Articles Posted in FCC Enforcement

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:

Headlines:

Spoofed Calls Lead to Multiple $25,000 Fines and Ongoing Criminal Case
Amateur Radio Licensee Fined $25,000 for Intentional Interference
Failure to Timely Request STA Results in $5,000 Fine and Shortened License Term

Spoofing’s No Joke: Two Men Face $25,000 Fine Each for Harassing Phone Call Scheme

The FCC proposed to fine two New York men for apparently using false caller ID numbers – a practice commonly known as “spoofing” – to place harassing phone calls to the ex-wife of one of the men.

The Truth in Caller ID Act of 2009, as codified in Section 227(e) of the Communications Act and Section 64.1604 of the FCC’s Rules, prohibits any person, in connection with any telecommunications service or IP-enabled voice service, to knowingly cause, directly or indirectly, any caller ID service to transmit or display misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.

In September 2015, the National Network to End Domestic Violence contacted the FCC on behalf of one of their clients and explained that someone was using spoofing services to stalk and harass her. The FCC subsequently opened an investigation into the matter.

Using information and call logs provided by the woman, the investigation found that between May 2015 and September 2015, 31 harassing phone calls were made. It found that the callers used a spoofing service provider to make the woman believe she was answering calls from sources such as local jails and prisons, the school district where her child attends school, and her parents’ home. In addition, it found that the callers used a voice modulation feature of the spoofing service to disguise their voices, and conveyed threatening and bizarre messages. For example, calls that spoofed the caller ID information of Sing Sing correctional facility threatened “we are waiting for you.” Other calls referenced personal information specific to the woman and her minor child.

FCC staff subpoenaed call records for the cell phone of a friend of the woman’s ex-husband after the woman told staff that she believed her ex-husband – against whom she had a restraining order during the time period in question – and his close friend were behind the calls. The woman explained to FCC staff that for some of the calls she had used a third-party “unmasking” service to reveal that the true caller ID was that of her ex-husband’s friend, with whom she had no independent relationship. The call records showed that each time the friend called the spoofing service, the woman received a spoofed call. The parent company of the spoofing service confirmed that the friend used its service to make spoofed calls to the woman.

The FCC also found that the ex-husband was directly involved in at least some of the calls. For example, the FCC found that the friend made a spoofed call moments after he was called by the ex-husband, and while he was still on the phone with the ex-husband. The FCC explained that the fact that the ex-husband “did not dial the spoofed calls himself does not absolve him of liability for the harassment and stalking of his ex-wife.”

The Communications Act and the FCC’s Rules authorize a fine of up to $10,000 for each spoofing violation, or three times that amount for each day of a continuing violation, up to a statutory maximum of $1,025,000. The FCC may adjust a fine upward or downward depending on the circumstances of the violation. Citing the “egregious” nature of the violation, the FCC proposed to fine the ex-husband and the friend $25,000 each. The friend was also arrested and charged with stalking and aggravated harassment after the woman filed a complaint with local police.

Haters Gonna Hate: Amateur Radio Licensee Fined $25,000 for Racial Slur-Filled Interference

A California amateur radio licensee received a $25,000 fine from the FCC for intentionally interfering with the transmissions of other amateurs radio operators and transmitting prohibited communications, including music.

Section 333 of the Communications Act states that “[n]o person shall willfully or maliciously interfere with or cause interference to any radio communications of any stations licensed or authorized by or under the Act or operated by the United States Government.” Similarly, Section 97.101(d) of the FCC’s Rules states that “[n]o amateur operator shall willfully or maliciously interfere with or cause interference to any radio communication or signal.” In addition, Section 97.113(a)(4) of the Rules states that “[n]o amateur station shall transmit . . . [m]usic using a phone emission except as specifically provided elsewhere in this section.”

After receiving multiple complaints of interference, primarily from the Western Amateur Radio Friendship Association (“WARFA”), FCC field agents, with assistance from the FCC’s High Frequency Direction Finding (“HFDF”) Center, conducted investigations to find the source of the interference. On August 25 and 27, 2015, between 7:45 p.m. and 9:45 p.m., the agents observed at least 12 instances of the licensee intentionally transmitting on top of, and interrupting, WARFA amateurs. The interruptions lasted from 30 seconds to at least 4 minutes, and included noises, recordings, music, and talking over WARFA users. The transmissions included racial, ethnic, and sexual slurs. The licensee ended his transmissions each night when WARFA members ended their transmissions.

