Articles Posted in FCC Enforcement

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April 2014

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 Proposes $12,000 in Fines for Contest Violations
  • $20,000 Fine for Unlicensed Operation and Interference
  • Violations of Sponsorship Identification and Indecency Rules Lead to $15,000 Consent Decree

Changing Rules and Delay in Conducting Contest Lead to $12,000 in Fines

Late last month, the FCC’s Enforcement Bureau issued two essentially identical Notices of Apparent Liability for Forfeiture (“NALs”) against two radio station licensees for failure to conduct a contest as advertised. Although the stations have different licensees, one licensee provided programming to the second licensee’s station through a time brokerage agreement. The brokering station’s response to a letter of inquiry (“LOI”) addressed both licensees’ actions with regard to the contest. In the subsequent NALs, the FCC’s Enforcement Bureau proposed a $4,000 fine against the brokered licensee and an $8,000 fine against the brokering licensee.

In July of 2009, the FCC received a complaint that several radio stations held a weekly contest called “Par 3 Shoot Out” but did not conduct the contest substantially as announced or advertised. Specifically, the complaint maintained that at least one participant did not receive a promised prize of a golf hat and was not entered into a drawing to win a car or other prizes (as was promised in the contest’s rules). About four months later, the FCC issued an LOI to the licensee conducting the contest about the claims made in the complaint. In its response to the LOI, the licensee conducting the contest indicated that the contest consisted of two phases. The first was an 18-week, online golf competition where the highest-scoring contestant each week would win a hat from a golf club. Each weekly winner and one write-in contestant would be able to participate in the second phase of the contest, a real golf competition consisting of taking one shot at a three par hole. As was publicized online, the prize for the winner of the second phase was a $350 golf store gift certificate, and if anyone hit a hole-in-one, they would win a Lexus car.

According to the brokering licensee, the first phase of the contest took place between June and November 2008. The contest took place entirely online, and although the second phase was scheduled to begin in November 2008, it was postponed due to inclement weather and ultimately did not occur at all because the employee who was tasked with running the live golf competition was fired, and the remaining staff never resumed the contest. The brokering licensee further indicated that it forgot about the contest until it received the FCC’s LOI, and, after receiving the LOI, the second phase of the contest occurred and was completed by January 2010. The brokering licensee indicated that it had provided additional prizes of a $25 golf store gift card and a catered lunch to each finalist in the second phase given the delay in conducting the contest.

Section 73.1216 of the FCC’s Rules requires that a station-sponsored contest be conducted “substantially as announced or advertised” and must fully and accurately disclose the “material terms,” including eligibility restrictions, methods of selecting winners, and the extent, nature and value of prizes involved in a contest.

The Enforcement Bureau determined that the contest was not conducted as announced or advertised because the rules were changed during the course of the contest and the contest was not conducted within the promised time frame. The Bureau further found that the licensees failed to fully disclose the material terms of the contest as required by the Commission’s rules. According to the Bureau, the on-air announcements broadcast by the stations failed to mention all of the prizes the licensee planned to award and failed to describe any of the procedures regarding how prizes would be awarded or how the winners would be picked. The brokering licensee argued in its response to the LOI that the full rules were included online, which was a better way to make sure that potential contest participants were not confused. However, the Bureau found that while licensees can supplement broadcast announcements with online rules, online announcements are not a substitute for on-air announcements.

The base fine for failure to conduct a contest as announced is $4,000. The Bureau determined that, contrary to the argument presented in response to the LOI, “neither negligence nor inadvertence” due to the overseeing employee’s departure “can absolve licensees of liability.” The Bureau also said that providing additional prizes to make up for the delay does not overcome the violation of Section 73.1216. Finally, the FCC found that the licensees had failed to disclose the material terms of the contest because the advertisements that were broadcast over the air did not mention certain prizes.

The FCC proposed to impose the base fine amount of $4,000 against the time-brokered station after determining that the licensee had violated Section 73.1216. For the brokering licensee, the FCC proposed an increased fine of $8,000 because of the licensee’s “pattern of violative conduct, and because it conducted the Contest over four stations, not one, thus posing harm to a larger audience.”

