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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:

  • Inadequate Sponsorship ID Ends with $44,000 Fine
  • Unattended Main Studio Fine Warrants Upward Adjustment
  • $16,000 Consent Decree Seems Like a Deal

Licensee Fined $44,000 for Failure to Properly Disclose Sponsorship ID
For years, the FCC has been tough on licensees that are paid to air content but do not acknowledge such sponsorship, and an Illinois licensee was painfully reminded that failing to identify sponsors of broadcast content has a high cost. In a recent Notice of Apparent Liability (“NAL”), the FCC fined the licensee $44,000 for violating its rule requiring licensees to provide sponsorship information when they broadcast content in return for money or other “valuable consideration.”

Section 317 of the Communications Act and Section 73.1212 of the FCC’s Rules require all broadcast stations to disclose at the time the content is aired whether any broadcast content is made in exchange for valuable consideration or the promise of valuable consideration. Specifically, the disclosure must include (1) an announcement that part or all of the content has been sponsored or paid for, and (2) information regarding the person or organization that sponsored or paid for the content.

In 2009, the FCC received a complaint alleging a program was aired without adequate disclosures. Specifically, the complaint alleged that the program did not disclose that it was an advertisement rather than a news story. Two years after the complaint, the FCC issued a Letter of Inquiry (“LOI”) to the licensee. In its response to the LOI, the licensee maintained that its programming satisfied the FCC’s requirements and explained that all of the airings of the content at issue contained sponsorship identification information, with the exception of eleven 90-second spots. In these eleven spots, the name of the sponsoring organization was identified, but the segment did not explicitly state that the content was paid for by that organization.

Though the licensee defended its program content and the disclosure of the sponsor’s name as sufficient to meet the FCC’s requirements, the FCC was clearly not persuaded. The FCC expressed particular concern over preventing viewer deception, especially when the content of the programming is not readily distinguishable from other non-sponsored news programming, as was the case here.

The base forfeiture for sponsorship identification violations is $4,000. The FCC fined the licensee $44,000, which represents $4,000 for each of the eleven segments that aired without adequate disclosure of sponsorship information.

Absence of Main Studio Staffing Lands AM Broadcaster a $10,000 Penalty
In another recently released NAL, the FCC reminds broadcasters that a station’s main studio must be attended by at least one of its two mandatory full-time employees during regular business hours as required by Section 73.1125 of the FCC’s Rules. Section 73.1125 states that broadcast stations must maintain a main studio within or near their community of license. The FCC’s policies require that the main studio must maintain at least two full-time employees (one management level and the other staff level). The FCC has repeatedly indicated in other NALs that the management level employee, although not “chained to their desk”, must report to the main studio on a daily basis. The FCC defines normal business hours as any eight hour period between 8am and 6pm. The base forfeiture for violations of Section 73.1125 is $7,000.

According to the NAL, agents from the Detroit Field Office (“DFO”) attempted to inspect the main studio of an Ohio AM broadcaster at 2:20pm on March 30, 2010. Upon arrival, the agents determined that the main studio building was unattended and the doors were locked. Prior to leaving the main studio, an individual arrived at the location, explained that the agents must call another individual, later identified as the licensee’s Chief Executive Officer (“CEO”), in order to gain access to the studio, and provided the CEO’s contact number. The agents attempted to call the CEO without success prior to leaving the main studio.

Approximately two months later, the DFO issued an LOI. In the AM broadcaster’s LOI response, the CEO indicated that the “station personnel did not have specific days and times that they work, but rather are ‘scheduled as needed.'” Additionally, the LOI response indicated that the DFO agents could have entered the station on their initial visit if they had “push[ed] the entry buzzer.”

In August 2010, the DFO agents made a second visit to the AM station’s main studio. Again the agents found the main studio unattended and the doors locked. The agents looked for, but did not find, the “entry buzzer” described in the LOI response.

The NAL stated that the AM broadcaster’s “deliberate disregard” for the FCC’s rules, as evidenced by its continued noncompliance after the DFO’s warning, warranted an upward adjustment of $3,000, resulting in a total fine of $10,000. The FCC also mandated that the licensee submit a statement to the FCC within 30 days certifying that its main studio has been made rule-compliant.

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This morning the FCC released copies of 16 Orders to Show Cause sent to licensees of low power TV stations that have Class A status. Class A status protects such stations from being displaced by modifications to full-power stations and, with the recent enactment of the spectrum auction legislation, qualifies them to participate in the auction (for a share of the auction revenues) while protecting them from being spectrum repacked out of existence as part of the auction preparations.

