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The FCC’s Office of Engineering and Technology (OET) today released the final version of its TVStudy software, which calculates TV station coverage areas for use in the spectrum auction and repacking.  The software can be accessed here.

In addition, pursuant to an earlier order of the FCC directing the OET to “release a detailed summary of baseline coverage area and population served by each television station to be protected in the repacking process,” the OET today released a 65 page table laying out its coverage area calculations for TV stations across the country using the final version of the TVStudy software.

The table includes baseline data for each station’s noise-limited, terrain-limited, and interference-free coverage areas and population served.  In an accompanying Public Notice, the OET indicated that the “noise-limited data reflects the coverage area within the station’s contour that will be replicated and the interference-free population data reflects the population served by the station that will be protected from interference” in the repacking.

The Public Notice cautions “that the list of stations included in the baseline data released today is not the final list of stations eligible for repacking protection” (which was addressed in an earlier Public Notice), and that “the baseline data released today reflects the current information in the Commission’s databases and is subject to update based on licensees’ Pre-Auction Technical Certifications,” which are due on July 9, 2015.

The FCC is therefore requesting comments on the baseline data, and has set a July 30, 2015 deadline for those comments.  Once it has had an opportunity to consider them, “OET will release the final baseline data to be used for purposes of the incentive auction and the repacking process well in advance of the auction. The final baseline data will contain the final list of eligible stations based on corrections from any ‘Petition for Eligible Entity Status’ and any corrected data from the Pre-Auction Technical Certifications.”

In addition to making sure they get their Pre-Auction Technical Certifications on file with the FCC by the July 9th deadline, stations should examine today’s baseline data for any surprises or anomalies that they will want to address in their comments.  As the FCC’s auction and repacking plans firm up, TV broadcasters will want to make sure to catch any mistakes in their stations’ data before those errors become ingrained in the Commission’s auction and repacking planning.

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June 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Educational FM Licensee Receives $8,000 Fine for Unauthorized Operation
  • FCC Cancels $6,000 Fine for Late Filings due to Licensee’s Inability to Pay
  • Blaming Prior Legal Counsel, Telecommunications Provider Pays $2,000,000 Civil Penalty

Continued Unauthorized Operation Leads to $8,000 Fine

A New York noncommercial educational radio station received an $8,000 fine after repeatedly failing to operate its station in accordance with its authorization. Section 301 of the Communications Act prohibits the use or operation of any apparatus for the transmission of communications or signals by radio, except in accordance with the Act and with a license granted by the FCC. In addition, Section 73.1350(a) of the FCC’s Rules requires a licensee to maintain and operate its broadcast station in accordance with the terms of the station authorization.

In response to a complaint, an FCC agent discovered in October of 2012 that the licensee was operating the station from a transmitter site in Buffalo, New York, a location about 36 miles from the authorized site. The FCC made repeated attempts to contact the licensee. Ultimately, the president of the licensee confirmed the unauthorized operation and agreed to cease operating from Buffalo. The FCC then issued a Notice of Unlicensed Operation to the licensee, warning it that future unauthorized operations could result in monetary penalties.

After receiving another complaint, the FCC determined that the licensee had resumed unauthorized operation in November of 2012. In response, the FCC’s Enforcement Bureau issued a Notice of Apparent Liability (NAL) proposing an $8,000 fine. The FCC explained in the NAL that although the base fine for operating at an unauthorized location is $4,000, the egregiousness of the licensee’s violation warranted an upward adjustment of an additional $4,000. The FCC based this decision on the fact that the licensee had moved the location of its transmitter to a significantly more populous area more than 30 miles from its authorized location in an effort to increase the station’s audience while potentially causing economic or competitive harm to radio stations licensed to that community.

Following the NAL, the licensee sought a reduction or cancellation of the fine, claiming that it made good faith efforts to remedy the violation, had a history of compliance with the FCC’s Rules, and was unable to pay the fine. The FCC concluded that the licensee took no remedial actions until after it was notified of the violation, and found that the licensee’s continued operation from the unauthorized location after receiving a Notice of Unlicensed Operation demonstrated a deliberate disregard for the FCC’s Rules. Finally, the licensee failed to provide any documentation supporting its inability to pay claim. Accordingly, the FCC rejected the licensee’s arguments and declined to cancel or reduce the $8,000 fine.

