasters who
declined to “opt in” to various voluntary settlement agreements reached in 2009 between
SoundExchange and NAB (for commercial radio stations) and the Corporation for Public
Broadcasting (for certain noncommercial radio stations). The Board has adopted the same
rates for 2011-2015 as those provided in these two settlement agreements. In other words,
the same performance royalty rates will apply to commercial radio stations for 2011-2015
regardless of whether the stations opted in to the NAB-SoundExchange settlement. (For
additional information on the settlement agreements, please refer to our Legal Memorandum
dated March 20, 2009.)
The Board adopted the following streaming royalty rates for commercial terrestrial
radio broadcasters for the period 2011-2015:
Year Rate Per Performance
2011 $0.0017
2012 $0.0020
2013 $0.0022
2014 $0.0023
2015 $0.0025
A “performance” generally means each instance in which any portion of a song is played to a
listener. (Performance royalties are not required to be paid for “incidental” performances.
To be considered “incidental,” the music use: (1) must make “no more than incidental use of
sound recordings including, but not limited to, brief musical transitions in and out of
commercials or program segments, brief performances during news, talk and sports
programming, brief background performances during disk jockey announcements, brief
performances during commercials of sixty seconds or less in duration, or brief performances
during sporting or other public events”; and (2) must “not contain an entire sound recording”
or “feature a particular sound recording of more than thirty seconds,” unless it is ambient
music that is background at a public event.)
The minimum annual streaming fee for commercial radio stations is $500 per year
for each individual stream (e.g., broadcast simulcast, HD radio side channel, or web-only
stream). However, for any group owner, the per-stream minimum fee is capped at $50,000.
Also, where a broadcaster provides identical programming streams that originate from the
same website, such multiple streams will be treated as a single stream for purposes of the
minimum fee (provided that the performances are aggregated in calculating royalty fees).
The rates for commercial terrestrial radio stations discussed above are identical to the
royalty rates established in the NAB-SoundExchange agreement for commercial terrestrial
radio stations. In fact, the Board specifically considered this agreement as evidence of the
market rate for streaming radio signals. SoundExchange proposed, but the Board rejected, a
per-performance fee starting at $0.0021 in 2011 and escalating to $0.0029 in 2015.
Additionally, the Board adopted a “small broadcaster” reporting waiver identical to
the one provided in the NAB-SoundExchange agreement. Commercial radio stations that
qualify as “small broadcasters” may submit a $100 annual proxy fee in lieu of submitting
records of use reports. Generally, “small broadcaster” means a station that webcasts an
aggregate of fewer than 27,777 Aggregate Tuning Hours (ATH) per calendar year (roughly
the same number of performances that are covered under the minimum $500 fee).
Broadcasters who do not qualify for this limited waiver generally are required to submit
periodic reports of use. The Board also adopted royalty rates for noncommercial radio
stations that declined to “opt in” to the CPB-SoundExchange settlement agreement. Generally,
each noncommercial webcaster must pay a minimum annual fee of $500 per individual channel
or stream, which covers streaming up to 159,140 ATH per month. In any month that a
noncommercial station streams more than 159,410 ATH, the webcaster must pay
additional royalty fees on a per-performance basis that is identical to the rates described in
the table above for commercial stations. Again, this structure is identical to the settlement
reached between SoundExchange and CPB in 2009.
In addition to setting the performance royalty rates for the 2011-2015, the Board
officially adopted the settlement agreements reached between NAB and SoundExchange
and CPB and SoundExchange. The settlements resolved several royalty issues between
SoundExchange and terrestrial radio broadcasters, including royalty rates for the period
2006-2010 and 2011-2015. The agreements were required to be filed with the Copyright
Office, with an opportunity for the affected parties to comment, pursuant to the Webcaster