Each of the Orders is surprisingly similar, noting that the FCC sent letters to the licensee in March and August of last year asking why it had not been regularly filing its FCC Form 398 Children’s Television Reports with the Commission. The Orders note that the licensees failed to respond to either of the FCC letters, and that the FCC is therefore demanding they now tell the FCC if there is any reason why it should not relieve them of their Class A status, making them regular LPTV licensees with attendant secondary status.

It is possible that these are just the beginning of a tidal wave of FCC orders aimed at thinning the ranks of Class A stations. First, given that these stations were told they had not filed all of their Children’s Television Reports and they then failed to respond to the FCC, these are the “easy” cases for the FCC, since it can assert that the licensee effectively defaulted by not responding. Presumably, for each licensee that did not respond at all, there were several that did respond to explain why their Children’s Television Reports might not be showing up in the FCC’s database. These cases will have more individualized facts, requiring the Media Bureau to write more detailed and diverse responses. Drafting those types of responses will take FCC staff more time than this largely cookie-cutter first batch, and that is why there likely will be more Show Cause Orders being sent to Class A stations in the not too distant future.

Beyond proving once again that “you don’t tug on Superman’s cape, you don’t spit into the wind, you don’t pull the mask off that old Lone Ranger, and you don’t fail to respond to an FCC letter” (Jim Croce as channeled by a communications lawyer), the Orders are a bit surprising since the FCC had previously taken the position that, like full-power TV stations, the penalty for a Class A station failing to comply with a rule is typically a fine, not the loss of Class A status. While the licensees that failed to respond to the FCC letters in March and August certainly did themselves no favors, it is likely that loss of Class A status is going to be the FCC’s favored enforcement tool going forward.

Why? Well, as I explain in a post coming out later this week on the new spectrum auction law, unlike Class A stations, LPTV stations were given no protections under the auction statute, leaving them at risk of being displaced into oblivion, with no right to participate in spectrum auction proceeds and no right to reimbursement for the cost of moving to a new channel during the repacking process (assuming a channel is available).

However, because the statute gives Class A stations rights similar to full-power TV stations, every Class A station the FCC can now eliminate increases the amount of spectrum the FCC can recover for an auction, reduces the amount of spectrum the FCC must leave available for broadcasters in the repacking process, and increases the potential profitability of the auction for the government (since it can just displace LPTV stations rather than compensate them as Class A stations).

That the FCC seems to now be moving quickly to cull LPTV stations from the Class A herd just a week after Congress cleared the way for a spectrum auction is likely no coincidence. Instead, these Orders represent the first of many actions the FCC is likely to take to simplify the repacking process while reducing the costs inherent in conducting an auction for vacated broadcast spectrum. For the FCC, LPTV stations and “former” Class A stations are the low-hanging fruit in conducting a successful spectrum auction. The question for other television licensees is how much further up the tree the FCC is going to climb to make more spectrum available for an auction at minimal cost to the government.

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According to the The Sign of Four, Sir Arthur Conan Doyle’s second Sherlock Holmes novel, Holmes preferred a seven-percent solution (a reference that would serve as the basis for another Holmes novel and movie some seventy years later). The FCC, on the other hand, has shown a regulatory fondness for relying on a five-percent solution. For example, a five-percent voting interest triggers application of the FCC’s multiple ownership rules, and when the FCC announced it would conduct random annual EEO audits, it decided that it would audit five percent of radio stations, five percent of TV stations, and five percent of cable systems each year for EEO compliance.

Further evidence of the FCC’s five-percent fondness arose this week in the context of a proceeding we first wrote about in the December FCC Enforcement Monitor. That story discussed a South Carolina AM station which, in an unusual twist, was fined twice for failing to file a license renewal application on time.

Section 73.3539(a) of the FCC’s Rules requires license renewal applications to be filed four months prior to the expiration date of the license. The AM station’s license was set to expire in December 2003, but no license renewal application was filed. The station licensee later explained that it did not file a license renewal application because it did not realize its license had expired. In May of 2011, seven years later, the FCC notified the station that its license had indeed expired, its authority to operate had been terminated, and its call letters had been deleted from the FCC’s database.