Published on: July 29, 2016

FCC Enforcement Monitor ~ July 2016

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:

Headlines:

FCC Cancels $3,000 Proposed Fine After Discovering TV Licensee Overwrote Children’s Programming Reports
Educational FM Licensee Agrees to Pay Reduced Fine of $2,250 for Multiple Violations
Failure to Understand FCC’s Filing System Nets $1,500 Fine

Licensee’s Discovery Leads FCC to Cancel $3,000 Proposed Fine

The FCC cancelled a $3,000 proposed fine against a New York TV station after the licensee discovered that it inadvertently overwrote three Children’s Television Programming Reports. The FCC had previously proposed to fine the licensee for the untimely filing of the three Reports.

Section 73.3256 of the FCC’s Rules requires each commercial broadcast station to maintain a public inspection file containing specific information related to station operations. Subsection 73.3526(e)(11)(iii) of the rule requires licensees to prepare and place in their public inspection files a Children’s Television Programming Report for each calendar quarter showing, among other things, the efforts made during that three-month period to serve the educational and informational needs of children.

On January 30, 2015, the licensee filed a license renewal application in which it admitted that it failed to file in a timely manner Children’s Television Programming Reports for three quarters between 2012 and 2013. The licensee argued that it was unable to timely upload the Reports because of problems with the FCC’s website and computer servers.

The FCC rejected the licensee’s claim that FCC server problems prevented timely filing, and issued a Notice of Apparent Liability for Forfeiture (“NAL”) proposing a $3,000 fine for the late filings. The FCC explained that it was unaware of any server problems that would have prevented timely filing during the quarters at issue, and the licensee failed to provide any evidence to support its claim.

In its response to the NAL, the licensee asserted that after looking into the matter further, it found that it had in fact timely filed the Children’s Television Programming Reports. The licensee included with its response a declaration signed by the employee in charge of filing such reports. The employee stated that the three reports in question were timely filed, but inadvertently overwritten later. Upon discovering that the reports had been overwritten, the station refiled the reports, causing them to appear as though they were filed late. The licensee noted that it had since implemented safeguards to prevent reports from being overwritten in the future.

Based on the new information, the FCC was persuaded that the reports had been timely filed, and therefore rescinded the NAL and cancelled the proposed $3,000 fine.

FCC Reduces $18,000 Fine to $2,250 in Consent Decree With Educational FM Station

The FCC entered a Consent Decree with a North Carolina noncommercial educational (“NCE”) FM licensee, terminating the investigation of the licensee’s multiple alleged violations. The alleged violations included: (1) failure to notify the FCC that the station had gone silent for ten or more days and failure to seek special temporary authority (“STA”) when four of those periods of silence lasted more than 30 days; (2) failure to retain all required documentation in the station’s public inspection file; and (3) failure to file biennial ownership reports. Under the terms of the Consent Decree, the licensee agreed to pay a $2,250 fine and abide by a compliance plan.

Published on: June 30, 2016

FCC Enforcement Monitor ~ June 2016

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:

Headlines:

FCC Refuses TV Licensee’s Request to Defer $15,000 Fine Until After Incentive Auction
FCC Proposes $20,000 Fine for Radio Licensee’s Violation of Multiple Ownership Rule
FCC Imposes $12,000 Fine and Short-Term License Renewal for Failure to Maintain Public Inspection File and File Ownership Reports

Red Light Blues: FCC Refuses TV Licensee’s Request to Defer Fine Collection Until After Incentive Auction

The FCC’s Media Bureau rejected a Kansas TV licensee’s request to defer a $15,000 fine for failing to timely file fourteen Children’s Television Programming Reports, and for failing to disclose the violations in its license renewal application.

Section 73.3256 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) of the rule requires licensees to prepare and place in their public inspection files a Children’s Television Programming Report for each calendar quarter showing, among other things, the efforts made during that three-month period to serve the educational and informational needs of children.

In addition, Section 73.3514(a) of the FCC’s Rules requires licensees to include all information requested by an application form when filing it with the FCC. The license renewal application form requires licensees to certify that they have complied with Section 73.3526 and have timely filed their Children’s Television Programming Reports with the FCC.

