U.S. Sen. Stabenow, Congressman Upton to Speak at Annual Business Meeting – Register for Free

U.S. Sen. Stabenow, Congressman Upton will Provide Federal Updates at Annual Business Meeting

Rob Elhenicky will Give Insight on the Primary’s
Impact on Political Advertising Budgets

The Annual Business Meeting of the Michigan Association of Broadcasters will be hosted on Zoom this year. Join us to gain valuable insight into Congressional efforts toward economic recovery and the political advertising landscape following the Primary Elections.

MAB Annual Business Meeting
Tuesday, August 11, 2020 at 10:00 a.m.
with Special Guest:
Congressman Fred Upton (R-6)
Register to Attend (Free)

 

Sen. Debbie Stabenow (D-MI)
As Ranking Member of the Senate Agriculture Committee, and as a senior member of the Senate Finance Committee, Energy Committee, and Budget Committee, she has a powerful and unique role to play in shaping our nation’s health care, manufacturing, energy, and agriculture policies.

 

 

Congressman Fred Upton (R-6)
Congressman Upton is the past Chairman of the House Energy and Commerce Committee and the ranking member of the energy subcommittee. He will give us the latest information on federal funding for current and potential future economic stimulus bills as well as plans to get the economy back on a more even keel.

 

 

Rob Elhenicky, Partner, Kelley Cawthorne
MAB Government Relations Consultant
Rob will give a brief report on the elections and political advertising budgets. The COVID-19 pandemic has limited candidates’ opportunities to connect with voters person-to-person with town hall gatherings and door-to-door canvassing. Radio and television is the most personal way to influence the electorate.

 

The MAB’s Annual Business Meeting is FREE to attend but you must register!

Click Here to Register Today




Congressman Moolenaar Adds Name to LRFA

Congressman John Moolenaar (R-4)

U.S. Rep. John Moolenaar (R-4) on Wednesday (7/30) became the sixth Michigan Congressman to cosponsor H.Con.Res 20, known as the Local Radio Freedom Act (LRFA).

Congressmen Moolenaar joins Reps. Debbie Dingell (D-12), Fred Upton (R-6), Tim Walberg (R-7), Paul Mitchell (R-10) and Bill Huizenga (R-2) as one of the 225 bipartisan LRFA cosponsors.

The resolution states that Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings.

MAB members launched a letter writing campaign earlier this year to inform the our Congressional delegation about the devastating effects a performance royalty would be to local broadcasters.

They explained how broadcasters remain on duty serving their community long after other media have given up. They spoke about the value of the lifesaving public safety information broadcasters provide in times of emergencies and how it cost stations significantly to serve as trusted leaders in their community.

Thank you Congressman Moolenaar for your support for local broadcasting and thank you to all MAB members from the his distract who took the time to contact him to share how a performance royalty would negatively impact their abilities to serve their local communities.

Moolenaar’s signature means only three more signatures to reach a majority and prove there would not be enough votes in Congress to pass a performance royalty bill.




House Members Seek to Expanded COVID-19 Aid for Local Broadcasters

A bipartisan congressional duo has called on Congress to take care of broadcasters in the next COVID-19 aid package by allowing individual stations that are part of larger groups to qualify as local businesses eligible for the money, according to a report in InsideRadio.

Reps. Brendan Boyle (D-Pa.) and Tom Emmer (R-Minn.), co-chairs of the Congressional Broadcasters Caucus, sent a letter to House leaders asking that broadcasters get expanded eligibility to the Payroll Protection Program (PPP) COVID-19 small business aid.

“Ensuring that small broadcasters, including those that may be owned by station groups, have access to the Paycheck Protection Program will help them continue to serve their communities and provide lifeline information,” said National Association of Broadcasters President Gordon Smith. “NAB and America’s local radio and TV stations thank Reps. Emmer and Boyle for fighting to help broadcasters remain on the air and free to their local audiences.”




House Dems Match GOP In Funds Raised For Period, Far Behind In Cash on Hand

State House Democrats remain woefully behind their Republican counterparts when it comes to cash on hand heading into the general election but kept fundraising close in the second quarter of 2020, according to a report from Gongwer.

The Michigan House Democratic Fund raised $788,692 and The House Republican Campaign Committee raised $794,685 between April 21 and July 20, according to campaign finance reports due at 5 p.m. Monday. For the year, Republicans have raised $1.8 million compared to the Democrats’ $1.4 million.

While the current figures make the financial situations appear close, Republicans have $4.6 million on hand while Democrats have $1.6 million banked.

Democrats, though, have outspent Republicans for the quarter and for the year. Republicans spent just $75,759 this quarter and $208,648 for the year. Democrats reported spending $295,053 for the quarter and $486,992 for the year.

