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Because many hotels and resorts hold Federal Communications Commission (“FCC”) licenses for the wireless radios that employees use for daily communications on property, the next property acquisition or sale may have more regulatory hoops than you realize. In fact, if a property holds FCC licenses, the property can’t be bought or sold without the FCC first consenting to the transfer of control of the radio licenses.

Digital Signage Part III:  Potential Legal Issues

The proverb asserting that the more things change, the more they stay the same, always seems true when one thinks about potential legal issues from new technologies.

Digital signs are still signs, and placement of signs – especially billboards – has long been an issue receiving the attention of local governments. If those signs are emitting light and displaying motion, there may be even greater concern about their placement and their potential nuisance value. The Federal Highway Administration allowed digital billboards in 2007, concluding that they did not pose a danger to drivers. However, the FHWA has been studying the research and working on a report, which is anticipated this year, focusing on whether or not electronic billboards can be a dangerous distraction for drivers because they are so much more dramatic than conventional billboards. Furthermore, as digital signs proliferate, they will likely be scrutinized more closely under federal, state and local historic preservation and environmental impact laws.

Digital Signage Part 1:  What is a Digital Sign?

According to the humorist Robert Benchley “There are two kinds of people in the world: those who divide the world into two kinds of people, and those who don’t.” Borrowing from Mr. Benchley, there are two kinds of people in the world – those who know about digital signage and those who don’t. Today, the latter is probably the larger group, but the former is a fast growing group. Because digital signs have already started to impact every organization and location where people gather, there is good reason to join the group of those who know about digital signage.

What comes to mind in response to the word “sign”? Something along the side of a road that conveys meaningful information?  Something you look for along that road when you are low on gas? Something to let you know that you have arrived at your destination without running out of gas? The word “open” in glowing neon light at that destination? 

Many signs have remained unchanged for decades. However, because of a variety of technological advances, such as digital signal transmission, high-speed high-volume broadband, flat-screen displays, QR codes and near field communications (transmitting information wirelessly over very short distances such as by touching smartphones) the concept of a sign has changed dramatically over the past decade. What once was static can now be dynamic and can take many very different forms.

A common term for modern signs is “digital sign” or “digital signage.” There is no single recognized definition of this term right now. However, a digital sign is something you know when you see it because it is different from what you are used to seeing. The Digital Place-based Advertising Association has adopted the following definition:  “a display device that has the ability to display dynamic advertising and replaced static billboards and posters.” Note the use of the term “display device” to suggest some piece of hardware. Note the use of the term “dynamic” contrasted with “static”. Given the highly specialized mission of this particular association, note also the reference to advertising; however, there is no reason why a digital sign cannot convey non-advertising messages as well.

The Federal Communications Commission announced on February 20, 2013, that it intends to propose new rules to govern the next generation of Wi-Fi technology. This is an important development for convention centers, large hotel/conference facilities, airports and any other facility that struggles with Wi-Fi congestion because of the insatiable appetite of high-volume wireless users. The FCC’s proposal will include making spectrum available in the 5 GHz band for ultra-high-speed, high-capacity Wi-Fi known as “Gigabit Wi-Fi”.

While the majority of hotel owners and operators rely on well-established cable companies and suppliers of in-room entertainment systems, this post serves as an important reminder of the need to ensure that these traditional providers of video programming do everything necessary to comply with the many laws and regulations that apply to the provision of video programming.

In the parlance of the Federal Communications Commission (FCC), a hotel that makes multiple channels of video programming available to its guests and customers is called a “non-cable multichannel video programming distributor” or “MVPD.” Typically, a non-cable MVPD does not cross a public right-of-way to deliver video programming.

While this type of video system may not meet the definition of a cable television system under the FCC’s rules, it is nonetheless subject to many of the same restrictions and requirements as a cable television operator. In fact, the FCC just recently issued a formal citation to a hotel located in Orange County, California, for violating the FCC’s rules. In addition, the FCC issued a Public Notice reminding all non-cable MVPDs of their obligations under the FCC’s rules.

    • The first obligation is to file a Notification on FCC Form 321 that the operator intends to operate on frequencies between 108 and 137 MHz and between 225 and 400 MHz – frequencies that correspond with cable channels 14-16, 25-53 and 98-99.  These frequencies are also used for aeronautical communications.
    • Because these systems have the potential to cause harmful interference to aeronautical communications, with potentially life-threatening results, the second obligation is to measure the systems on a regular basis to ensure that there is no excess “signal leakage.”  If there is, then the non-cable MVPD must suspend operations and fix the problem.  The most common cause for such “signal leakage” tends to be operators who seek to improve the signal within their facilities by “over-powering” the system or fail to properly maintain their systems (e.g. bare wires).
    • Except for certain small systems, operators must file with the FCC annual measurement reports (on Form 320).  In addition, operators must retain, for a period of two years, logs showing the date and location of each leakage source, the date of repair, and the probable cause of the leakage.

Rooftop leasing to telecommunications companies can be an attractive way for a hotel owner or operator to increase revenues. Rents can range from $1,000 to $10,000 a month based on the strength of the location, and capital outlays for the owner are often minimal because the telecommunication company usually provides the necessary equipment. Ashok Kumar notes these and other benefits in his article, “Wireless is Going Through the Roof – Can Your Hotel Make Money on it?”

Before entering into a rooftop telecommunications lease, however, one should consider some of the traps and pitfalls that are often associated with telecommunications company lease forms. Below are a few tips for an owner or operator’s consideration when evaluating a rooftop lease.

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About the Editor

Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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