Nine Years of Unauthorized Operation and Interference to Wireless Operator Lead to Large Fine

The FCC recently issued a Forfeiture Order to the former licensee of a Private Land Mobile Radio Service (“PLMRS”) station. The Forfeiture Order follows an NAL that the FCC released in July of 2012 proposing a fine of $20,000 for the former licensee of the facility for operating without a license for nine years and causing interference to another wireless service provider.

The former licensee initially received the license for the PLMRS station in April 1997 for a five-year term. Three months before the expiration of the license, the FCC sent the licensee a reminder to renew the license, but the licensee never filed a renewal application. Therefore, the license expired in April of 2002. Nevertheless, the licensee continued operating the station, and on July 31, 2011, filed a request for Special Temporary Authority (“STA”) with the Wireless Telecommunications Bureau of the FCC. The licensee stated in the application that it had recently discovered that its license had expired and that it needed an STA to continue operating the station. The Wireless Bureau granted the STA three days later for a period of six months, until the end of January 2012. Continue reading →

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March 2014

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 Proposes $40,000 Fine for Public Inspection File/License Renewal Violations
  • Short-Term License Renewal and Hefty Fine for Missing QIP Lists
  • $5,000 Fine for FM Station’s Failure to Maintain Minimum Operating Hours


Failure to Disclose Rules Violations Leads to $40,000 Fine

Late last month, the FCC issued two essentially identical orders against co-owned Milwaukee and Chicago Class A TV stations in response to a number of missing Quarterly Issues/Programs Lists and Children’s Television Programming Reports and for not reporting the missing issues/programs lists in the stations’ license renewal applications. The FCC’s Media Bureau proposed a $20,000 fine against each station, for a total fine of $40,000.

In late December of last year, the FCC issued Notices of Apparent Liability for Forfeiture (“NAL”) for the two stations, noting that the stations had mentioned in their license renewal applications that they had failed to timely file numerous Children’s Television Programming Reports, but had not disclosed the absence from their online public files of over a dozen (each) Quarterly Issues/Program Lists. Section 73.3526 of the FCC’s Rules requires licensees to maintain information about station operations in their public inspection files so the public can obtain “timely information about the station at regular intervals.”

The base fine for failure to file a required form is $3,000, and the base fine for public file violations is $10,000. After considering the facts, the FCC concluded in each NAL that the respective station was liable for $9,000 for the missing Quarterly Issues/Programs Lists, $9,000 for the missing Children’s Television Programming Reports, and an additional $2,000 for failing to disclose the missing Quarterly Issues/Program Lists in their renewal applications.

After receiving the NALs, each station requested that the fine be reduced due to an inability to pay. The FCC will not consider reducing a fine based on a claimed inability to pay unless the licensee submits federal tax returns for the last three years, financial statements, or other documentation that accurately demonstrates its financial status. In this case, each station submitted appropriate documentation about its financial condition. However, the FCC was not persuaded that the amount of the fines exceeded each station’s ability to pay, and declined to reduce the fines.

Public Inspection File Violations Lead to $46,000 in Fines and Limited License Terms
In connection with recent license renewal applications, the FCC issued four essentially identical Memorandum Opinions and Orders and Notices of Apparent Liability for Forfeiture, resulting in $46,000 in fines for a Washington radio licensee. In addition, three of the licensee’s four stations’ license renewal applications were granted for only a four-year term rather than the normal eight-year term.

The first three of the licensee’s stations were missing, respectively, 24, 26, and 20 Quarterly Issues/Programs Lists for various periods during the license term. The fourth station’s public inspection file was missing 12 reports for a two-year period spanning from 2006 to 2008. Continue reading →

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There was quite a stir today when the FCC, despite being closed for a snow day, issued a Notice of Apparent Liability proposing very large fines against Viacom ($1,120,000), NBCUniversal ($530,000), and ESPN ($280,000) for transmitting false EAS alert tones. According to the FCC, all three aired an ad for the movie Olympus Has Fallen that contained a false EAS alert tone, with Viacom airing it 108 times on seven of its cable networks, NBCUniversal airing it 38 times on seven of its cable networks, and ESPN airing it 13 times on three of its cable networks.

