FCC Fines Radio Broadcast Companies for Selling Airtime

4/13. The Federal Communications Commission (FCC) released a set of four orders that adopt consent decrees negotiated by the FCC and broadcast companies. The FCC fined four radio broadcast companies for engaging in commercial transactions in which radio broadcasters exchanged the broadcast of music recordings for consideration from record companies.

These orders adopting consent decrees require the payment of fines (that is, impose "voluntary contributions") of $3,000,000 on CBS, $2,000,000 on Citadel Broadcasting, $3,500,000 on Clear Channel Communications, and $4,000,000 on Entercom Communications.

In each of these orders adopting consent decrees the FCC agrees to terminate its investigation. In return, the broadcast companies agreed that it "takes seriously its responsibilities as a licensee", and agreed to implement various business practices with respect to sponsorship identification.

Robert McDowell wrote in his statement accompanying these orders that the FCC "takes seriously its responsibility to enforce the law governing sponsorship identification".

Chairman Kevin Martin wrote in his statement that the FCC "will not tolerate non-compliance with its rules".

Commissioner Jonathan Adelstein asserted in his statement that this "ends an era of laissez faire pay-for-play".

Commissioner Michael Copps used this occasion to rail against both the business practices of broadcast coompanies, and concentration of ownership of broadcasters. He wrote that "Musical genius in this country runs deep and wide. But, by and large, our airwaves do not reflect it. Concentration of radio ownership has ushered in a new and especially challenging age of payola."

See, CBS Radio order [19 pages in PDF], Citadel Broadcasting order [19 pages in PDF], Clear Channel Communications order [19 pages in PDF], and Entercom Communications order [PDF].

People and Appointments

4/13. Federal Communications Commission (FCC) Commissioner Michael Copps announced in a release that John Branscome, "who has been detailed to his office to assist in spectrum and international issues, will be returning to be Chief of the FCC’s Spectrum and Competition Policy Division".

Copyright Office and USPTO to Hold Roundtable on Draft WIPO Broadcast Treaty

4/12. The Copyright Office (CO) and the U.S. Patent and Trademark Office (USPTO) announced that they will hold a public roundtable discussion of the World Intellectual Property Organization's (WIPO) Standing Committee on Copyright and Related Rights (SCCR) proposed draft Treaty on the Protection of the Rights of Broadcasting Organizations.

This event will be held on Wednesday, May 9, 2007, at 2:00 PM, at the Library of Congress. The deadline to request to attend or participate is 5:00 PM on Friday, May 4, 2007. See, notice in the Federal Register, April 12, 2007, Vol. 72, No. 70, at Pages 18493-18494.

The latest draft of this proposed treaty is contained in the WIPO's March 8, 2007, paper [MS Word] titled "Draft Non-paper on the WIPO Treaty on the Protection of Broadcasting Organizations".

The treaty would require member nations to create a new class of intellectual property rights for "broadcasting organizations" in their broadcast signals, and other things. It would require nations to create several exclusive rights in broadcast signals (with a 20 year term of protection), to create certain unspecified rights prior to broadcast, to create bans on circumvention efforts, and to ban the making or importing of devices that circumvent.

The rights would in many ways be analogous to copyright. However, there is no requirement that the entity obtaining the rights create or license the works that are broadcast. Moreover, there is no registration requirement.

See, full story.

FTC Issues Report on Marketing of Violent Video Games, Movies and Music to Children

4/12. The Federal Trade Commission (FTC) released a report [136 pages in PDF] titled "Marketing Violent Entertainment to Children: A Fifth Follow-up Review of Industry Practices in the Motion Picture, Music Recording & Electronic Game Industries" . See also, FTC release.

The report contains numerous recommendations to be implemented by voluntary private sector initiatives, but no recommendations for legislation.

With respect to video games, the FTC report finds that "internal marketing documents and ad placements for selected M-rated games showed that the video game companies contacted for this Report did not specifically target advertising for those games to children under 17. In addition, advertising on television programs popular with teens appears to be diminishing."

However, the FTC report finds many examples of "Internet advertising that would appear to violate the industry’s standard of not placing ads for M-rated games on websites with an under-17 audience of at least 45%. Sixteen of the twenty M-rated games selected by the Commission ran ads on sites that appear to equal or exceed the 45% standard."

It also found that "Video game retailers substantially improved their enforcement of policies prohibiting children under 17 from purchasing M-rated games without parental permission. Forty-two percent of the children in the Commission’s mystery shopper survey were able to purchase M-rated games, a statistically significant improvement from the 69% able to make the purchases in the 2003 survey."

The report also states that "Mobile phone games are a growing segment of the video game market and pose several challenges for the industry’s self-regulatory system. Mobile phone game developers often do not seek ESRB ratings; they do not sell their products through traditional retail channels, instead licensing their products directly to wireless carriers.

For the movie industry, the FTC report states that a "review of internal marketing documents for selected R-rated films showed that the studios did not specifically target advertising for those films at children under 17. The industry, however, continues to advertise R-rated movies on television shows popular with children under age 17, and some advertising violated the standard adopted by several studios that prohibits the placement of advertisements for R-rated films in media with an under-17 audience share over 35%."

The report also states that the "examination of the Internet advertising for twenty R-rated movies revealed that 90% were advertised on websites where under-17 visitors constitute one third or more of the audience."

Finally, for the music industry, the FTC report states that its "review of internal marketing documents and ad placements for explicit-content labeled music showed that the major record labels did not specifically target advertising for those albums to children under 17. There were few ads in print media popular with teens, but the music industry continues to advertise on cable TV shows with young teen audiences of 40% or more. In addition, the industry advertised music with a parental advisory label on websites reaching a substantial percentage of children under 17."

People and Appointments

4/12. The Senate Judiciary Committee approved the nomination of Halil Suleyman Ozerden to be a Judge of the U.S. District Court for the Southern District of Mississippi.

More News

4/12. The Government Accountability Office (GAO) released a report [64 pages in PDF] titled "Taxpayer Service: State Experiences Indicate IRS Would Face Challenges Developing an Internet Filing System with Net Benefits". This report states that "Some states and countries allow taxpayers to prepare and file tax returns on their Internet Web sites at no charge, an option not available to federal taxpayers. Such a service might mitigate the concerns taxpayers have about current electronic filing options, which require filing through a third party and may involve fees. Increased electronic filing would reduce IRS’s paper processing costs, reduce transcription errors, and speed up refunds." It adds however, that "the idea is controversial. IRS already has a Free File program which offers free return preparation and filing by private companies for some people via IRS’s Web site. Some are opposed to IRS competing with tax preparation software companies."

4/12. Rep. Tom Davis (R-VA), the ranking Republican on the House Government Oversight and Reform Committee, released a report [3 pages in PDF] titled "Seventh Report Card on Computer Security at Federal Departments and Agencies". It give an overall grade of C-. It awards the Department of Homeland Security (DHS) a grade of D and the Department of Defense a grade of F. See also, Rep. Davis' release.

People and Appointments

4/11. The Senate confirmed James Clapper to be under Secretary of Defense for Intelligence.

4/11. Edward Fox was named Assistant Secretary for Public Affairs at the Department of Homeland Security (DHS). He previously worked for the U.S. Agency for International Development (USAID). See, DHS release.

4/11. The U.S. Chamber of Commerce promoted Ann Beauchesne to head its Homeland Security Division. See, Chamber release.

Go to News from April 6-10, 2007.