In Rare Decision, FCC Cancels Fine Based on Station’s Operating Losses

In October of 2014, the FCC’s Video Division proposed a $16,000 fine against the licensee of a Class A TV station for violating (i) Section 73.3539(a) of the FCC’s Rules by failing to timely file its license renewal application, (ii) Section 73.3526(11)(iii) for failing to timely file its Children’s Television Programming Reports for eight quarters, (iii) Section 73.3514(a) for failing to report those late filings in its license renewal application, and (iv) Section 73.3615(a) for failing to timely file its 2011 biennial ownership report. The FCC also noted a violation of Section 301 of the Communications Act because the station continued operating after its authorization expired. Continue reading →

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May 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • 404 Not Found: Missing Online Public File Documents Lead to $9,000 Fine
  • Wireless Providers Pay $158 Million to Settle Mobile Cramming Violations
  • Failure to Timely File License Renewal Application Results in $1,500 Fine

FCC Ramps up Enforcement of Online Public File Rule with $9,000 Fine and Multiple Admonishments

This month, the FCC proposed a $9,000 fine against one TV station licensee and admonished two others for violating the online public file rule. TV stations were required to upload new public file documents to the online public file on a going-forward basis beginning August 2, 2012, and should have finished uploading existing public file documents (with certain exceptions) by February 4, 2013. Until now, the FCC had taken relatively few enforcement actions against licensees for public file documents that exist but haven’t been uploaded to the station’s online public file, making three cases in one month stand out.

Section 73.3526(e)(11)(i) of the FCC’s Rules requires that every commercial TV licensee place in its public file, on a quarterly basis, an Issues/Programs List that details programs that have provided the station’s most significant treatment of community issues during the preceding quarter. Section 73.3526(b)(2), which the FCC modified in 2012, requires TV station licensees to upload these and most other public file documents to the FCC-hosted online public file website.

On October 1, 2014, an Oregon TV licensee filed its license renewal application. An FCC staff inspection revealed that the licensee failed to upload to the online public file copies of its Issues/Programs Lists for its entire license term. The FCC concluded that the licensee missed both the August 2, 2012 and the February 4, 2013 deadlines by over two years, resulting in two separate violations. Additionally, the licensee did not disclose the online file violations in its license renewal application, creating an additional violation of the FCC’s Rules. Each violation cost the station $3,000, for a total proposed fine of $9,000.

Also this month, a Honolulu licensee and a different Oregon licensee caught the FCC’s attention for online public file violations. The FCC proposed fines of $9,000 and $3,000 respectively against the stations for failing to timely file all of their Children’s Television Programming Reports. In addition, the FCC admonished both licensees for failing to timely upload electronic copies of their quarterly Issues/Programs Lists by the February 4, 2013 deadline. The FCC determined that while the licensees uploaded the documents approximately 18-19 months late, they were at least uploaded prior to the filing of each station’s license renewal application. Because this preserved the public’s ability to undertake a full review of the stations’ public file documents in connection with potentially filing a petition to deny, the FCC concluded that admonitions rather than additional fines were an appropriate response.

FCC Continues Crack Down on Cramming Violations With Two Multi-Million Dollar Settlements

The FCC announced this month that, in coordination with the Consumer Financial Protection Bureau and the attorneys general of all 50 states and D.C., it has reached settlements with two large wireless carriers to resolve allegations that the companies charged customers for unauthorized third-party products and services, a practice known as “cramming.” Investigations revealed that the companies had included charges ranging from $0.99 to $14.00 per month for unauthorized third-party Premium Short Message Services (“PSMS”) on their customers’ telephone bills, and that the companies retained approximately 30-35% of the revenues for each PSMS charge they billed. Continue reading →

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May 2015

This Broadcast Station Advisory is directed to radio and television stations in Arizona, the District of Columbia, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, West Virginia, and Wyoming, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

June 1, 2015 is the deadline for broadcast stations licensed to communities in Arizona, the District of Columbia, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, West Virginia, and Wyoming to place their Annual EEO Public File Report in their public inspection file and post the report on their station website. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by June 1, 2015.

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment.