After receiving this letter, the station filed a late license renewal application and a subsequent request for Special Temporary Authority to operate the station until the license renewal application was granted. Because so much time had passed since the station failed to timely file its 2003 license renewal application, however, the deadline for the station’s 2011 license renewal application (for the 2011-2019 license term) also passed without the station filing a timely license renewal application. As a result, the FCC found the station liable for an additional violation of its license renewal filing obligations.

The base fine for failing to file required forms is $3,000. Thus, the FCC found the station liable for a total of $6,000 relating to these two violations, and an additional $4,000 for violating Section 301 of the Communications Act by continuing to operate for seven years after license expiration. The base forfeiture for the latter offense is $10,000, but the FCC reduced its proposed forfeiture to $4,000 because the station was not a pirate, and had previously been licensed. Combining all of the various proposed fines, however, still left the station holding a Notice of Apparent Liability for $10,000. On the good news side, the FCC did elect to renew the station’s license, holding that the station’s alleged rule violations did not evidence a “pattern of abuse.”

This week brought an additional chapter to the tale when the FCC released a decision on Valentine’s Day responding to the licensee’s request to have the $10,000 fine reduced or cancelled. The licensee presented two grounds for modifying the FCC’s original order. First, the licensee noted that one of the station’s co-owners had been in very poor health, and it was because of this that the station had missed the license renewal filing deadline (the decision fails to make clear whether it was the first or second license renewal application that the illness caused to be missed). The FCC indicated that it was sympathetic to the co-owner’s health issues, but it made clear that illness does not excuse the failure to timely file a license renewal application, particularly where the person in poor health was not the sole owner of the station.

The second ground presented was that the $10,000 fine was excessive for a small town AM station, particularly given the station’s financial status. As required by the FCC for those pleading financial hardship, the licensee turned over its tax returns for the past three years, showing annual gross revenues of $86,437, $88,947, and $103,707. Applying its five-percent solution, the FCC concluded that the licensee was entitled to a reduction in the fine, stating that “the Bureau has found forfeitures of approximately 5 percent of a licensee’s average gross revenue to be reasonable,” and that the “current proposed forfeiture of $10,000 constitutes approximately 11 percent of Licensee’s average gross revenue from 2008 to 2010.” The FCC therefore reduced the forfeiture to $4,600, stating that it would “align this case with the 5 percent standard used in prior cases.”

While few licensees would be pleased to hand over five percent of their annual gross revenue to the FCC, all should be aware that five percent marks the FCC’s threshold for assessing when a fine moves from being big enough to ensure future rule compliance, to instead causing undue financial hardship. For those facing an FCC fine, that is an important distinction.

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As a follow up to my earlier post today, the FCC has just released a decision rejecting a political advertising complaint filed by Randall Terry against WMAQ-TV in Chicago.

The FCC ruled that Terry failed to meet his burden to demonstrate to the station that he is a bona fide candidate for the Democratic Presidential Primary in Illinois. The FCC also ruled that even if Terry were a bona fide candidate, it was reasonable for the station to reject his request for ad time during the Super Bowl, since a station could reasonably conclude that “it may well be impossible, given the station’s limited spot inventory for that broadcast, including the pre-game and post-game shows, to provide reasonable access to all eligible federal candidates who request time during that broadcast.”

One aspect of the decision that is particularly interesting is the FCC’s conclusion that the mere fact that some stations may have aired the spots did not make another station’s decision not to air them unreasonable. The FCC assessed the degree to which Terry demonstrated he had broadly campaigned in Illinois, concluding that “[r]eview of the information provided by Terry to the station regarding his substantial showing demonstrates that much of it is either incomplete or without specific facts to support his claims regarding particular campaign activities” and that “the few locations in which he mentions campaigning fail to demonstrate that he has engaged in campaign activities throughout a substantial part of the state, as required by Commission precedent.”

While it is unlikely this decision marks the end of the controversy, it will certainly allow broadcasters to breathe easier for the moment. Unavoidably, however, the decision provides a road map to those seeking to exploit the rules in the future, detailing the type of showing they will need to make “next time” to establish a right to reasonable access, equal opportunity, and lowest unit charge (although probably not during the Super Bowl). While the FCC today set the bar appropriately high for establishing a bona fide candidacy, the benefits conveyed to candidates by the Communications Act are sufficiently attractive that it likely won’t be long before we see an effort by another “candidate” to clear that hurdle.