In April 2016, the FCC issued a Notice of Apparent Liability (“NAL”) to the licensee, asserting that since 2011 the licensee had filed fourteen Children’s Television Programming Reports late, and had subsequently failed to report those violations in its license renewal application. After determining that these actions constituted violations of Sections 73.3526(e)(11)(iii) and 73.3514(a), the FCC proposed a fine of $12,000 for the fourteen late reports and another $3,000 for failing to disclose the violations in the license renewal application—for a total proposed fine of $15,000.

The licensee did not dispute the violations. Instead, it requested a waiver of the FCC’s red light rule, which bars stations from receiving certain benefits if they have an outstanding balance owed to the FCC. In October 2015, the FCC waived the red right rule to allow broadcasters that owed debts to the FCC to participate in the Spectrum Auction.

In requesting a waiver of the red light rule and deferral of the fine until after the Auction concludes, the licensee argued that while it did not owe money to the FCC when it filed its reverse auction application, the current $15,000 fine could make it subject to the red light rule in the near future because it is unable to pay that fine. The licensee explained that if it were a winning bidder in the Auction, it would then be able to pay the fine. Alternatively, the licensee requested a 30 day extension to pay the proposed fine in the event that it was unsuccessful in the Auction.

The FCC rejected the licensee’s requests. In doing so, it first noted that the FCC waived the red light rule for only a very limited purpose at the start of the Auction. Second, it stated that since the licensee admitted that it was not subject to a red light restriction when it filed its reverse auction application and is not currently subject to one, and given that the licensee had provided no documentation showing its inability to pay the fine, any request for a waiver would be prospective and speculative.

The FCC indicated the licensee therefore had two options: (i) pay the proposed fine in full, or (ii) seek a reduction or cancellation. Because the licensee did neither, and instead merely provided a statement about its inability to pay the fine without any supporting documentation, the FCC ordered the licensee to pay the $15,000 fine.

Too Soon? Radio Licensee Faces $20,000 Fine for Premature Implementation of Time Brokerage Agreement

The FCC proposed to fine a New York radio licensee $20,000 for implementing a Time Brokerage Agreement (“TBA”) that violated the Commission’s multiple ownership rule before the FCC had an opportunity to rule on the licensee’s waiver request. Continue reading →

Published on: May 31, 2016

FCC Enforcement Monitor ~ May 2016

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:

Headlines:

FCC Enforcement Bureau and Long-Distance Provider Agree to $100,000 Settlement for Violations of FCC’s Rural Call Completion Rules
FCC Cancels $3,000 Fine Against TV Licensee for Untimely Kidvid Filings, Upholds $10,000 Fine for Missing Issues/Programs Lists
FM Construction Permit Auction Winner Fined $3,000 For Late Application

Dropped Call of the Wild: Investigation of Rural Call Problems Ends With $100,000 Consent Decree

The FCC’s Enforcement Bureau entered into a Consent Decree with a Utah-based long distance carrier to resolve an investigation into whether the carrier failed to sufficiently respond to a rural customer’s complaints of poor call quality and failed to cooperate with the FCC’s resulting investigation.

The FCC has adopted several “Rural Call Completion Rules” in recent years to address poor call quality and call completion problems in rural and other high-cost areas. The Commission clarified in a 2012 declaratory ruling that a carrier violates Section 201 of the Communications Act of 1934 when it knows or should know that calls are not being completed to certain areas and fails to correct the problem or fails to ensure that its intermediate providers correct the problem.

The FCC has also determined that practices that allow lower quality service to rural or traditionally high-cost areas to persist constitute unjust or unreasonable discrimination (based on locality) in violation of Section 202 of the Communications Act. Further, the FCC has interpreted Section 208 of the Act and Section 1.717 of the Commission’s Rules to require that a carrier satisfy (or adequately explain why it cannot satisfy) any informal rural call completion complaints.

In December 2014, a consumer filed an informal complaint with the FCC detailing ongoing problems with receiving work calls. The calls were sent over the carrier’s long distance network to the consumer’s home office, which is served by an intermediate rural local exchange carrier. The carrier investigated the matter and explained in its response to the informal complaint that (1) the consumer had not responded to a follow-up email about the complaint, and (2) the consumer was not its customer.

The carrier took action in March 2015—after the FCC reminded the carrier of its obligations to address rural call quality problems—but the problem recurred. The consumer subsequently filed additional complaints alleging continued call problems in May and June of 2015. Finding that the carrier failed to sufficiently address and resolve the call quality problems with its intermediate provider until late July 2015, the FCC issued a Letter of Inquiry to the carrier and opened an investigation.