In addition, those SEUs with five or more full-time employees (“Nonexempt SEUs”) must also comply with the FCC’s three-prong outreach requirements. Specifically, Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening, except in exigent circumstances, (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits, based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term. These Menu Option initiatives include, for example, sponsoring job fairs, participating in job fairs, and having an internship program. Continue reading →

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The FCC announced this afternoon that it has reached an agreement with iHeartCommunications resolving “an investigation into the misuse of the Emergency Alert System (EAS) tones….”  As we’ve noted before on numerous occasions, the federal government is very touchy about the use of an EAS alerting tone when there isn’t a test or actual emergency.

There are principally two reasons for this.  First, as the FCC noted (again) in today’s Public Notice, quoting Travis LeBlanc, Chief of the Enforcement Bureau, “[t]he public counts on EAS tones to alert them to real emergencies….  Misuse of the emergency alert system jeopardizes the nation’s public safety, falsely alarms the public, and undermines confidence in the emergency alert system.”

Second, the greatest advantage and disadvantage of the EAS system is that the tone contains digital data that automatically triggers EAS alerts by other stations monitoring the originating station.  This creates a highly efficient daisy chain that can distribute emergency information rapidly without the need for human intervention.

Unfortunately, that creates certain problems, one of which is that there is no human to intercede when an EAS warning of a zombie apocalypse occurs and there are no actual brain-eating creatures in the area (don’t laugh, this has actually happened already).  It is the electronic equivalent of Winston Churchill’s statement that “a lie gets halfway around the world before the truth has a chance to get its pants on.”

Compounding the harm is that while the originating station knows that the alert is false, and can so inform public safety personnel and the public itself when contacted about it, stations further down the automated distribution chain know only that they received and redistributed an EAS alert.  They have no knowledge of the facts surrounding the alert itself, potentially leading to a longer period of public panic before the EAS system locates its pants.

For reasons that are hard to discern, other than perhaps that the public has become more aware of EAS (resulting in more attention from advertisers and programmers seeking to leverage that familiarity), there has been a significant uptick in false EAS alerts in the past five years.  The result has been a growing number of FCC fines in amounts that previously only appeared in indecency cases.  Today’s Public Notice indicates that the FCC has “taken five enforcement actions totaling nearly $2.5 million for misuse of EAS tones by broadcasters and cable networks” in the past six months.

In today’s case (the Order for which has now been released), the FCC stated that “WSIX-FM, in Nashville, Tennessee, aired a false emergency alert during the broadcast of the nationally-syndicated The Bobby Bones Show.”  Delving into the details, the FCC noted that:

While commenting on an EAS test that aired during the 2014 World Series, Bobby Bones, the show’s host, broadcast an EAS tone from a recording of an earlier nationwide EAS test.  This false emergency alert was sent to more than 70 affiliated stations airing “The Bobby Bones Show” and resulted in some of these stations retransmitting the tones, setting off a multi-state cascade of false EAS alerts on radios and televisions in multiple states.

The FCC indicated that the station has formally admitted to a violation of the FCC’s EAS rules, and has agreed to (1) pay a $1,000,000 civil penalty, (2) implement a three-year compliance plan, and (3) “remove or delete all simulated or actual EAS tones from the company’s audio production libraries.”

While the size of the financial penalty is certainly noteworthy, the real first in this particular proceeding is the FCC’s effort to eradicate copies of EAS tones before they can be used by future production staffs.  Given the easy access to numerous recordings of EAS tones on the Internet, the FCC might be a bit optimistic that deleting the tone from a station’s production library will prevent a recurrence.  However, it is perhaps an acknowledgement that most false EAS tone violations are the result of employees unaware of the FCC’s prohibition rather than a producer bent on violating the rule.  It is also an acknowledgement that even a multi-year compliance program may not solve the problem if an EAS tone is lurking in the station library, seductively tempting and teasing that ambitious new staffer who just got a great idea for a funny radio bit….

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April 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Scuttles New York Pirate Radio Operator and Proposes $20,000 Fine
  • Failure to Properly Identify Children’s Programming Results in $3,000 Fine
  • Telecommunications Carrier Consents to Pay $16 Million To Resolve 911 Outage Investigation

Fire in the Hole: FCC Proposes $20,000 Fine Against Pirate Radio Operator

This month, the FCC proposed a fine of $20,000 against an individual in Queens, NY for operating a pirate FM radio station. Section 301 of the Communications Act prohibits the unlicensed use or operation of any apparatus for the transmission of communications or signals by radio. Pirate radio operations can interfere with and pose illegal competitive harm to licensed broadcasters, and impede the FCC’s ability to manage radio spectrum.