The size of the fines certainly drew some attention. Probably not helping the situation was the ad’s inclusion of the onscreen text “THIS IS NOT A TEST” and “THIS IS NOT A DRILL” while sounding the EAS tone. The FCC launched the investigation after receiving complaints from the public.

All three entities raised a variety of arguments that were uniformly rejected by the FCC, including that “they had inadequate notice of the requirements and applicability of the rules with respect to EAS violations.” What particularly caught my eye, however, was that all three indicated the ad had cleared an internal review before airing, and in each case, those handling the internal review were apparently unaware of Section 325 of the Communications Act (prohibiting transmission of a “false or fraudulent signal of distress”) and Section 11.45 of the FCC’s Rules, which states that “No person may transmit or cause to transmit the EAS codes or Attention Signal, or a recording or simulation thereof, in any circumstance other than in an actual National, State or Local Area emergency or authorized test of the EAS.”

Back in 2010, I wrote a post titled EAS False Alerts in Radio Ads and Other Reasons to Panic that discussed the evolution of the FCC’s concerns about false emergency tones in media, which originally centered on sirens, then on Emergency Broadcast System tones, and now on the Emergency Alert System’s digital squeals. Two months later, I found myself writing about it again (The Phantom Menace: Return of the EAS False Alerts) when a TV ad for the movie Skyline was distributed for airing with a false EAS tone included in it.

That was the beginning of what has since become a clear trend. Those initial posts warned broadcasters and cable programmers to avoid airing specific ads with false EAS tones, but were not connected to any adverse action by the FCC. After three years of EAS tone tranquility, the issue reemerged in 2013 when hackers managed to commandeer via Internet the EAS equipment of some Michigan and Montana TV stations to send out false EAS alert warnings of a zombie attack. The result was a rapid public notice from the FCC instructing EAS participants to change their EAS passwords and ensure their firewalls are functioning (covered in my posts FCC Urges IMMEDIATE Action to Prevent Further Fake EAS Alerts and EAS Alerts and the Zombie Apocalypse Make Skynet a Reality), but no fines.

From there we moved in a strange direction when the Federal Emergency Management Agency distributed a public service announcement seeking to educate the public about the Emergency Alert System, but used an EAS tone to get that message across. Because it did not involve an actual emergency nor a test of the EAS system, the PSA violated the FCC’s rule against false EAS tones and broadcasters had no choice but to decline to air it. The matter was resolved when the FCC quickly rushed through a one-year waiver permitting the FEMA ad to be aired (Stations Find Out When Airing a Fake EAS Tone Is Okay).

Late last year, however, the evolution of the FCC’s treatment of false EAS alerts turned dark (FCC Reaches Tipping Point on False EAS Alerts) when the FCC issued the first financial penalties for false EAS alerts. The FCC proposed a $25,000 fine for Turner Broadcasting and entered into a $39,000 consent decree with a Kentucky radio station for airing false EAS alert tones. The FCC indicated at the time that other investigations were ongoing, and more fines might be on the way.

We didn’t have to wait long, as just two months later, the FCC upped the ante, proposing a fine of $200,000 against Turner Broadcasting for again airing false EAS alert tones, this time on its Adult Swim network. The size of the fine was startling, and according to the FCC, was based upon the nationwide reach of the false EAS tone ad, as well as the fact that Turner had indicated in connection with its earlier $25,000 fine that it had put in place mechanisms to prevent such an event from happening again. When it did happen again, the FCC didn’t hesitate to assess the $200,000 fine.