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If you are a television broadcaster, count yourself fortunate if you have not heard from the ad agency for Randall Terry. In a self-proclaimed effort to exploit the laws requiring broadcasters to give federal candidates guaranteed access to airtime as well as their lowest ad rates, Terry has announced he is running for President and wishes to air anti-abortion ads containing graphic footage of aborted fetuses during Super Bowl coverage and elsewhere.

Stations seeking not to air the ads have been the recipients of angry messages from the Terry campaign arguing that stations have no choice but to carry the ads under federal law, and they are not permitted to modify the ads in any way to delete the graphic content. That would be a generally accurate statement of the law if Terry is indeed a qualified “bona fide” candidate for President. The Terry campaign has already lodged at least one complaint at the FCC against a Chicago station for refusing to run the ads, and has sent messages to stations threatening a license renewal challenge if they don’t run his ads.

To say the least, this puts stations in an awkward position. If the FCC rules that Terry is a bona fide candidate, then stations that refused to air the ads are in violation of the political ad provisions of the Communications Act. If they air the ads and the FCC rules that Terry is not a bona fide candidate, then the stations are potentially liable for the content of those ads (since the “no censorship” rule on political ads wouldn’t apply). Either way, they risk license renewal challenges, either from Terry or from offended viewers. Even after the FCC rules, it’s a fair bet that the decision will be appealed, meaning that it may be a while before broadcasters have any clarity as to their legal obligations.

What has been absent from the discussion so far, however, is that the issue may loom far larger over other federal candidates than it does over broadcasters. The Communications Act grants federal candidates rights that no commercial advertiser has–a guaranteed right of access to a station’s airtime and, during the 45 days preceding a primary and the 60 days preceding a general election, a guarantee of paying the lowest available rate for ad time. Stated differently, broadcasters are required to air political speech they may disagree with, and to economically contribute to the candidate by selling airtime at prices below what they would be charging other short-term advertisers. An argument can be made that the former violates a broadcaster’s First Amendment rights, and that the latter violates both a broadcaster’s First Amendment rights (by requiring it to subsidize a candidate’s political speech), and its Fifth Amendment rights (via a government “taking” of its airtime and ad revenue).

Because broadcasters have always seen the carriage of candidate ads as part of their civic duty, they have carried them with a smile and not seriously challenged the statute that imposes these obligations. However, episodes like the Terry ads expose what we have always known about these rules, and that is simply the fact that they could easily be gamed. Some of the media have described the Terry ads as attempting to exploit a “loophole” in the law, but that is of course not really accurate, since a loophole suggests the law is working in a way other than intended when in fact, guaranteed carriage and lowest unit charge for bona fide federal candidates is the very purpose of the law.

Given the number of comedians and others over the years that have taken steps to run for President, I am frankly surprised that we have not yet seen the political ad that says “I’m George Smith and I’m running for President. I hope you’ll vote for me, but whether you do or don’t, I think you’ll find that the trip to the voting booth goes well with a nice cold Smith-brand beer.” Such ads could well qualify for guaranteed placement and the lowest possible ad rates.

If broadcasters find themselves increasingly forced to carry and subsidize “candidate” ads that cause their viewers to tune out while the advertiser avoids paying normal ad rates, the unspoken agreement between broadcasters and the federal government to live with the political advertising rules may come to an end, leading to a constitutional challenge of those rules. Sound farfetched? Not really. For decades, the FCC enforced an EEO rule that went beyond what was constitutionally permissible, but the FCC had perfected the art of fining stations an amount large enough to ensure future compliance, but low enough that it wasn’t worth the expense of challenging the rule in court. That “truce” between broadcasters and the FCC ended when the FCC upped the ante and sought to take a station’s license away for alleged EEO rule violations. At that point, our firm was hired to defend the station’s license at hearing. We let both the FCC and the petitioner that had raised the challenge know that the station was ready to vigorously defend its license, and that pursuing the case could well result in a court invalidating the FCC’s decades-old EEO rule. They pursued the case anyway, and the U.S. Court of Appeals for the DC Circuit did indeed toss out the EEO rule as unconstitutional.

Broadcasters are now faced with a somewhat similar situation, where their licenses are being threatened because a potential petitioner is arguing that they must forgo their First Amendment right to select their content, and instead air content (at a discount) that they find visually repugnant, regardless of their own political views on the abortion issue. If they are forced to do so, they have a beautiful set of facts with which to challenge the political ad provisions of the Communications Act, potentially resulting in a finding that those provisions are not constitutional in the current media environment, much to the detriment of candidates everywhere.

