FCC Eliminates the Main Studio Rule and Begins Proceeding to Eliminate Additional Broadcast Regulations

Davis Wright Tremaine LLP

Davis Wright Tremaine LLP

On October 24, 2017, a divided FCC voted 3-2 in favor of eliminating the 80-year old requirement that TV and radio broadcasters maintain a main studio and locate employees in or near their community of license. The decision was divided on party lines, with Republicans voting in favor of eliminating the rule and the Democrats against. However, the decision provided welcome relief to many broadcasters who found these rules to be unduly burdensome in view of satellite-delivered programming and tight budgets.

As part of its Media Modernization initiative, the FCC eliminated the main studio rule, and its associated requirements that the FCC’s Republican Commissioners described as unnecessary and burdensome in a world where many obtain their news via social media and the internet. Specifically, the FCC found that “technological innovations have eliminated the need for a local main studio” because the “costs of complying with the main studio rule substantially outweigh any benefits.” In support of its elimination, the FCC noted that main studio-related costs range from $20,000 to several hundred thousand dollars per year. The FCC also eliminated the requirement that there must be two licensee employees present on a full-time basis at the main studio during normal business hours, as well as the requirement that all broadcast stations maintain local origination capability.

The decision to eliminate the main studio rule and many of its associated requirements was met with sharp rebuke from the FCC’s two Democrat Commissioners who argued that, by eliminating the rule, the FCC no longer finds a public interest benefit in physically tying broadcasters to the communities in which they are located. Nevertheless, broadcasters must continue to serve the needs of their communities by maintaining a toll-free number to allow local residents to contact the station. Broadcasters are also still required to maintain any portion of their public file that is not part of the online public file at an accessible place within their community of license. Consequently, broadcasters will still be required to maintain an association to the communities they serve.

Even with this rule change, many broadcasters are expected to continue maintaining a brick-and-mortar studio in their local communities. The Commission hopes that any cost savings achieved from eliminating the main studio rule and its associated requirements will incentivize broadcasters to invest greater time and resources into local programming and other community-focused initiatives. 

New Proceeding

In addition to the Order eliminating the main studio rule, the FCC also released a Notice of Proposed Rulemaking (“NPRM”) that proposes to eliminate additional regulatory burdens on

First, the NPRM proposes to require only those TV stations that derive revenue from providing ancillary and supplementary services (defined by the FCC to include non-broadcast services, such as data transmissions and paging services, among others) to file an FCC report on that revenue. In other words, if a TV station does not receive any ancillary or supplementary revenue, it will no longer be required to file an annual FCC report stating that. The NPRM explains that only a small number of TV stations actually earn ancillary or supplementary revenue, and requiring the vast majority of TV broadcasters that do not earn such revenue to continue filing reports with the FCC is both burdensome and unnecessary. Since no commenter “has articulated a compelling rationale for imposing the reporting obligation on all DTV licensees” it is highly likely that this reporting requirement will be modified as proposed in the NPRM.

Second, the NPRM proposes to provide broadcasters with more flexibility as to how they inform the public about the filing of certain applications. Currently, broadcasters are required to notify the public of broadcast license applications through local newspaper publication and over-the-air announcements. The NPRM questions whether the requirement to give public notice of such license applications should be modified to permit internet publication, or whether the public notice requirement should be eliminated in its entirety.

With the issuance of this NPRM, the FCC has signaled that it is committed to reducing what it perceives to be unnecessary burdens on broadcasters. DWT will provide updates as this proceeding advances and the FCC continues to enact or eliminate rules in furtherance of its Media Modernization initiative.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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