To settle the matter, the carrier entered into a Consent Decree with the FCC, wherein the carrier: (1) admitted that it failed to ensure call quality from its intermediate providers and that it did not cooperate with the FCC’s investigation; (2) agreed to pay a $100,000 civil penalty; and (3) agreed to implement a compliance plan going forward. As part of the plan, the carrier must establish operating procedures and training on the Rural Call Completion Rules, and file regular compliance reports with the FCC during the three-year compliance period.

Island Jam: Guam TV Station Successfully Appeals Proposed Fine for Late Kidvid Reports, But Remains on the Hook for Issues/Programs List Violations

The FCC’s Media Bureau cancelled a proposed $3,000 fine against a Guam TV licensee for failing to timely file five Children’s Television Programming Reports, but upheld a $10,000 fine against the licensee for failing to place fifteen Quarterly Issues/Programs Lists in the station’s public inspection file. The FCC also admonished the licensee for its failure to upload copies of its Quarterly Issues/Programs Lists that were in the station’s local file prior to August 2, 2012.

Published on: April 30, 2016

FCC Enforcement Monitor ~ April 2016

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:

Class A TV Licensee Hit With $89,200 Fine for Dodging FCC Inspectors
Student-Run FM Station Faces $12,000 Fine and Shortened License Term for Public Inspection File Violations
Wireless Synchronized Clock Company Agrees to Pay $12,000 for Violating License Terms

FCC Throws the ($89,200) Book at Class A Licensee for Evading Main Studio Inspections

The FCC’s Enforcement Bureau imposed a fine of $89,200 against a Philadelphia Class A TV licensee for failing to (1) make its station available for inspection by FCC agents on multiple occasions, (2) maintain a fully staffed main studio, and (3) operate the station’s transmitter from its authorized location.

Section 73.1225(a) of the FCC’s Rules requires broadcast licensees to make a station “available for inspection by representatives of the FCC during the station’s business hours, or at any time it is in operation.” In addition, Section 73.1125(a) of the Rules has been interpreted by the FCC to require broadcast licensees to maintain a main studio with a “meaningful management and staff presence” during normal business hours. Finally, Section 73.1350(a) of the Rules requires a broadcast licensee to “maintain[] and operat[e] its broadcast station in a manner which complies with the technical rules . . . and in accordance with the terms of the station authorization.”

In August 2011, FCC agents attempted to inspect the station’s main studio. After observing that the main studio was inaccessible due to a locked gate, the agents called the station manager and requested access to inspect the main studio. Ten minutes later, the station manager emerged and informed the agents that he could not facilitate the inspection because he was leaving for a medical appointment, and requested that the agents return the next day. When asked about staffing, the station manager said that no one else was available to facilitate the inspection. One of the agents called the sole principal of the station and advised him that the station manager had failed to make the station available for inspection, and asked the principal to call the agent back. The principal did not return the phone call.

Over one month later, in September 2011, the agents returned to the station to inspect the main studio. The station manager appeared at the locked gate, and asked the agents to wait as he returned to the building. After waiting for ten minutes, the agents left. The agents returned that afternoon and found that the gate was still locked. An agent called the station manager, who said the gate was locked for security purposes and that the public must contact the station to obtain access. However, the agents noted that there was no contact information on the gate. An agent called the sole principal about the second failed attempt to inspect the studio, and again did not receive a return phone call.

In addition to the two failed inspection attempts, FCC agents found in March 2012 that the station’s antenna was actually 0.2 miles from the site listed in the station’s license. The agents determined that the station had operated from the unauthorized location for approximately eight years.

The FCC subsequently issued a Notice of Apparent Liability (“NAL”), proposing an $89,200 fine against the station. The base fine for failing to make a station available for inspection is $7,000. However, due to the “unacceptable” conduct of the station, the FCC used its discretion under Section 503(b)(2)(A) of the Communications Act to adjust the proposed fine upward to the maximum amount allowed under the Act: $37,500 for each of the two failed inspections. The FCC also proposed an upward adjustment of the base fine for operating the station from an unauthorized location, from $4,000 to $7,200. In addition, the FCC proposed a $7,000 fine (the base fine amount) for the violation of the main studio rule, for a total fine of $89,200.