It is therefore not surprising that steps are being taken to avoid this “high noon” constitutional showdown between broadcasters and the Communications Act. The Democratic National Committee attempted to take some of the pressure off of broadcasters by releasing a letter stating, among other things, that “Mr. Terry’s claims to be a Democratic candidate for President are false. Accordingly, he should not be accorded the benefits of someone conducting a legitimate campaign for public office.” This letter gives the FCC ammunition to support broadcasters that do not wish to air the ads, and it is in no one’s interest to force broadcasters into a corner where challenging the constitutionality of the political rules is their least objectionable option. If that happens, future candidates could well find that they will no longer be “accorded the benefits of someone conducting a legitimate campaign for public office.”

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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:

  • Failure to Refresh Tower Paint Garners $8,000 Fine
  • FCC Levies $25,000 Fine for Failure to Respond
  • $85,000 Consent Decree Terminates Investigation Into Unauthorized Transfers of Control

Tower Owners Receive Harsh Reminder Regarding Lighting and Painting Compliance
The FCC, citing air traffic navigation safety, has fined many tower owners for noncompliance with Part 17 of the Commission’s Rules. Part 17 includes regulations pertaining to the registration, maintenance and notification obligations of tower owners. The base fine for violating Part 17 requirements is $10,000.

Part 17 supplements the notification obligations imposed by the Federal Aviation Administration (“FAA”). Section 17.7 of the FCC’s Rules requires that certain tower structures, including most structures over 200 feet in height and those near airports or heliports, be registered with the FCC. Section 17.21 mandates that most towers over 200 feet be lit and painted in accordance with the FAA’s recommendations. These recommendations include the use of orange and white paint (alternating bands) and red or white flashing, strobe or static lights.

With the recent release of two Notices of Apparent Liability (“NAL”), the FCC continued its pursuit of those who fail to comply with its tower rules, including Section 17.50, which mandates that any tower required to be painted in accordance with the FAA’s guidelines or the FCC’s Rules must be cleaned or repainted as often as necessary to maintain good visibility.

In the first of the two NALs, agents from the Dallas Field Office inspected a 402-foot tower located in Quanah, Texas and determined that the existing paint, which was faded, scraped, peeling or missing in certain areas, was insufficient. The NAL indicates that the agents were unable to distinguish between the orange and white bands from a “quarter mile from the [tower]”, thereby “reducing the structure’s visibility.”

Shortly after the Quanah inspection, agents from the Dallas Field Office also inspected a 419-foot tower located in Durant, Oklahoma. The agents found a similar situation, where the tower’s paint was faded, scraped, peeling or missing in certain areas. The agents were again unable to distinguish between the orange and white bands from “800 feet away from the [tower]”, once again “reducing the structure’s visibility.”

The FCC levied the full base fine of $10,000 against each tower owner. The FCC also mandated that no later than 30 days after the release of the respective NAL, a “written statement pursuant to Section 1.16 of the Rules signed under penalty of perjury by an officer or director of [the tower owner] stating that the [tower] has been painted to maintain good visibility” be delivered to the Dallas Field Office.

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One of the curiosities of communications law is that while there are thousands of applicable rules and statutory provisions, there are a handful that the FCC likes to enforce with particular gusto. One of these is the rule regarding how on-air contests must be conducted. Over the years, many broadcasters have found this to be a “strict liability” rule, with any problem that occurs in an on-air contest being laid at the feet of the broadcaster along with the standard $4,000 fine. As a result, despite the myriad state laws governing the conduct of contests, broadcast contests tend to be some of the more carefully conducted contests out there.

The rule itself, Section 73.1216, is one of the most concise of the FCC’s rules, being only two sentences long: “A licensee that broadcasts or advertises information about a contest it conducts shall fully and accurately disclose the material terms of the contest, and shall conduct the contest substantially as announced or advertised. No contest description shall be false, misleading or deceptive with respect to any material term.” Significantly longer than the rule itself, however, are the three footnotes to the rule, which provide details about what must be disclosed and how. The key requirements are that the “material terms” of the contest be disclosed on-air through “a reasonable number of announcements”. The typical basis for a $4,000 contest fine is that the station either fails to adequately disclose the material terms of the contest, or fails to comply with those terms in running the contest (for example, failing to award the stated prize).

