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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.

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In its various incarnations — CONELRAD, the Emergency Broadcast System, the Emergency Alert System, and soon, the EAS CAP system — America’s public warning system has much in common with a vintage automobile that has been taken out of the garage only for short trips. In those short trips (mostly state and local tests and alerts), it has performed adequately, but until this week’s national test, we never had a chance to take it out on the open road and see what it could really do.

Now that the first national EAS test is behind us, we know that the system isn’t broken, but that it definitely will benefit from this breaking in process. That process, which necessarily includes extensive analysis of this week’s test, will reveal numerous ways in which the system can be tweaked for better and more reliable performance under open road conditions. The basic system appears to have run fine; the message got out to the public (though obviously better in some locations than others).

Unlike the relative simplicity of an automobile, however, the EAS system is one of the largest pieces of machinery in the world, having immense geographic scope and a staggering number of components. Getting all of those components to function smoothly together is a complex task that requires much more effort than the typical automotive tune up. Its performance grows more impressive when you remember that most of those components are independently (and privately) owned and operated, and are not supported by federal funding. The EAS system is perhaps the ultimate public-private partnership.

While it is too early to provide a detailed assessment of the areas where the functioning of the system went astray, as we indicated previously, the purpose of the test was to help FEMA, the FCC, and EAS Participants determine the reliability of the EAS system and where it needs improvement, and the test certainly accomplished that. There were a number of issues uncovered with regard to cable and satellite alerts, as well as individual radio and television stations in Oregon and a number of other locations apparently not receiving the test, excessive background audio noise in the test message, some television stations receiving video but no audio, and header codes apparently being sent twice. While the press has understandably focused on areas where problems arose, initial reports seem to indicate that the alert was heard in the vast majority of locations, and that the next area to focus on is ensuring that the content of the alert itself is clear and understandable to the public.

According to the FCC, it and FEMA will now use the results of the test “to identify gaps and generate a comprehensive set of data to help strengthen our ability to communicate during real emergencies. Based on preliminary data, media outlets in large portions of the country successfully received the test message, but it wasn’t received by some viewers or listeners. We are currently in the process of collecting and analyzing data, and will reach a conclusion when that process is complete.”

EAS Participants should remember that just because the national test is over, their work is not done. As we discussed in October, the FCC is encouraging online reporting of each Participant’s test results as soon as possible and has mandated that the information be submitted to the FCC no later than December 27, 2011 (either online or on paper).

In the meantime, that noise you hear coming from the nation’s garage will be thousands of EAS Participants, EAS equipment manufacturers, and government officials tuning and tweaking the EAS system for its next run on the open road.

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FEMA has indicated that the audio of the November 9th national EAS test is being shortened from its original two and a half minute length to thirty seconds. Originally, the government had indicated the entire test would run as long as three and a half minutes, but current indications are that the shortened audio will reduce the length of the overall EAS test to 45-60 seconds.

While FEMA’s reasoning behind the change is not currently known, I note that the National Cable and Telecommunications Association filed a request with FEMA on October 21, 2011 seeking to delay the national test because many cable systems are not ready for it. The problem is that because the proposed test will use the Presidential Emergency Action Notification code, the video will state that “This is an Emergency Action Notification,” and will not give any indication that it is a test. While the audio will make clear that it is a test, those unable to hear the audio (for example, the deaf/hard of hearing or people in a bar where the TV is on but the sound is turned down) could reasonably conclude that an actual emergency is occurring.

While TV broadcasters will generally be inserting a visual crawl indicating that it is only a test, many cable systems do not have that technical capability. NCTA has therefore asked that the test be delayed while the cable industry explores how best technically to insert a visual message over the EAS test assuring viewers that it is indeed only a test.

Given the massive amount of effort that has gone into setting up and preparing for this first ever national EAS test, as well as in notifying the public that there will be a test, delaying it could generate more confusion than just proceeding with the test. It is therefore possible that FEMA’s decision to shorten the test is a pragmatic compromise between either delaying the test or scaring the daylights out of the deaf and hard of hearing community. Presumably, a shorter message is less likely to cause confusion, as it won’t seem as unusual as an emergency message that runs for over three minutes. At a minimum, it will shorten the period of panic, as those watching will see normal programming resume in less than a minute.

Whether the system can be fully tested by the shorter message is already being debated, and some confusion is now unavoidable, given that that the public and first responders have already been told to expect and plan for a test that runs well over three minutes. At the moment, FEMA is trying to get the word out about the shortened test, hoping to reduce that confusion before November 9th arrives.

UPDATE (1:25pm): The FCC has released a new EAS Handbook in light of the shortened test. The Public Notice announcing the new handbook can be found here, and the new EAS Handbook can be found here. The Public Notice indicates that this new version supersedes the version released last week and should be used for all matters related to the November 9 National EAS Test.

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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:

  • Cable Operator Subject to $25,000 Fine for EAS and Signal Leakage Violations
  • Late-filed Renewals Garner $26,000 Fine

Interfering Signal Leakage Proves Costly for Florida Cable Television Operator

The FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) to the operator of a Florida cable television system for multiple violations of the FCC’s rules. The NAL proposes a $25,000 forfeiture for the system based upon violation of the FCC’s cable signal leakage standards, failure to submit the required registration form to the FCC, and failure to maintain operational Emergency Alert System (“EAS”) equipment.