The FCC sent several warning shots across the bow of the operator, noting that pirate radio broadcasts are illegal. None, however, deterred the individual from continuing to operate his unlicensed station. On May 29, 2014, agents from the Enforcement Bureau’s New York Office responded to complaints of unauthorized operations and traced the source of radio transmissions to an apartment building in Queens. The agents spoke with the landlord, who identified the man that set the equipment up in the building’s basement. According to FCC records, no authorization had been issued to the man, or anyone else, to operate an FM broadcast station at or near the building. After the man admitted that he owned and installed the equipment, the agents issued a Notice of Unlicensed Operation and verbally warned him to cease operations or face significant fines. The man did not respond to the notice.

Not long after, on January 13, 2015, New York agents responded to additional complaints of unlicensed operations on the same frequency and traced the source of the transmissions to another multi-family dwelling in Queens. The agents heard the station playing advertisements and identifying itself with the same name the man had used during his previous unlicensed operations. Again, the agents issued a Notice of Unlicensed Operation and ordered the man to cease operations, and again he did not respond.

The FCC therefore concluded it had sufficient evidence that the man willfully and repeatedly violated Section 301 of the Communications Act, and that his unauthorized operation of a pirate FM station warranted a significant fine. The FCC’s Rules establish a base fine of $10,000 for unlicensed operation of a radio station, but because the man had ignored multiple warnings, the FCC doubled the base amount, resulting in a proposed fine of $20,000.

FCC Rejects Licensee’s Improper “E/I” Waiver Request and Issues $3,000 Fine

A California TV licensee received a $3,000 fine this month for failing to properly identify children’s programming with an “E/I” symbol on the screen. The Children’s Television Act (“CTA”) requires TV licensees to offer programming that meets the educational and informational needs of children, known as “Core Programming.” Section 73.671 of the FCC’s Rules requires licensees to satisfy certain criteria to demonstrate compliance with the CTA; for example, broadcasters are required to provide specific information to the public about the children’s programming they air, such as displaying the “E/I” symbol to identify Core Programing. Continue reading →

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It was once a tradition that the FCC would release a pro-broadcaster rulemaking decision on the eve of the NAB Show to ensure a warm reception when the commissioners and staff arrived to speak at the Show. I say it “once” was a tradition because pro-broadcaster rulemakings are none too common these days, a point alluded to by Chairman Wheeler at the Show when he said “Now, I’ve heard and read how some believe the Federal Communications Commission has been ignoring broadcasting in favor of shiny new baubles such as the Internet.”

Still, it was in the spirit of that tradition that the Chairman posted a blog titled “Let’s Move on Updating the AM Radio Rules” two days before his NAB speech. In it, he stated his intent to call for a vote in the AM Revitalization proceeding, which then-acting-Chairman Clyburn launched at a different NAB convention in September of 2013.

The post was unavoidably sparse on details given its short length, but one detail leapt out at radio broadcasters. While signaling movement on smaller issues (“the proposed Order would give stations more flexibility in choosing site locations, complying with local zoning requirements, obtaining power increases, and incorporating energy-efficient technologies”), the post rejected what the industry sees as the real answer to revitalizing AM radio—opening a filing window for applicants seeking to build translators to rebroadcast AM radio stations on the FM band (a “translator” in the truest sense of the word).

Many see this as the most practical and consequential option since it would allow AM daytimer stations to serve their audiences around the clock, while overcoming many of AM radio’s worst obstacles—interference from appliances and electronics, as well as other AM stations, and AM’s limited sound quality. Most importantly, unlike a number of other potential solutions, FM translators avoid the need for everyone to buy a new radio in order to make the solution viable.

In his blog post, the Chairman gave two reasons for this surprising development. First, he questioned “whether there is an insufficient number of FM translator licenses available for AM licensees.” Second, he raised qualms about opening a window for only AM licensees, stating that “the government shouldn’t favor one class of licensees with an exclusive spectrum opportunity unavailable to others just because the company owns a license in the AM band.”