What has changed since the current rule was adopted in 1976, however, is that stations increasingly have a station website with much content that is independent of their broadcast content, including online contests. While a station and its website will obviously cross-promote each other, neither is a substitute for the other, and each is a separate channel of communication with the public. As a general rule, the FCC has no jurisdiction over websites, and has not attempted to regulate contests that are not conducted on-air. While online contests are subject to numerous state and federal law requirements, they are not normally the subject of FCC proceedings.

Yesterday, however, the FCC released a decision proposing to fine a number of Clear Channel radio stations $22,000 for contest rule violations relating to a car contest conducted on the stations’ websites. Both the size of the fine and the fact that it does not relate to a true on-air contest make it a noteworthy decision. In the contest, listeners were invited to submit video commercials for Chevrolet (keep in mind the stations fined were radio stations), with the contestant submitting the best commercial winning a car. The FCC received a complaint from a listener who argued that the stations involved in the contest failed to disclose the material terms of the contest on-air, failed to conduct the contest in accordance with the stated rules, and improperly awarded the prize to a friend of an employee.

While the FCC declined to find that the contest was “fixed” merely because the winner was a friend of a station employee, it did find that the stations failed to disclose the material terms of the contest on-air, and that the stations failed to conduct the contest in accordance with the rules in any event, principally because the rules were internally inconsistent. One provision in the rules stated that entries would be accepted through March 21, 2008, but another provision stated that judges would select a winner on March 10, 2008, before the stated deadline for entries had passed.

In its defense, Clear Channel argued that the FCC’s rule doesn’t apply, since the contest was conducted on the stations’ websites, and was not a broadcast contest. In addition, it noted that the contest rules were posted on the station websites where the contest was being conducted. The FCC rejected this argument, stating that the stations had promoted the contest on-air, and that this cross-promotion made the contest a broadcast contest subject to the FCC’s rule. Interestingly, it does not appear from the FCC’s order that Clear Channel made the arguments that: (1) stations promote advertisers’ contests all of the time and the mere fact that a contest is promoted on-air does not extend the FCC’s jurisdiction to the conduct of those contests, and (2) there isn’t any reason from a First Amendment standpoint for requiring a different level of disclosure from a broadcaster than any other party choosing to promote its online contest on-air.

Having concluded that its contest rule applied, the FCC found that the stations violated that rule when they failed to air announcements disclosing the material terms of the contest rules, and that they also violated the rule by failing to accurately state the deadline for entries, creating confusion among listeners. Noting that the contest was promoted on multiple stations, that Clear Channel has previously been found in violation of the contest rule on multiple occasions, and that Clear Channel has “substantial revenues”, the FCC increased the base fine of $4000 to $22,000, an unusually high amount for a contest rule violation.

So what should broadcasters take away from this decision? First, that any on-air promotion of a contest makes it a “broadcast contest” unless the contest is conducted by a third party. In this regard, stations will want to be careful about co-sponsoring an advertiser’s contest, since an advertised contest that otherwise fully complies with all state and federal laws can suddenly cause a problem if the FCC concludes that it is a licensee-conducted contest.

Second, and this part is nothing new, stations and others conducting contests need to make sure that the contest rules are carefully written, consistent with law, and not confusing to potential contestants. Surprising as it is, major companies holding national contests frequently fail to accomplish this successfully, and the lawyers in our Contests & Sweepstakes practice are regularly called upon to draft or revise contest rules to avoid this problem. Given yesterday’s FCC decision, broadcasters have one more reason than everyone else to make sure that their contests, online or otherwise, are carefully conducted to comply with the law.

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Around this time last year, I wrote about developments to watch for in 2011 in a piece entitled “A Look Ahead at 2011 Reveals an Interesting Year for Retrans, Renewals, and Indecency“. Fortunately for me, 2011 didn’t disappoint (at least in that regard), with indecency now sitting before the U.S. Supreme Court (oral arguments coming next week), the flurry of retrans negotiations at the end of 2011 bringing a fundamental change in the nature of retrans negotiations that I hope to write about soon, and license renewals being a hot button issue for radio broadcasters in 2011 that will expand to television broadcasters in 2012.

This year, I’ve decided to expand my predictions to include well over 50 events that will affect broadcasters across the country in 2012, and to even go so far as to predict the exact dates on which each of these events will occur in 2012. So with that introduction, I present our 2012 Broadcasters’ Calendar, chock full of useful information for broadcasters and those who work with them. No need to guess at FCC and other government deadlines anymore (which turns out to be a very bad way to achieve regulatory compliance), since you can now tell at a glance what deadlines are coming up for stations in your state and broadcast service.