During a 2011 inspection of the system, agents from the Tampa Office of the FCC’s Enforcement Bureau discovered extensive signal leakage. In order to protect aeronautical frequencies from interference, Sections 76.605 and 76.611 of the FCC’s Rules establish a maximum cable signal leakage standard of 20 microvolts per meter (“µV/m”) for any point in the system and a maximum Cumulative Leak Index (“CLI”) of 64. Inspection of the cable system revealed twenty signal leaks, fourteen of which were over 100 µV/m, with the highest measuring 1,023 µV/m. In addition, the system’s CLI measured 64.88, exceeding the maximum permitted level of 64. The operator also acknowledged the system had not maintained cable leakage logs or performed routine maintenance as required by the FCC. The base forfeiture for these violations is $8,000.

The FCC also found two other violations. In 2010, FCC agents discovered the cable system had not filed its required registration statement with the FCC. In the 2011 inspection, the owner admitted the station had not submitted the required form, and, as of the date of the NAL, had still not filed the form. Section 76.1801 of the FCC’s Rules specifies a base forfeiture of $3,000 for failing to file required forms. Since the system had still not submitted the form more than a year after being instructed to do so, the FCC ordered an upward adjustment of the fine by $1,500.

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In a decision that may cause a fair amount of chaos for program producers, television stations, and cable systems, the FCC yesterday released an Order overturning 298 previously granted closed captioning waivers. According to the Order, the FCC granted only three temporary waivers in the period between 1996, when the captioning requirement was created by Congress, and 2005. However, in 2006, the FCC suddenly granted 303 permanent waivers of the captioning requirement. While the Order indicates that the FCC has received an additional 500 waiver requests since that time, it does not indicate whether any of these later requests have been acted on. It therefore appears that the 298 captioning waivers that were overturned represent the great majority of all outstanding waivers.

Of the 303 waivers granted in 2006, 298 were challenged by a consortium of organizations representing the deaf and hard of hearing. Those appeals had been pending at the FCC for just over five years. During that time, Congress modified the captioning requirements in the Communications Act when it adopted the 21st Century Communications and Video Accessibility Act of 2010 (the “CVAA”). The three significant captioning changes made by the CVAA are (1) the change of the term “undue burden” as the standard for captioning waivers to the term “economically burdensome”, (2) the imposition of a six month time limit (with exceptions) for the FCC to process captioning waiver requests, and (3) the codification in the statute of the FCC’s current practice of considering programming exempt from captioning while a waiver request is pending.

It appears that the need to modify its rules to incorporate these changes refocused the FCC’s attention on the outstanding waiver appeals, leading to the sudden action on the appeals after five years. Ultimately, the FCC concluded that the waivers should not have been granted, as they improperly relied on (1) the noncommercial nature/lack of remunerative value of the programming, (2) the program producers’ nonprofit status, (3) the presumption that waivers would be granted where “the provision of closed captions would curtail other activities important to [the producers’] mission”, (4) the grant of permanent waivers where temporary waivers would be more appropriate, and (5) the failure of the waiver grants “to consider whether petitioners solicited captioning assistance from their video programming distributors.”

This last factor is particular important for TV stations and cable systems. The FCC formally announced in the Order that because these program distributors are the parties actually responsible for ensuring that programming is captioned, “soliciting funds from these responsible entities is necessary to meeting one’s captioning obligations, and … evidence of such solicitation is required before a petitioner may qualify for a captioning exemption.” As a result, these local programming outlets can expect to be solicited by program producers in a very formal way for the funds necessary to caption their programming.

The Order lists the waiver recipients whose waivers have been revoked, and requires that they either file a new request for a waiver by January 18, 2012, or be in compliance with the FCC’s closed captioning rules by January 19, 2012. Those filing a new waiver request will be required to submit current documentation demonstrating that providing closed captions would be economically burdensome given (1) the nature and cost of the closed captioning difficulty/expense, (2) the impact on the operation of the program provider/owner, (3) the financial resources of the program provider/owner, and (4) the type of operations of the program provider/owner, as well as any other factors the petitioner thinks relevant to the request (including alternatives proposed by the petitioner as a reasonable substitute for closed captioning).

It doesn’t take much reading between the lines of the Order to conclude that closed captioning waivers are going to be much more difficult to obtain in the future. Given that 100% of English and Spanish broadcast TV programming must now be captioned (unless it falls into one of the FCC’s categorical exemptions), the FCC’s decision may impose significant hardship on many program producers and the TV stations that carry their programming. At a minimum, the producers whose waivers have been revoked will need to go through the waiver request process again. If their request is not granted, then they, along with program producers who cannot make the necessary waiver showing, will need to begin captioning their programming or cease production and/or distribution of that programming to media outlets governed by the FCC’s captioning rules.

Finally, because of the captioning changes made by the CVAA referenced above, yesterday’s Order also includes a Notice of Proposed Rulemaking in which the FCC seeks comments on how to interpret Congress’s change of the waiver standard language from “undue burden” to “economically burdensome.” The FCC indicates that its tentative conclusion is that Congress did not intend the language change to have a substantive effect upon waiver requests, particularly given that other language in the Communications Act relating to captioning waivers was not changed by the CVAA. The FCC’s request for comments focuses on whether this tentative conclusion is accurate. Those program producers whose waivers were revoked will want to consider submitting comments in this rulemaking, as it will likely end up determining the standard by which any new waiver requests will be judged.