As for the State Senate, there Republicans brought in more than four times as much as the Democrats during the second quarter of the year, based on state campaign finance reports due Monday.

For the second quarter covering the period between April 21 and July 20, the Senate Republican Campaign Committee reported raising $457,965. Following expenditures totaling $57,145 the PAC reported having more than $2.195 million in cash on hand.

Republicans’ second quarter fundraising was up from the $331,796 raised during the first quarter.

The Senate Democratic Fund reported raising $101,751 during the second quarter. After expenditures of $53,841, the PAC had cash on hand totaling $449,608.

 




A Deeper Look at the FCC’s Proposal to Eliminate Program Duplication Rules for AM But Not FM Stations – Looking to All Digital AM?

David Oxenford - Color

David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

FCC rules currently prohibit radio stations in the same service (AM or FM) that have over 50% overlap of their principal community contours (the 70 dBu for FM stations and the 5 mV/m contour for AM stations) from duplicating more than 25 per cent of the total hours in their average programming week. In preparation for the FCC’s open meeting on August 6, the FCC released its draft order proposing to eliminate that rule as to AM stations (as we wrote on Friday 7/17). As the draft order looks to eliminate the rule only for AM stations while retaining that rule for FM stations, it is worth taking a deeper look at this tentative decision particularly as one of its implications is that the FCC may well be allowing AM stations to transition to all-digital operations.

The draft decision provides two reasons for eliminating the rule for AM stations. First, it suggests that the challenging economic and competitive status of AM radio justifies the decision to allow duplication by AM stations that operate in the same area. Keeping a station operational and providing some service is preferred over letting that station go silent. The economic condition of the AM band was determined to alone be justification for the decision to permit duplication. But the FCC provided a second reason – one that suggests that the FCC is seriously considering the proposal (about which we wrote here and here) to allow for all-digital AM stations. In the draft order, the FCC says that allowing AM program duplication would provide an opportunity for an AM station to go all-digital while still broadcasting its programming on another AM station in the current analog format – allowing listeners to hear the station even if they do not yet have a digital AM receiver.

As to FM, the draft decision says that the economics of FM are such that there is not the same need to allow program duplication. Permitting duplication, in the FCC’s eyes, would limit competition and format diversity on the FM band. The decision does note that, in case of an economically distressed station, the FCC would consider a waiver to allow duplication if the choice is between duplicated service and no service at all.

The draft order will be considered at the FCC’s August 6 meeting. Watch for the FCC’s final action on this case on or before that date.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your MAB membership. 




Michigan Casinos to Open, New Executive Order on Restaurant and Bars

Michigan Department of Health and Human Services (MDHHS) Director Robert Gordon issued an Emergency Order July 29 reinforcing Executive Orders 2020-160 and 2020-161 and allowing for civil fines of up to $1,000 and referral to licensing agencies for violations.

This new order rescinds a June 5 order referencing earlier versions of the governor’s orders.

“Michigan’s efforts to suppress the virus have reduced Michigan’s infection rate from among the highest in the country to a rate similar to the national average,” Gordon said. “However, case counts have recently trended upward, from fewer than 100 cases per day in mid-June, to between 500 and 1,000 per day in recent days. We must remain vigilant in our response to this ongoing threat and take all appropriate measures to reduce its impact.”

The Emergency Order requires that everyone must comply with the procedures and restrictions outlined in the following Executive Orders:

    • Executive Order 2020-160, which limits statewide indoor gatherings to 10 people or less and, across most of the state, limits outdoor gatherings to 100. (The outdoor gathering limits will remain at 250 in Regions 6 and 8.) It also orders that bars in every region, including those in Regions 6 and 8, must close for indoor service if they earn more than 70 percent of their gross receipts from sales of alcoholic beverages.
    • Executive Order 2020-161, which orders businesses to develop COVID-19 preparedness and response plans, designate supervisors to implement and monitor those plans, and train employees on workplace infection control and use of personal protective equipment.

Under the governor’s orders, Detroit casinos will also be allowed to open on Aug. 5, but their occupancy will be limited to 15 percent capacity. Casinos must also conduct a daily entry screening protocol for customers and employees and temperature screenings. Casinos must require patrons to wear a face covering, except while eating or drinking or for identification purposes.

Any violations of this Emergency Order by a person regulated by a licensing agency must be referred to the relevant licensing agency for a determination on whether to pursue additional enforcement action on a case-by-case basis.

Pursuant to MCL 333.2235(1), local health departments are authorized to carry out and enforce the terms of this order. Law enforcement officers may enforce this order and are authorized to investigate potential violations. They may coordinate as necessary with the local health department and enforce this order within their jurisdiction.