Published on: March 31, 2016

FCC Enforcement Monitor ~ March 2016

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:

Noncommercial FM Broadcaster Fined $10,000 for Public Inspection File Violations
TV Licensee Faces $20,000 Fine for Untimely Filing of 16 Children’s TV Programming Reports
Man Agrees to $2,360 Fine for Using GPS Jamming Device at Newark Airport

FCC Refuses to Take Pity on “Mom and Pop” FM Public Broadcaster With Public Inspection File Violations

The FCC’s Media Bureau denied a New York noncommercial FM licensee’s Petition for Reconsideration of a March 2015 Forfeiture Order, affirming a $10,000 fine against the licensee for failing to place 13 Quarterly Issues/Programs Lists in the station’s public inspection file.

Section 73.3527 of the FCC’s Rules requires noncommercial educational licensees to maintain a public inspection file containing specific types of information related to station operations. Among the materials required for inclusion in the file are the station’s Quarterly Issues/Programs Lists, which must be retained until final Commission action on the station’s next license renewal application. Issues/Program Lists detail programs that have provided the station’s most significant treatment of community issues during the preceding quarter.

In February 2014, the licensee filed an application for renewal of the station’s license, which it had acquired from a university in 2010 after the university decided to defund the station. In the application, the licensee admitted that the station’s public inspection file was missing 13 Quarterly Issues/Programs Lists, commencing with the licensee’s acquisition of the station in 2010.

In March 2015, the FCC issued a Notice of Apparent Liability for Forfeiture in the amount of $10,000, the base fine for a public inspection file violation. The licensee filed a Petition for Reconsideration, urging the FCC to withdraw the fine. While the licensee did not dispute the violations, it explained that it had a history of compliance with the FCC’s rules, and that it was the public radio equivalent of a “mom-and-pop-operation.” It further explained that it only had several employees and volunteers, including an unpaid manager, and was under constant financial strain.

In response, the FCC contacted the station on three separate occasions in 2015 to request that the licensee provide documentation supporting its claim of financial hardship. After receiving no response to these requests, the FCC chose not to reduce the fine based on financial hardship when it issued the resulting Forfeiture Order. In addition, the FCC chose not to reduce the fine based on the station’s history of compliance with the rules because of the “extensive” nature of the violations. Ultimately, however, the FCC stated that it would grant the license renewal application upon the conclusion of the forfeiture proceeding if “there are no issues other than the violations discussed here that would preclude grant of the application.”

Sour Sixteen: Failing to Timely File 16 Children’s TV Programming Reports Nets Proposed $20,000 Fine

A Texas TV licensee is facing a $20,000 fine for failing to timely file sixteen 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 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. Continue reading →

Published on: February 26, 2016

FCC Enforcement Monitor ~ February 2016

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 Fines Radio Licensee $10,500 Despite Claims of Public File Sabotage
Unlocked Gate Costs AM Licensee $7,000
Class A Licensee Faces Hobson’s Choice: Pay $12,000 Fine or Revert to Low Power Status

Whodunit, Who Cares? FCC Fines Radio Licensee $10,500 for Missing Issues/Program Lists

The FCC’s Enforcement Bureau denied a licensee’s Petition for Reconsideration of a June 2015 Forfeiture Order, affirming the $10,500 fine against the licensee of two Michigan radio stations (one AM and one FM) for failing to place five Quarterly Issues/Programs Lists in the stations’ public inspection files, and for failing to immediately notify the FCC upon a change of tower ownership.

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. Under Subsection 73.3526(e)(12), a licensee must create a list of significant issues affecting its viewing area in the past quarter and the programs it aired during that quarter to address those issues. The list must then be placed in the station’s public inspection file by the tenth day of the month following that quarter. In addition, Section 17.57 of the Rules requires tower owners to immediately notify the FCC of any change in ownership information.

In February 2010, the licensee acquired the stations and accompanying tower from another company. In December 2010, the licensee filed a notification of change in tower ownership. However, the FCC promptly rejected the application as deficient and directed the licensee to refile its ownership change notification.

During a September 2011 inspection, an FCC agent found that the licensee’s public inspection files were missing five quarters of Issues/Programs Lists. The agent also determined that the ownership change notification had never been refiled. The FCC subsequently issued a Notice of Apparent Liability for these violations and proposed a $13,000 fine—$10,000 for the missing Issues/Programs Lists and $3,000 for the absent ownership change notification.

