Our mid-year update to the Enforcment Action Database shows absolutely no change in the FCC’s enforcement protocol regarding unlicensed broadcasting. Although the agency is running ahead of its enforcement action pace last year (70 to date, compared to 125 for all of 2015), it’s well off the highs seen late last decade. Fewer than three dozen unlicensed radio stations in just six states have had some form of contact with the FCC in 2016.
So far, Florida is the hottest spot for FCC activity with 25 actions to date; New Jersey and New York respectively round out the top three. That’s a surprising drop for the Empire State, which has not only topped the list for the last four years but whose Congressfolk and licensed broadcast constituency (along with their colleagues in New Jersey) have been clamoring for more anti-pirate policing.
Some of this political pressure may have been a factor in three monetary forfeitures issued to New Jersey pirates last month. Industry trades made great hay out of the $40,000 in total penalties — but all of these stem from cases that originated last year. That said, the FCC handed out just a single forfeiture in 2015, but perennial collection difficulties remain. Continue reading “Paper Tiger Teams MIA…So Far”
Removing the Public From Public Files
The FCC is currently considering a proposed rulemaking to radically change the content of the public files maintained by broadcast stations. Within the last few years, the agency has deliberated and approved changes in the way public files must be kept: everything’s moving online now, which will ostensibly make both maintaining and browsing public files easier on broadcasters and the viewing/listening public.
The migration of public files online is happening gradually; television stations went first and now radio stations are following on. Radio stations in the top 50 markets must make their public files available online by no later than June 24th. Public files contain a plethora of information about any given station; for commercial broadcasters, this includes station engineering specifications, hiring practices, political/public-interest programming, and correspondence with the public directly. Continue reading “Removing the Public From Public Files”
HD Radio: "We're Still Here"
After its lackluster appearance at the NAB Show earlier this year, HD Radio‘s new owners, DTS Inc., are trying mightily to demonstrate that the technology remains a viable future for broadcast radio. In May, DTS announced its first-quarter financials, representing the first full quarter of its ownership of iBiquity. As expected, the acquisition had a positive effect on DTS’ bottom line, no doubt from the revenue stream involving licensing HD receivers in cars (for which the company gets paid as much as $12 per unit).
Presently, however, HD Radio is found in just 37% of all new vehicles sold in the United States — a far cry from widespread penetration, but more than enough to move the needle in DTS’ ledgers. According to a company conference call earlier this year, the acquisition of HD Radio is part of a pivot by DTS away from developing/acquiring audio enhancement systems for home entertainment technologies (which are on the decline) and toward the mobile and portable device spaces (which are growing mightily). By the end of 2016, DTS expects its automotive division (which includes HD Radio) to account for some 40% of all revenues. Continue reading “HD Radio: "We're Still Here"”
iHeartMedia Dodges Bankruptcy, Option Remains
iHeartMedia’s lawyers are probably very happy to see May in their rearview mirrors, after dodging a bullet in a Texas courtroom last week. A friendly judge barred the company’s creditors from seeking notices of default on some $6 billion of iHeart’s $21 billion in corporate debt, racked up primarily from pillaging the radio industry over the last 20 years.
iHeart’s creditors were attempting to call out the company for constructing a shell game in an attempt to keep its debt from crushing it. They noticed last year that the company had begun transferring hundreds of millions of dollars in assets to two “independent” subsidiaries named Broader Media and CC Finco. In simple terms, having already borrowed tens of billions against hundreds of stations, thousands of billboards, and countless other media ventures, iHeart moved some of those assets to “new” corporate parents, thereby creating “new” value against which to borrow even more money. Even better, this shuffle protected those assets against existing debt claims. Continue reading “iHeartMedia Dodges Bankruptcy, Option Remains”
NAB Show Leaves Radio in Shadows
According to reportbacks from the just-concluded NAB Show in Las Vegas, it was a lopsided affair in favor of the future of television. And why not: broadcasters stand to make billions over the next year selling off their spectrum, and those who stay on the air will be rolling out a new digital television standard with new content and datacasting potential.
Meanwhile, the radio industry’s been rocked back on its heels by a slew of bad fiscal news. iHeartMedia, for now, has managed to stave off several billion dollars’ worth of its debt being called in early by angry bond-holders, but the company’s effectively now engaged in increasingly nasty legal maneuvering to decide its debt end-game sooner rather than later. #2 conglomerate Cumulus Media’s still squeezing its broadcast properties also in hopes of keeping bankruptcy at bay. Emmis faces delisting by NASDAQ in early June. Even the relatively fiscally-sound CBS has announced its intent to spin off its entire radio division into a separate company, selling it also seems to be an open option. Continue reading “NAB Show Leaves Radio in Shadows”
When Will They Learn: Several Radio Stations + One Network Hijacked
Listeners to at least three radio stations and one (unidentified) radio network got quite an earful last week when their programming was hijacked by an unknown hacker. The intruder, who used a search engine of internet-connected devices to find unprotected audio transfer equipment in radio stations/networks’ airchains, was able to compromise several of them because the targeted stations/networks either never changed the equipment’s default password, or they used a weak password that was easily bypassed.