Law enforcement officers, as defined in the Michigan Commission on Law Enforcement Standards Act, 1965 Public Act 203, MCL 28.602(f), are deemed to be “department representatives” for purposes of enforcing this order and are specifically authorized to investigate potential violations of this order. They may coordinate as necessary with the appropriate regulatory entity and enforce this order within their jurisdiction.

Criminal penalties for violation of the Governor’s Executive Orders will remain an option for prosecutors. The Emergency Order is issued under MCL 333.2253(1).

Information around this outbreak is changing rapidly. The latest information is available at Michigan.gov/Coronavirus and CDC.gov/Coronavirus.




Sen. Gary Peters Agrees to 2 Public Television Debates with Challenger John James

Left: Republican U.S. Senate Candidate John James. Right: Incumbent Democrat U.S. Sen. Gary Peters.

Incumbent U.S. Sen. Gary Peters (D-Bloomfield Twp.) agreed on Friday (7/24) to two televised debates with Republican Senate hopeful John James to be hosted by WGVU Public Media and Detroit Public Television, accoring to a report on MLive.

Gongwer reported earlier in the week that James called on incumbent Peters (D-Bloomfield Twp.) to participate in a total of four televised debates leading up to the November General Election, one in Detroit, one in Grand Rapids, one on the Fox News Channel and one on CNN.

Peters’ campaign said participating in two debates follows recent precedent for Senate races in Michigan.

James wanted six televised debates in his 2018 challenge to U.S. Sen. Debbie Stabenow (D-Lansing) and she agreed to two, with one occurring on public television and one at the Detroit Economic Club.

Michigan has not seen a debate on commercial television since 1994 and has had a couple election cycles with no debates at all, Gongwer reports. When there have been debates – in 1996, 2000, 2002, 2006, 2008 and 2018 – there have generally been two. One televised on Michigan public television stations and another not televised at the Detroit Economic Club.

There also were no debates in 2012 when U.S. Sen. Debbie Stabenow sought her third term. That year, Republican challenger Peter Hoekstra insisted they debate on commercial television, Stabenow refused and Hoekstra declined the two debates (public television and the Economic Club) to which she had proposed.

Public opinion polls show Peters with an edge in the race and presumptive Democratic presidential nominee Joe Biden well ahead of President Donald Trump in Michigan, Gongwer reports.

Meanwhile, the candidates filed their pre-primary campaign finance reports, reflecting activity from July 1-15. James outraised Peters, $963,069 to $794,079 during that period, the fifth consecutive reporting period in which James has pulled in more funding than Peters. For the same period, Peters spent $1.2 million to $1 million for James. As of July 15, Peters reported $11.6 million cash on hand to $9.2 million for James.




Using Music in Podcasts – Talk to the Copyright Holders – Why You Can’t Rely on Your ASCAP, BMI, SESAC and SoundExchange Licenses

David Oxenford - Color

David Oxenford

By: David Oxenford, Wilkinson Barker Knauer LLP

Our friends at Edison Research recently released a study on music discovery highlighting the ways in which people discover new music.  Among their findings was that broadcast radio, YouTube and streaming services were among the largest sources for that discovery.  That report caused one radio trade publication to suggest that podcasts, which ranked relatively low among the places where new music is discovered, might have opportunities to grow there.  What that suggestion overlooks is one of the biggest reasons that music podcasts have not taken off – rights issues.  There still is no easy way to clear the rights to major label music – so most podcasts are limited to spoken word featuring limited, directly licensed music.

That comment made us think that we should re-run an article from earlier this year, that explained music rights in podcasts.  That article was prompted by the settlement between the Radio Music License Committee and BMI over music royalties for broadcasting.  While a press release about the settlement said that the BMI license includes the use of music in podcasts, we pointed out that radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders.  They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining all of the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.

So why doesn’t the license from BMI fully cover the use of music in a podcast?  As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?

The public performance right is simply that – the right to perform a copyrighted work to the public (those beyond your circle of family and friends). Making a copy of a copyrighted work is a different right, as is the distribution of that recording. Both are triggered when the podcast is downloaded onto a phone or other digital device – the manner in which podcasts were initially made available to the public. As we have written before (see, for instance, here and here), by convention (and now by the provisions of the Music Modernization Act), making available music for on-demand streaming (where a listener can choose a particular song, or a set of songs that will play in the same order all the time) has come to be considered to involve the rights of reproduction and distribution even if a download does not occur (the “mechanical royalties” covered by the MMA – see our articles here and here on the MMA).  Thus, as podcasts – even when streamed – are made available on demand, the rights to the reproduction and distribution of the words and music of a song must be obtained.  These rights are obtained not from any of the organizations mentioned above, but usually for a production like a podcast, directly from the copyright holder – usually the publishing company with which the songwriter is affiliated (or the publishing companies in some cases where multiple songwriters have co-written a song and reserved rights to approve uses of the song in productions like podcasts – see our article here).