The licensee did not contest the violations, but asked for a cancellation or reduction of the fine, arguing that (1) it made good faith attempts to correct the violations, (2) the missing Issues/Programs Lists had been removed by a third party, (3) it was unable to pay the fine due to financial difficulties, and (4) it had a history of compliance with the FCC’s Rules. In its June 2015 Forfeiture Order, the FCC reduced the fine to $10,500 due to the licensee’s history of compliance. However, the FCC found no basis for any further reduction. It explained that, while it may reduce a proposed penalty when a violation arose “just prior” to an FCC inspection, the Issues/Programs Lists were allegedly removed more than two months before the inspection—leaving the licensee adequate time to identify and correct the deficiency. The FCC also stated that the licensee had not shown the “severe financial distress” necessary to warrant a reduction, and that good faith efforts to correct violations must be made prior to notification of the violation to be considered as a basis for a fine reduction.

The licensee subsequently filed a Petition for Reconsideration, arguing that the Issues/Program Lists were in the public inspection file until the general manager of its major competitor deliberately removed them. Because the Petition failed to demonstrate a material error in the Forfeiture Order or raise any new facts or arguments, the FCC chose not to address the merits of the licensee’s arguments. The FCC noted, however, that even had it considered the merits of the licensee’s Petition, it still would have found no basis for reconsideration, explaining that the alleged third-party removal of the lists did not diminish the licensee’s liability for failing to identify and correct the deficiency in the two months between the alleged removal and the inspection.

The Price of Convenience: AM Licensee Is Fined $7,000 for Leaving the Gate to Its Tower Unlocked for Contractors

The FCC’s Enforcement Bureau upheld a Forfeiture Order against a New York AM licensee for leaving the gate to its tower unlocked for several days so that contractors could have access. Section 73.49 of the FCC’s Rules requires towers having radio frequency potential at the base to be enclosed within effective locked fences or other enclosures. Continue reading →

Published on: February 15, 2016

The FCC Has Written Good Contest Rules, Now You Should Too

By Lauren Lynch Flick

Lauren Lynch Flick

The FCC’s new Licensee-Conducted Contest Rule became effective this past Friday. Under the new rule, a broadcast licensee conducting a contest still has the obligation to disclose the material terms of the contest “fully and accurately” and to conduct the contest substantially as announced. However, as we wrote last September, the new rule allows broadcasters to meet these requirements by posting the contest terms on their websites rather than reading them on-air. To take advantage of this new flexibility, broadcasters must:

Post the terms on the station’s or licensee’s website, or if neither the station nor the licensee has a website, on a free website that is available to the public 24/7, without registration;
Broadcast the website address with sufficient information for a consumer to find the terms easily, using simple instructions or natural language;
Broadcast the website address periodically throughout the term of the contest;
Establish a conspicuous link or tab on the home page of the website that takes consumers to the contest terms;
Maintain the terms on the website for at least 30 days after the contest has ended and conspicuously mark those that are expired, including the date a winner was selected;
On the rare occasions that a change in terms occurs during the contest, announce the changes on-air within 24 hours and periodically thereafter, and direct participants to the written terms on the website; and
Assure that the contest rules posted online conform to those announced on-air.

The effective date of the new rule has been eagerly anticipated by broadcasters as the change grants them more flexibility in announcing contest terms, avoids long and complicated contest announcements on-air, and permits participants to review the rules at their leisure. However, in making the change, the FCC noted that “[a]s with all elements of contest-related announcements, the burden is on the broadcaster to inform the public, not on the public to discern the message.”

Indeed, the law views the rules of a contest or sweepstakes to be a contract between the sponsor (station) and anyone who enters the contest, or even anyone who tries to enter and fails to do so successfully. If the sum total of your on-air contest rules are “be the 103rd caller after X song is played” and a vague “station policy” somewhere on the website that says you can only win once every 30 days, you have left a lot out of your “contract.” For example, when a station ran a contest on-air like the one above and did not get many callers, the DJ simply awarded the prize to the last person to call in after hours of trying to attract more callers. The station was fined by the FCC because it did not run the contest substantially as advertised. Properly written contest rules should account for such situations, as well as other foreseeable developments, such as the phone lines going down after the trigger song has been played. A station with contest rules that don’t address likely (or even unlikely) contest developments is inviting challenges from both contestants and regulators.