Using the latest in aerospace materials and technology, and innovatively organized by date, the 2012 Broadcasters’ Calendar is new and improved over our 2011 Broadcasters’ Calendar, principally because it covers events coming up in 2012, as opposed to events that already happened last year (which, again, turns out to be not as useful in a calendar).

So if you are a broadcaster, please join me in greeting 2012 with confidence in your upcoming regulatory obligations, and the warm feeling that comes from knowing that (one more prediction!) 2012 will be a monster year for political advertising buys (see 2012 Broadcasters’ Calendar – Nov. 6 – U.S. General Election).

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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:

  • Failure to Monitor and Repair EAS Equipment Nets $8,000 Fine
  • Fines for Late-Filed License Renewals Continue
  • $25,000 Fine for Failure to Answer FCC Correspondence

Act of Vandalism Ends With $8,000 Fine

In a recently released Notice of Apparent Liability (“NAL”), the FCC issued a fine totaling $8,000 against a New Mexico AM broadcaster for violating the FCC’s Emergency Alert System (“EAS”) rules. The NAL alleges that the broadcaster failed to properly maintain its EAS equipment, a violation of Section 11.35 of the FCC’s Rules.

During a June 2011 main studio inspection, an agent from the Enforcement Bureau’s San Diego Field Office observed that the station’s EAS equipment was not operational. According to the NAL, the Station’s EAS equipment had been damaged by vandalism six months prior to the inspection. In addition to the equipment failure, Station employees were unable to provide the required EAS documentation (i.e., logs or other EAS records) associated with the mandatory weekly and monthly tests required by Section 11.61 of the FCC’s Rules.

Inoperable EAS equipment is a violation of Section 11.35(a) of the Commission’s Rules, which mandates that broadcasters must ensure that the required EAS equipment is installed, maintained and monitored. Section 11.35(a) also requires EAS participants to log, among other things, instances when the station experiences technical issues during participation in the weekly or monthly EAS tests. Pursuant to Section 11.35(b), EAS participants must seek FCC approval if their EAS equipment will not be functioning for more than 60 days. The base fine for an EAS violation is $8,000. The FCC, stating that “EAS is critical to public safety,” levied the full fine against the broadcaster.

Late Filings and Unauthorized Operations Lead to $10,000 Forfeiture

The FCC recently issued a joint Memorandum Opinion and Order and NAL to the licensee of an AM station in South Carolina for several violations of the FCC’s Rules. The licensee was ultimately fined $10,000 for failing to file its license renewal application on time and for unauthorized operation of the station following the license’s expiration.

Section 73.3539(a) of the FCC’s Rules requires license renewal applications to be filed four months prior to the expiration date of the license. The AM station’s license was set to expire in December 2003, but no license renewal application was filed. The station licensee later explained that it did not file a renewal application because it did not realize the license had expired. In May of 2011, seven years later, the FCC notified the station that the station’s license had expired, its authority to operate had been terminated, and that its call letters had been deleted from the FCC’s database.

After receiving this letter, the station filed a late license renewal application and a subsequent request for Special Temporary Authority (“STA”) to operate the station until the license renewal application was granted. Because so much time had passed since the station failed to timely file its 2003 license renewal application, the deadline for the station’s 2011 license renewal application (for the 2011-2019 license term) also passed without the station filing a timely license renewal application. As a result, the FCC found the station liable for an additional violation of its license renewal filing obligations. The base fine for failing to file required forms is $3,000. Thus, the FCC found the station liable for a total of $6,000 relating to these two violations.

Further, the FCC found the licensee liable for violations of Section 301 of the Communications Act because the station continued operating for seven years after its license had expired. The base forfeiture for such a violation is $10,000, but the FCC lowered the proposed forfeiture to $4,000 because the station had previously been licensed.

In spite of the rule violations and $10,000 fine, the FCC decided to grant the station’s license renewal application, finding that the station’s violations did not evidence a “pattern of abuse.”
FCC Fines Unresponsive Party $21,000 Above Base Fine

A recent NAL released by the Enforcement Bureau provides a reminder that regulatory ignorance is not bliss. According to the NAL, the Enforcement Bureau, as part of an investigation into billing practices, issued a Letter of Inquiry (“LOI”) to a provider of prepaid calling cards on July 15, 2011. The LOI mandated that a response be submitted by August 4, 2011.