The first reason is, quite simply, factually unsupported by the proceeding record. In comments and reply comments filed just a year ago, the call for an FM translator filing window was deafening. It’s hard to believe the need for such translators has dramatically plummeted in just a year, or that the call for a window would have been so loud were there truckloads of FM translators already out there (in the right location) just waiting to be purchased. For anyone thinking that AM stations just want a “free” translator rather than buying one, applying for and building a translator is anything but free. In addition, the likelihood of mutually exclusive translator applications raises the specter of licenses being awarded by auction, ensuring that acquiring one from the FCC would hardly be “free”.

Of course, the oversupply argument is logically flawed as well. If a window is unnecessary, no one will show up with an application, and the only energy expended will be that of drafting a public notice announcing the window. In reality, however, few think that would be the result, as the FCC’s last general filing window for FM translators was back in 2003, long before AM stations were even permitted to rebroadcast on an FM translator. In other words, far from receiving preferential treatment, AM licensees have never even had an opportunity to apply for an FM translator to retransmit their stations.

All of which makes the second reason given in the Chairman’s post—avoiding an AM licensee-only filing window—even more curious. Under the current FM translator rule, Section 74.1232, applying for an FM translator license is not limited to broadcast licensees. The rule provides that “a license for an FM broadcast translator station may be issued to any qualified individual, organized group of individuals, broadcast station licensee, or local civil governmental body….”  A common example of this is a community with limited radio service that applies for and builds an FM translator to rebroadcast a distant station that is otherwise difficult to receive locally, providing that community a reliable information lifeline. Indeed, the FCC is finding out on the television side that many of the TV translators that might be repacked out of existence are owned by local communities rather than licensees.

So the FCC would not even need to revise its eligibility rules in order to open an “FM for AM” translator window for all comers. Under the existing rule, anyone is free to apply as long as they have “a valid rebroadcast consent agreement with such a permittee or licensee to rebroadcast that station as the translator’s primary station.” In terms of being limited to serving as a translator for an AM station, that is the nature of an FCC filing window, as the FCC always specifies the type of application it will accept in any filing window announcement, and has never opened a “file for whatever service you want” window.

Thus, the record amply supports the need for an “FM for AM” translator window, and the current rules preclude any concern that a window would offer preferential treatment, as anyone who wants one can apply for one.

So what is the FCC waiting for?

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It sounds like the setup for a joke: a broadcaster, a broker, a banker, a broadcast lawyer, and a backer all walk into a bar. There is no punch line, however, as that will happen innumerable times over the next week, and that just means it’s time for this year’s NAB Show!

What started as a simple gathering of broadcasters and broadcast equipment vendors has grown to mammoth proportions, now encompassing not just broadcasting, but every aspect of content and content delivery, as well as mountains of technology for creating and distributing that content. Billed as “the world’s largest media and entertainment event” with around 100,000 attendees, it is also one of the largest conventions in Las Vegas each year, nearly doubling the attendance (I kid you not) of February’s “World of Concrete” convention.

As it has grown, the NAB Show has become a magnet for those of us that work in and around the industry, as you can accomplish in an afternoon what would otherwise take dozens of plane trips. As a result, lots of transactions are launched or sealed in the confines of the hotels surrounding the Convention Center. While that may not be different from any other week in Vegas, these deals will often involve broadcast stations and program content.

The Great Recession battered all conventions, including the NAB Show, but pre-Show levels of activity seem to indicate that this year’s Show will be a return to form, bringing back people that may have skipped the past few years. Perhaps more important is an accompanying shift in attitude. It seems attendees are back to looking for ways to expand their businesses rather than just survive until economic conditions improve.

I will be there along with the rest of the Pillsbury contingent going this year—Lew Paper, Miles Mason, Lauren Lynch Flick, and our newest addition, David Burns. There will be much to see, and I know the other lawyers on Pillsbury’s Unmanned Aircraft Systems team are jealous, as the number of drones on display in the Convention Center will likely exceed that of both the CIA and the Air Force (minus the Hellfire missiles).

So we look forward to seeing you there, and if it isn’t everything you are hoping for, don’t worry; there’s another World of Concrete expo coming in 2016!