Today’s order, issued less than two months after the last Turner decision, ups the ante once again, proposing fines of such size that only some of the FCC’s larger indecency fines compare. The FCC is clearly sending a signal that it takes false EAS tones very seriously, and the fact that the ads containing the EAS tones were produced by an independent third party didn’t let the programmers off the hook. In other words, it doesn’t matter how or why the ads got on the air; the mere fact that they aired is sufficient to create liability.

So what lesson should broadcasters and cable networks take away from this? Well, the all too obvious one is to do whatever it takes to prevent false EAS tones from making it on air. However, an equally useful lesson is to make sure that your contracts with advertisers require the advertiser to warrant that the spots provided will comply with all laws and to indemnify the broadcaster or network if that turns out not to be the case. That won’t save you from a big FCC fine and a black mark on your FCC record, but it will at least require the advertiser to compensate you for the damages you suffered in airing the ad and defending yourself. Unfortunately, many advertising contracts are not particularly well drafted (and some are just a handshake), which can expose you to a variety of liabilities like this unnecessarily.

It is therefore wise to have both your ad contracts and your advertising guidelines carefully reviewed by counsel experienced in this area of the law. Vigilant review of ads submitted for airing is an excellent first line of defense, but as demonstrated in today’s decision, it won’t do much good if the individuals reviewing the ads don’t know what to look for.

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February 2014

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 Limits License Renewal to Two Years and Assesses $4,000 Fine
  • $24,000 Consent Decree for Incomplete Public Inspection File
  • Hotels Cited for Exceeding Signal Leakage Limits in Aeronautical Bands

Station Assessed Fine for Public File Violations and Granted Short-Term License Renewal
In reviewing the license renewal application for a Meridian, Texas radio station, the FCC’s Media Bureau proposed a $4,000 fine for public inspection file violations. It also granted the station’s license renewal application, but only for a period of two years (rather than the normal eight), based upon the station’s extended periods of silence during the prior license term.

Section 73.3526 of the FCC’s Rules requires licensees to maintain information about station operations in the station’s public inspection file so the public can obtain “timely information about the station at regular intervals.” In its license renewal application, the station indicated that it could not locate a number of its quarterly issues-programs lists. The base forfeiture amount for public inspection file violations is $10,000, but the FCC has authority to adjust that amount up or down based on a licensee’s circumstances. Here, the FCC noted that “the violations were extensive, occurring over a period of nearly two years and involving at least 6 issues/programs lists.” Despite this, the FCC ultimately imposed a forfeiture amount of only $4,000 since the violations were not “evidence of a pattern of abuse.”

The station was also dark for lengthy periods during the prior license term. Section 312(g) of the Communications Act prohibits long periods of silence by licensed stations because licensees have an obligation to provide service to the public by broadcasting on their allocated spectrum. When the FCC reviews a station’s renewal application, it considers whether the licensee has adequately served its community of license. Section 309(k) of the Communications Act provides that the renewal application should be granted if “(1) the station has served the public interest, convenience and necessity; (2) there have been no serious violations of the Act or the Rules; and (3) there have been no other violations which, taken together, constitute a pattern of abuse.” In this case, the FCC pointed out that the licensee had two periods of silence, each lasting nearly a year, and that the station had been dark for almost half of the license term. Since the licensee had failed to provide “public service programming such as news, public affairs, weather information, and Emergency Alert System notifications” during these long periods of inactivity, the FCC determined that granting a renewal of only two years would be the most effective sanction because it would incentivize the licensee to maintain its broadcast operations and not go silent in the future.

License Agrees to Pay $24,000 Under Terms of Consent Decree for Missing Public File Documents
The FCC has entered into a consent decree with an Atlanta LPTV licensee after conducting a lengthy investigation. Almost two years ago, in March of 2012, the FCC sent a letter to the licensee asking for specific information to determine the station’s eligibility for Class A television status. The requested information included the location of the main studio, a description of production equipment, names of employees, the location of the public inspection file, a copy of the quarterly issues/programs lists, and a copy of the public inspection file documentation. In its response, submitted in June of 2012, the licensee informed the FCC that the station had been vandalized and provided police reports and other documentation to account for its failure to produce a public inspection file. In another letter dated almost one year after the licensee’s explanatory letter, the FCC asked for further clarification from the licensee regarding the location of the station’s public inspection file and why the police report did not mention vandalism of the public inspection file. The licensee replied one month later in July of 2013 and provided another police report to explain the theft of equipment.

