This Week in Regulation for Broadcasters:  October 14, 2024 to October 18, 2024

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

• The FCC’s Enforcement Bureau released its second EEO audit notice for 2024.  Audited stations and their station employment units (commonly owned stations serving the same area) must provide to the FCC their last two years of EEO Annual Public File Reports and other documentation showing that the stations complied with the FCC’s EEO rules.  Audited stations have until December 2 to upload the required information to their Online Public Inspection Files, although stations in Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia impacted by Hurricanes Helene or Milton may take additional time until January 16 to do so.  See our article here for more detail on EEO audits and the FCC’s concerns about broadcasters’ EEO obligations.
• In a case that shows the seriousness with which the FCC views the use of EAS tones where there is no emergency, the FCC proposed a $146,976 fine against ESPN for transmitting false Emergency Alert System tones during a promotional segment for the start of the 2023-2024 NBA season.  The Bureau found that ESPN aired a simulated, two second EAS tone during the NBA promotional segment which aired six times in October 2023 on the ESPN and ESPN 2 cable channels.  The Bureau upwardly adjusted the base forfeiture amount of $48,000 ($8,000 per violation) to $146,976 based on several factors including ESPN’s sizeable nationwide audience reach, ESPN’s history of airing false EAS tones, the fact that ESPN aired the simulated EAS tones for its economic gain, and because airing simulated EAS tones desensitizes the public to the potential importance of warning tones.  The Bureau also noted that ESPN’s production team was aware that it was airing simulated EAS tones, and that the network did not inform the FCC that it did so until it responded to the FCC’s inquiry.
• A Florida federal court barred the Florida state government from taking any further actions, including criminal prosecution, against broadcast stations running political advertisements supporting a proposed amendment to the Florida Constitution to protect abortion rights.  As we discussed in last week’s update, the Florida Department of Health sent a cease and desist letter to stations running those political ads threatening stations with criminal prosecution for airing allegedly false information regarding the availability of medical treatment in Florida for pregnancy complications.  The Court found that the state could not indirectly censor the ads through threats of criminal prosecution because the ads were political speech protected by the First Amendment.
• Reply comments were due in response to the FCC’s July Notice of Proposed Rulemaking proposing that broadcasters and cable operators disclose, both on the air and in their Online Public Inspection Files, the use of AI-generated content in political advertisements.  We discussed this proceeding here, and noted some of the initial comments filed last month here.  In their reply comments, several broadcasters (see here, here, here, and here), broadcast TV networks (ABC, NBC, CBS, and Fox), and industry groups (see here and here) restated their objections to the FCC’s proposal including the disproportionate burden broadcasters and cable providers would bear under the proposed rule, the FCC’s lack of authority to regulate AI use in political ads, and the First Amendment issues raised by the proposed rule.  Even supporters of the FCC’s proposal (see here and here) urge a narrowing of the FCC’s proposed definition of the “deep fakes” which require disclosure, but they disagree with most of the other challenges to the proposal.
• The FTC adopted a new “Click to Cancel Rule,” which amends its existing “Negative Option Rule” by requiring sellers to allow consumers to easily cancel their enrollments in subscriptions and services with “negative options.”  As we discussed here, “negative options” are used in marketing and sales in a variety of forms (such as automatic subscription renewals) where a seller of a product or service interprets a customer’s silence, or failure to take an affirmative action, as acceptance of an offer to sell and charge for those products, or to continue to provide those products beyond an initial purchase.  The amended rule prohibits sellers from: (1) misrepresenting the terms and conditions of goods or services with a negative option; (2) failing to clearly disclose material terms for goods or services with a negative option before charging a consumer; (3) failing to obtain a consumer’s consent to the negative option before charging the consumer; and (4) failing to provide consumers with an easy way to cancel the product or service.  The new rule applies to the use of negative options in any media, including, electronic communications, telephone, print, and in-person transactions, and sellers can face civil penalties for violating the new rule.  The FTC released a fact sheet and blog post summarizing the new requirements.  The rule will become effective 180 days after its publication in the Federal Register, but some provisions (such as the new misrepresentation provision) will become effective 60 days after its publication.
• The FCC published in the Federal Register a notice announcing that November 18 is the effective date of its February Report and Order permitting the use of a new type of wireless microphone system called “Wireless Multi-Channel Audio System” (WMAS) on a licensed basis in frequency bands where wireless microphones already are currently authorized, including the TV bands (VHF and UHF).  The FCC’s goal in permitting WMAS is to enhance the spectral efficiency of wireless microphone use without altering the spectrum rights or expectations of existing users, including broadcast licensees.
• The FCC released a Public Notice announcing the tentative selectees from 93 groups of mutually exclusive LPFM construction permit applications (applications that cannot all be granted under the FCC’s technical rules) which were filed during the December 2023 LPFM filing window.  The FCC evaluated the LPFM applications using a points system and the tentative selectee of each mutually exclusive (MX) group (listed in bold here) was either a single applicant with the highest point total or multiple applicants tied for the highest point total from each MX group.  The Public Notice states that: (1) petitions to deny against the tentative selectee selections are due November 15; (2) tentative selectees tied under the point system analysis have until December 15 to submit voluntary time-sharing proposals before the FCC will impose involuntary time-sharing arrangements on such applicants; and (3) MX applicants will also have until December 15 to file major technical amendments to their applications to resolve their mutual exclusivities.  The Notice provides guidance on filing voluntary time-share proposals and major technical amendments, and identifies the full power FM stations and FM translators affected by the LPFM applicants’ second-adjacent channel waiver requests (here).
• The Bureau granted three noncommercial FM station construction permit applications filed by the same applicant over an objection claiming that the applicant failed to disclose that two of its directors held attributable interests in multiple LPFM stations, which was prohibited by the FCC’s LPFM ownership limits.  The Bureau found that since the directors resigned from their positions in the LPFM stations before the applications were filed, those interests did not need to be disclosed in the applications as attributable. 
• The Bureau proposed a $20,000 fine against a Hawaii TV station for failing to timely upload to its OPIF the majority of its Quarterly Issues/Programs Lists from its most recent license period.  The Bureau found that the station uploaded 10 lists more than 1 year late, 11 lists between 1 month and 1 year late, and 2 lists between 1 day and 1 month late. Given the extent of the station’s violations, the Bureau upwardly adjusted its proposed fine from the base amount of $10,000. 
• The Bureau also granted a petition to modify the FM Table of Allotments by allotting Channel 284A at Huntley, Montana, as the community’s first local service.  The Bureau also modified the license of KYSX, Billings, Montana to operate on Channel 286A in lieu of Channel 283C1 to accommodate the new Huntley allotment.  The Huntley channel will be available for application during a future FM filing window which, as noted below, may not occur for some time.

On our Broadcast Law Blog, we noted the Media Bureau’s announcement last week of the opening of a filing window on December 4 for new noncommercial TV stations in Alabama, Alaska, California, Idaho, Iowa, New Mexico, Oregon, Texas, and Virginia, and discussed why there have been no recent windows for new commercial stations.  The FCC’s Congressional authority to conduct auctions expired over a year ago, meaning that the FCC currently cannot auction any spectrum for any commercial AM, FM, TV, and translator stations.  No such windows are likely until the Congressional impasse over a renewal of auction authority is resolved.