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March 2015

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Deceptive Practices Yield Multi-Million Dollar Fines for Telephone Interexchange Carriers
  • LPFM Ads Cost $16,000
  • Multiple TV Station Licensees Face $6,000 Fines for Failing to File Children’s TV Programming Reports

Interexchange Carriers’ “Slamming” and “Cramming” Violations Yield Over $16 Million in Fines

Earlier this month, the FCC imposed a $7.62 million fine against one interexchange carrier and proposed a $9 million fine against another for changing the carriers of consumers without their authorization, commonly known as “slamming,” and placing unauthorized charges for service on consumers’ telephone bills, a practice known as “cramming.” Both companies also fabricated audio recordings and submitted the recordings to the FCC, consumers, and state regulatory officials as “proof” that consumers had authorized the companies to switch their long distance carrier and charge them for service when in fact the consumers had never spoken to the companies or agreed to the service.

Section 258 of the Communications Act and Section 64.1120 of the FCC’s Rules make it unlawful for any telecommunications service carrier to submit or execute a change in a subscriber’s selection of telephone exchange service or telecommunications service provider except with prior authorization from the consumer and in accordance with the FCC’s verification procedures. Additionally, Section 201(b) of the Communications Act requires that “all charges, practices, classifications, and regulations for and in connection with [interstate or foreign] communications service [by wire or radio], shall be just and reasonable.” The FCC has found that any assessment of unauthorized charges on a telephone bill for a telecommunications service is an “unjust and unreasonable” practice under Section 201(b), regardless of whether the “crammed” charge is placed on consumers’ local telephone bills by a third party or by the customer’s carrier.

Further, the submission of false and misleading evidence to the FCC violates Section 1.17 of the FCC’s Rules, which states that no person shall “provide material factual information that is incorrect or omit material information . . . without a reasonable basis for believing that any such material factual statement is correct and not misleading.” The FCC has also held that a company’s fabrication of audio recordings associated with its “customers” to make it appear as if the consumers had authorized the company to be their preferred carrier, and thus charge it for service, is a deceptive and fraudulent practice that violates Section 201(b)’s “just and reasonable” mandate.

In the cases at issue, the companies failed to obtain authorization from consumers to switch their carriers and subsequently placed unauthorized charges on consumers’ bills. The FCC found that instead of obtaining the appropriate authorization or even attempting to follow the required verification procedures, the companies created false audio recordings to mislead consumers and regulatory officials into believing that they had received the appropriate authorizations. One consumer who called to investigate suspect charges on her bill was told that her husband authorized them–but her husband had been dead for seven years. Another person was told that her father–who lives on another continent–requested the change in service provider. Other consumers’ “verifications” were given in Spanish even though they did not speak Spanish on the phone and therefore would not have completed any such verification in Spanish. With respect to one of the companies, the FCC remarked that “there was no evidence in the record to show that [the company] had completed a single authentic verification recording for any of the complainants.”

The FCC’s forfeiture guidelines permit the FCC to impose a base fine of $40,000 for “slamming” violations and FCC case law has established a base fine of $40,000 for “cramming” violations as well. Finding that each unlawful request to change service providers and each unauthorized charge constituted a separate and distinct violation, the FCC calculated a base fine of $3.24 million for one company and $4 million for the other. Taking into account the repeated and egregious nature of the violations, the FCC found that significant upward adjustments were warranted–resulting in a $7.62 million fine for the first company and a proposed $9 million fine for the second.

Investigation Into Commercials Aired on LPFM Station Ends With $16,000 Civil Penalty

Late last month, the FCC entered into a consent decree with the licensee of a West Virginia low power FM radio station to terminate an investigation into whether the licensee violated the FCC’s underwriting laws by broadcasting announcements promoting the products, services, or businesses of its financial contributors.

LPFM stations, as noncommercial broadcasters, are allowed to broadcast announcements that identify and thank their sponsors, but Section 399b(b)(2) of the Communications Act and Sections 73.801 and 73.503(d) of the FCC’s Rules prohibit such stations from broadcasting advertisements. The FCC has explained that the rules are intended to protect the public’s use and enjoyment of commercial-free broadcasts in spectrum that is reserved for noncommercial broadcasters that benefit from reduced regulatory fees.

The FCC had received multiple complaints alleging that from August 2010 to October 2010, the licensee’s station broadcast advertisements in violation of the FCC’s noncommercial underwriting rules. Accordingly, the FCC sent a letter of inquiry to the licensee. In its response, the licensee admitted that the broadcasts violated the FCC’s underwriting rules. The licensee subsequently agreed to pay a civil penalty of $16,000, an amount the FCC indicated reflected the licensee’s successful showing of financial hardship. In addition, the licensee agreed to implement a three-year compliance plan, including annual reporting requirements, to ensure no future violations of the FCC’s underwriting rules by the station will occur.