The provider failed to respond to the LOI by the initial deadline. The Enforcement Bureau, via e-mail on August 29, 2011, provided an additional extension of time to respond until September 8, 2011. The extended deadline again came and went without action by the provider. As of December 9, 2011, the Enforcement Bureau had not received a response to its July 2011 LOI. Pursuant to Section 1.80 of the FCC’s Rules, the base fine for failure to respond to FCC correspondence is $4,000.

The NAL noted that the FCC’s authority under Sections 4(i), 218, and 403 of the Communications Act of 1934 “empowers it to compel carriers … to provide the information and documents sought by the Enforcement Bureau’s LOI,” and that failure to respond to an Enforcement Bureau request “constitutes a violation of a Commission order.” The Enforcement Bureau stated that the provider’s “egregious, intentional and continuous” misconduct warranted a $21,000 upward adjustment to the base $4,000 fine, for a total fine of $25,000.

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

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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:

  • Malfunctioning Monitor Costs Broadcaster $10,000
  • FCC Fines Tower Owner $13,000 For Lighting and Ownership Issues

Faulty Remote Light Monitoring System Results in $10,000 Fine

According to a recent Notice of Apparent Liability (“NAL”), agents at the FCC’s Norfolk Field Office received a complaint of an unlit tower from the Federal Aviation Administration (“FAA”). Two weeks later, agents from the Norfolk Field Office contacted the local Sheriff’s Office for a visual confirmation of the tower’s lighting status. A deputy indicated that all but one of the lights on the 700 foot tower were not functioning and that the only functioning light was located 100 feet from the ground.
Section 17.51 of the FCC’s Rules requires certain structures to install and maintain red obstruction lighting. These lights must be functional between sunset and sunrise. The base fine for failure to comply with lighting and painting regulations is $10,000. Sections 17.47, 17.48 and 17.49 require structure owners to 1) inspect all automatic or mechanical lighting control devices at least every three months, 2) notify the FAA immediately of tower lighting malfunctions or extinguishments, and 3) maintain logs detailing any malfunctions or extinguishments.
The Norfolk field agents conducted an onsite inspection of the tower almost one month after receiving notification of the complaint from the FAA. The tower owner’s contract engineer was present at the time of the onsite inspection. During that inspection, the agents confirmed that only one tower light was functioning and that the tower’s remote light monitoring system was also malfunctioning. The NAL indicated that the consulting engineer admitted that the monitoring system had notified the tower owner that the top beacon was not functioning only six days prior to the onsite inspection. The tower owner notified the FAA at that time. The engineer also stated that the tower owner did not maintain tower logs detailing regular tower and control device inspections or instances of malfunctions.

In light of these failures, and the period of time over which they occurred, the FCC assessed a fine of $10,000 to the tower owner.

Reporting Failures Result in Fines Totaling $13,000

The registrant of an antenna structure in California was recently found liable for $13,000 for violations related to the antenna structure’s red obstruction lighting and for failing to notify the FCC of the structure’s change in ownership.

In response to complaints that the structure’s obstruction lighting had failed, agents from the Los Angeles Field Office contacted the registrant of the structure. Section 303(q) of the Communications Act of 1934 and Section 17.51(a) of the FCC’s Rules require that antenna structures be painted with aviation orange and white and have red obstruction lighting indicating the top and midpoints of the structure. Upon inspection, however, the agent found that none of the structure’s lights were functioning between sunset and sunrise. The Enforcement Bureau subsequently issued a Letter of Inquiry. In response, the registrant admitted that the lights were not operational for a period of two months, and he was unsure if he had notified the Federal Aviation Administration at the time of the outage, as required by Section 17.48 of the FCC’s Rules. As noted above, the base forfeiture for failing to comply with the required lighting and painting standards is $10,000. Though the violation was “repeated” because the outage lasted two months, the FCC did not issue an upward adjustment of the penalty.
The FCC further found that the registrant had violated Section 17.57 of the FCC’s Rules, which requires that tower owners immediately notify the FCC of any changes in ownership. The registrant assumed ownership of the structure in April 2008, but did not update the ownership information filed with the FCC until January 2011, after being contacted by agents from the Enforcement Bureau. The base forfeiture for violating the rules pertaining to tower ownership notifications is $3,000. As a result, the FCC tacked on an additional $3,000 fine, resulting in a total proposed fine of $13,000 for the tower owner.

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