In that regard, as we noted in FCC Proposes to Clear Airwaves of Boring Contest Disclosures, But State Issues Remain, stations should remember that the FCC is not the only regulator watching out for contest and sweepstakes violations. For example, some states’ contest laws require that all announced prizes be awarded in order to prevent “bait and switch” contests. For stations giving away “time sensitive” prizes such as concert tickets that have to be used on a specific date, the rules should address the situation where a winner is chosen but then turns down the prize or simply does not claim it because they cannot attend on the date specified. If the rules say that an alternate winner will be chosen after 10 days, there may not be enough time left before the concert to award the prize. The station with poorly written contest rules must then choose between violating the law by failing to award a prize, or violating the law by failing to conduct the contest in accordance with the announced rules. Badly-drafted contest rules are a liability for any business, but are worse for broadcasters, as in addition to all of the state and federal laws governing contests, broadcasters are uniquely subject to the FCC’s contest oversight as well.

Finally, while you might imagine that contest complaints come from those who lost the contest (and indeed they often do), many come from contest winners. While professional contestants who enter every contest will complain about the valuation placed on a prize for tax purposes, first-time winners are more likely to complain about having to sign a release to claim the prize, or where the prize is large, having to provide the station with their Social Security Number, appear in person, or attend a further event, such as the day when all the winners of keys must try them out in the grand prize car. These obligations need to be clear in the contest rules, not just to avoid liability, but to ensure the station is able to get the promotional value it anticipated from the contest. Contestants who demand anonymity and refuse to sign releases greatly undercut the promotional value of a big contest.

The bottom line is, now that the FCC will let you post your rules online for contestants and regulators to scrutinize, you need to ensure you have rules that can withstand scrutiny.

Published on: January 31, 2016

FCC Enforcement Monitor

January 2016

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:

TV Licensee Agrees to Pay $18,000 for Public Inspection File Violations
FM Translator Licensee Faces $9,000 Fine for False Certification and Unauthorized Operation Violations
AM Station Licensee Pays $10,000 to End Investigation into Alleged Ownership Violations

Mistakes Over Off-Air Time in Public Inspection File Cost TV Licensee $18,000

The FCC’s Media Bureau entered into a Consent Decree with a Las Vegas Class A television licensee to resolve an investigation into whether the licensee violated the FCC’s Rules by improperly indicating on four Children’s Television Programming Reports and TV Issues/Programs Lists that it was off-air, and failing to prepare mandatory certifications of Class A eligibility for over five years.

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 TV licensees to prepare and place in their public files a Children’s Television Programming Report for each calendar quarter showing, among other things, the efforts made during that three-month period to serve the educational and informational needs of children. In addition, Subsection 73.3526(e)(11)(i) requires TV licensees to place in their 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. Also, Subsection 73.3526(e)(17) requires each Class A television station to include in its public file documentation sufficient to demonstrate that it continues to meet the Class A eligibility requirements as set forth in Section 73.6001.

On May 28, 2014, the licensee filed its station’s license renewal application. In the process of evaluating the application, FCC staff found that the licensee indicated the station was off-air in its Children’s Television Reports and Issues/Programs Lists for two quarters during which it was on the air for a portion of the quarter, and for two quarters during which the station did not have Special Temporary Authorization (“STA”) to go off-air. In addition, the station failed to prepare any Class A certifications during its license term, which began in the third quarter of 2009.

The licensee explained that it had mistakenly indicated that the station was off-air in the Children’s Television Reports and Issues/Programs Lists filed for the last three quarters of 2010 because its compliance official mistook the station’s engineering STA for an STA to go off-air. With regard to the first quarter 2012 reports, the licensee explained that the compliance official mistook another station’s STA to go off-air for this station’s STA.

To resolve the investigation, the licensee admitted to the violations and agreed to pay an $18,000 fine. The licensee also agreed to a two-year compliance plan, which directs the licensee to institute management checks, training, and other measures designed to prevent a re-occurrence of the violations. Despite the imposition of a fine and compliance plan, the FCC renewed the station’s license, finding that the licensee met the minimum qualifications to hold an FCC license, and that grant of the license renewal application was in the public interest.

FCC Proposes $9,000 Fine for FM Translator Licensee Based on False Certification and Unauthorized Operation Violations

The FCC’s Media Bureau proposed to fine a Texas FM translator licensee $9,000 for falsely certifying in a license application that its translator was constructed as specified in its construction permit, and for operating the translator at variance from its license. The FCC also admonished the licensee for including incorrect information in a related application.

Published on: December 30, 2015

FCC Enforcement Monitor