The right to make a derivative work is another right of the copyright holder (see my article here on derivative works). A copyright owner must give his or her permission before their work is modified in some way. While that can involve the changing of lyrics to a song, it can also involve associating that song in some permanent way with other content. In the video world, that is referred to as a synch right – where the audio is “synched” to the video creating a single audiovisual work. Synch rights are not specifically defined by the Copyright Act. They have traditionally referred to audiovisual productions, but the same concept is at play in the creation of a podcast, where the music is synched in a permanent fashion to other audio content to create the podcast. In a recent complaint by Universal Music against a podcaster, Universal complains that the podcaster violated not just the public performance rights of the copyright holders, but also their rights to authorize the reproduction, distribution, and the derivative works made from their copyrighted material (see our article here on that suit).

In addition, even the performance rights cleared through an license from ASCAP, BMI or one of the other performing rights organizations only cover the underlying musical work or musical composition – the words and music in the song.  There are an entirely different set of rights necessary to use the recording of a song from a band or singer in a podcast.  The rights to the “sound recording” or “master recording” also need to be obtained for any on-demand use of music.  SoundExchange covers digital public performances of the sound recording, but only when provided in a noninteractive setting where the user cannot determine what song will be heard next (see our articles herehere and here for more on the difference between interactive and noninteractive digital uses).  The rights to use the master recording in a podcast, as the podcast is available on demand, need to come from the copyright holder of that master – usually the record label (but sometimes the artist) for most popular music.

This is all a long way of saying that podcasters need to get permission for the use of music in their productions directly from the copyright owners – both for the musical composition and the sound recording. Many podcasters have commissioned original works where they license from local artists the recordings of music written and performed by those artists. Some online services have recently begun to develop, where they clear all the rights to music and license that music to podcasters for set fees. But, thus far, most of that music is not major label releases, but instead independent music.  There are some indications that might change in the near term. But right now, for major label releases, you generally need to get permission directly from the copyright holders to use their music in a podcast. The bottom line – don’t use music in podcasts without getting permission directly from the copyright holders.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).

There are no additional costs for the call; the advice is free as part of your MAB membership. 




Advertising Tax Effectively Eliminated In D.C. Budget Proposal

The D.C. City Council just held a critical vote on its budget, effectively killing its previous efforts to enact a 3 percent sales tax on advertising. By a vote of 11 to 2, the Council passed an amendment that would eliminate $18 million in proposed spending increases, which would have been funded by the new ad tax. This paves the way for an additional vote next Tuesday to strip the ad tax itself from the Council’s Budget Support Act, which we expect to similarly pass.  The tax would have applied to the purchase of advertising, including the business costs associated with its planning, creation, placement and display of advertising. No other state in the nation has this tax.

In response to the D.C. Council approving an amendment that paves the way for the removal of a proposed tax related to advertising from the Fiscal Year 2021 Budget, the following statement can be attributed to NAB President and CEO Gordon Smith:

“NAB thanks Chairman Mendelson and D.C. Council members who voted to support a path forward to remove the proposed advertising tax from this year’s city budget. This development is a major win for local media, advertisers, consumers and commerce. The outpouring of opposition expressed by local media companies and citizens in D.C. and across the nation effectively defeated the tax, which would have placed an undue burden on small businesses and local media already struggling amidst the pandemic. This should serve as an example for other local governments that such misguided taxes on advertising are counterproductive in stimulating local economies and will continue to be met with fervent opposition.”

The Michigan Association of Broadcasters participated by sending a letter to the DC Council. The real applause goes to Lisa Reynolds, Executive Manager of the Maryland DC Delaware Broadcasters Association and the NAB Government Relations team who turn the situation around.  Why would Michigan become involved? Because if a Tax on Advertising can be levied by a local government it will spread like wildfire and pretty soon it will be coming to a city council near you.

Background:

The D.C. Council recently proposed a 3% sales tax on businesses that buy advertising on TV, radio, print and digital outlets. The tax would apply to the purchase of advertising, including the business costs associated with its planning, creation, placement and display of advertising. No other state in the nation has this tax.




Biden Signals Whitmer Remains a VP Possibility

Gov. Gretchen Whitmer

Democratic Presidential Candidate Joe Biden said that winning Michigan is important for his hopes to win the White House during a Tuesday interview with WOOD-TV’s Rick Albin. He also indicated that Governor Gretchen Whitmer is still on his short list of possible running mates.

“How important is Michigan as it plays out in your electoral strategy and are you still considering Governor Gretchen Whitmer as a potential vice presidential candidate?” Albin asked the former vice president.

“Incredibly and yes,” Biden responded.