The hacked stations all broadcast episodes of a comedy podcast devoted to furries, a subculture of people who like to dress up (and oftentimes, have sex) in animal costumery. “FurCast” is defintiely not-safe-for-work material, and the stations spent more than an hour airing them. According to the podcast’s producers, they noted a spike of “hundreds of connections” in podcast-download traffic last week, all of which were coming from hacked radio stations/networks, and were able to cut off the OTA simulcasts by changing the IP address from which podcast downloads originate. Continue reading “When Will They Learn: Several Radio Stations + One Network Hijacked”
Congress to Target Pirate Advertisers (and Others?)
All five FCC Commissioners spent more than three hours on Capitol Hill last week being questioned by the House Energy and Commerce Committee during an “oversight hearing,” which is a fancy way of saying “let members of Congress score political points by grandstanding on the FCC-related issues they care about the most.” While the hearing itself was mostly dominated by subjects such as the agency’s upcoming spectrum auctions and proposals to detach set-top TV boxes from the grip of cable service providers, two Congressfolk raised the issue of pirate radio with the Commissioners.
First was Rep. Frank Pallone (D-NJ), who’s been a very vocal supporter of increased enforcement efforts against pirate stations in the New York City metropolitan area. He announced that he plans to draft legislation to asssist in these efforts and lobbed Commissioner Michael O’Rielly a softball question on the state of pirate radio enforcement: in effect, “what should this bill include?”
O’Rielly said that “getting at the money part” of pirate radio was paramount. Many entities advertise on pirate stations; he mentioned concert and club promoters and political campaigns (?) in particular. However, O’Rielly also noted that he did not want such legislation to penalize those who may “inadvertently” assist unlicensed broadcast operations, such as landlords who may not know they’re renting space to a pirate station. Continue reading “Congress to Target Pirate Advertisers (and Others?)”
"The Documents Are Not Available"
On Thursday, February 25th — one day before the Radio Preservation Task Force‘s inaugural conference — I traveled to Washington, D.C. to meet up with friend and colleague, Dr. Christopher Terry, who was also attending the conference. Like me, Dr. Terry is a media law and policy scholar who hails from Wisconsin. And also like me, Dr. Terry has been watching with interest the FCC’s foray into definining journalism on the public airwaves.
In his classes, Dr. Terry uses the Commission’s $44,000 fine against WLS-AM for airing newscasts produced by Workers Independent News as a teaching point to explore the FCC’s regulation of sponsored content. In prior posts, I’ve explained how Workers Independent News purchases airtime on selected commercial radio stations to air its newscasts and features. The FCC case stemmed from WLS-AM’s failure to run the required disclaimer that WIN had paid for its own airtime in a small fraction of broadcasts.
But when the FCC decided to sock WLS with such a stiff fine, it made WIN’s legitimacy as a news organization key to its rationale. Unprecedented in the history of U.S. broadcast regulation, the FCC effectively declared Workers Independent News to not be news, thereby justifying such a large forefiture.
Shortly after the FCC’s 2014 decision, I filed a Freedom of Information Act request with the agency for all documents related to its decisionmaking process in the WLS case. Last November, FCC attorneys reported back that they had identified several thousand pages of material…but released less than 90 redacted pages. Among them was the original complaint that kicked off the FCC’s inquiry, which defamed Workers Independent News as an activist organization masquerading as a news outlet. It was on this allegation that the FCC seemed to rest its case. Continue reading “"The Documents Are Not Available"”
iHeartMedia's Debt Dance Intensifies
The nation’s #1 radio broadcast conglomerate stands another step closer to defaulting on nearly $21 billion of IOUs racked up during its consolidation and conglomeration spree of the last twenty years. For those just tuning in, iHeartMedia owes nearly $1.4 billion in debt payments between now and 2018, with nearly $200 million of that due this year.
The company announced a curious plan in late 2015 to ask some of its debt-holders to swap existing debt for stock, the idea being to try and retire the pressing debt first and keep the fiscal ship afloat. In practice, iHeart began shifting some of its assets into a subsidiary named Broader Media, which is effectively a subsidiary holding company within iHeart itself. Those who agreed to swap their debt in iHeart would get paid back in Broader Media equity. Continue reading “iHeartMedia's Debt Dance Intensifies”
Paper Tiger Warns: Don't Do Business With Pirates
With unlicensed broadcast operations taking place with impunity in several of the nation’s largest media markets, and facing near-emasculation in the field, the Federal Communications Commission is taking a new tack to try and ameliorate the “pirate problem.”
A letter co-signed by all five Commissioners was mailed out last week to several local government and industry trade groups, including the U.S. Conference of Mayors, National Association of Chiefs of Police, Association of National Advertisers, and National Association of Realtors, among several others.
This letter seeks to inform the recipients about who pirate stations are and asks that they avoid doing business with them. The letter claims that unlicensed broadcasters “can cause harmful interference to licensed radio broadcasters serving their communities, thereby starving stations of their ability to reach their listening audiences and obtain necessary advertising revenues.” It also claims that pirate stations have the potential to interfere with public-safety radio systems.
The tone is slightly admonishing: the recipients are informed that they “may be unknowingly or unintentionally providing aid to pirate stations. . .including buying advertising on such stations to housing the physical stations themselves.” The Commissioners hint that this may expose them to “potential FCC enforcement or other legal actions,” and cautions that being in business with a pirate station may also “sully the reputations of those businesses with the licensed broadcast community and other professional organizations” – sort of a “Scarlet P” approach. Continue reading “Paper Tiger Warns: Don't Do Business With Pirates”