Failure to “Think of the Children” Leads to $6,000 Fines

Three TV licensees are facing $6,000 fines for failing to timely file with the FCC their Form 398 Children’s Television Programming Reports. Section 73.3526 of the FCC’s Rules requires each commercial broadcast licensee to maintain a public inspection file containing specific information related to station operations. Subsection 73.3526(e)(11)(iii) requires a commercial licensee to prepare and place in its public inspection file a Children’s Television Programming Report on FCC Form 398 for each calendar quarter. The report sets forth the efforts the station made during that quarter and has planned for the next quarter to serve the educational and informational needs of children. Licensees are required to file the reports with the FCC and place them in their public files by the tenth day of the month following the quarter, and to publicize the existence and location of those reports.

This month, the FCC took enforcement action against two TV licensees in California and one TV licensee in Ohio for Form 398 filing violations. The first California licensee failed to timely file its reports for two quarters, the second California licensee failed to file its reports for five quarters, and the Ohio licensee failed to file its reports for eight quarters. Each licensee also failed to report these violations in its license renewal application, as required under Section 73.3514(a) of the Rules. Additionally, the Ohio licensee failed to timely file its license renewal application (in violation of Section 73.3539(a) of the Rules), engaged in unauthorized operation of its station after its authorization expired (in violation of Section 301 of the Communications Act), and failed to timely file its biennial ownership reports (in violation of Section 73.3615(a) of the Rules).

Despite the variation in the scope of the violations, each licensee now faces an identical $6,000 fine. The FCC originally contemplated a $16,000 fine against the Ohio licensee, as its guidelines specify a base forfeiture of $10,000 for unauthorized operation alone. However, after assessing the licensee’s gross revenue over the past three years, the FCC determined that a reduction of $10,000 was appropriate, resulting in the third $6,000 fine.

A PDF version of this article can be found at FCC Enforcement Monitor.

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As we posted earlier, the FCC voted at its February meeting to preempt state laws in Tennessee and North Carolina restricting municipalities from providing broadband service. The FCC has now released the text of its Order, and it reveals the expanse of the FCC’s concerns, filling in the details as to the types of state law provisions the FCC considers to be barriers to broadband competition and therefore subject to preemption. The Order furnishes critical guidance to other municipalities considering a challenge of laws in their own states. It also informs state legislators as to how they can modify existing state laws to avoid a future confrontation with the FCC.

In the Order, the FCC preempted a Tennessee law prohibiting municipal electric utilities from providing broadband service outside their service areas, and certain restrictions and requirements of a North Carolina law. The FCC did so under its asserted authority pursuant to Section 706 of the Telecommunications Act of 1996 to remove barriers to broadband investment and promote broadband competition. The specific restrictions the FCC found to constitute or contribute to such barriers are summarized below, and the breadth of the FCC’s preemption of these restrictions is substantial. As a result, no one should be surprised to see more preemption requests arriving at the FCC.

Tennessee Law

The Tennessee law was fairly straightforward. It prohibited a municipally-owned electric power system from offering internet or video services anywhere outside the geographic footprint in which it provides electric service. The FCC found that this territorial restriction was an explicit barrier to broadband investment and competition, and used its authority under Section 706 to preempt the restriction. This portion of the FCC’s decision offers no real surprises, and relies on a fairly basic view of what constitutes a barrier to growth in municipal broadband.

North Carolina Law

Far more interesting is the portion of the Order relating to North Carolina. The North Carolina law was more complex, containing a variety of restrictions and requirements for municipalities wishing to deploy broadband service. The FCC found that, taken in the aggregate, these portions of the law created a barrier to broadband investment and competition, leading the FCC to preempt them. While acknowledging that some of the preempted provisions in the North Carolina law might have been allowed to stand individually, the FCC concluded that the aggregate effect required their preemption. In taking this approach, the FCC left some uncertainly as to which provisions it would have preempted on even a stand-alone basis, but provided very helpful guidance as to both the nature and scope of the FCC’s concerns. As the list of provisions preempted by the FCC set forth below indicates, the FCC’s view of barriers to municipal broadband growth is quite expansive.
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