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January 2014

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 Admonishes Television Stations for “Host-Selling” to Children
  • $7,500 Fine Imposed for Documents Missing From Public Inspection File
  • $17,000 Fine for Unauthorized Operation of a Radio Transmitter

Admonishment Issued for Program Characters Promoting a Product

The FCC continues to enforce its restrictions on commercial content during children’s shows. Section 73.670 of the FCC’s Rules restricts the amount of commercial matter that can be aired during children’s programming to 10.5 minutes per clock hour on weekends and 12 minutes per clock hour on weekdays. The Commission most often examines compliance with these limitations when acting on a television station’s license renewal application.

Earlier this month, the FCC issued identical admonishments to two commonly-owned Wisconsin TV stations for failing to comply with the limits on commercial matter in children’s programming. The stations disclosed in their license renewal applications that they had aired a commercial for cereal during a children’s program seven years ago, and the commercial contained “glimpses of characters from the program on the screen.” The licensee noted that the appearance was “small, fleeting, and confined to a small area of the picture,” and that the software used by the CW Network to prevent such appearances failed to catch this particular incident. Where a program character appears during a commercial in that program, the FCC’s approach is to treat the entire program as a commercial, which by definition exceeds the FCC’s commercial time limits in children’s programming.

The licensee argued that the images did not appear “during the commercial part of the spot but during a portion of the material promoting a contest.” The FCC disagreed, but only issued an admonishment to each of the stations because the violation was an isolated incident. Nevertheless, the FCC warned that it would impose more serious sanctions if the licensee committed any similar violations in the future.

License Assessed $7,500 Fine for Failing to Provide Quarterly Issues/Programs Lists for Seventeen Quarters

Earlier this month, the FCC imposed a $7,500 fine on a Pennsylvania station for willfully and repeatedly violating the Commission’s rule regarding the public inspection file. Under Section 73.3526(e)(12) of the FCC’s Rules, 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 April of 2010, an agent from the Enforcement Bureau’s Philadelphia office found during an inspection that the licensee was missing fifteen quarters of issues/programs lists. The licensee explained in response to a subsequent Letter of Inquiry that some of the lists had been stolen or removed from the public inspection file and promised to replace the missing lists. However, in February of 2011, a follow-up investigation revealed that the public inspection file contained only one issues/programs list, which meant that there was a total of seventeen quarters of missing lists. At the time of the follow-up, the licensee said that part of the roof of a neighboring building had collapsed and destroyed the records.

In June of 2011, the FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) for $15,000. In response, the licensee argued that the fine should be reduced because the missing records were outside his control and that he did not have the ability to pay such a fine. In January of 2014, the FCC determined that a reduction of the fine was warranted based on the licensee’s inability to pay, but noted that the failure to maintain issues/programs lists was not outside of the licensee’s control and that the licensee’s explanations as to the cause of the missing documents conflicted with each other. Although the FCC reduced the fine from $15,000 to $7,500, the Enforcement Bureau cautioned that it has previously rejected inability to pay claims for repeated or egregious violations and that in the event this licensee commits future violations, it may result in significantly higher fines that may not be reduced merely because of the licensee’s inability to pay.

Licensee Fined for Interfering with United States Coast Guard Operations

Last month, the FCC issued an NAL against a California licensee for operating a radio transmitter on a frequency not authorized by its license and failing to take precautionary measures to avoid causing interference. The base fine for operating on an unauthorized frequency is $4,000, and the base fine for interference is $7,000.

In January of last year, the United States Coast Guard complained to the FCC of interference with its operations in the 150 MHz VHF band. An agent from the Enforcement Bureau’s Los Angeles office used radio direction-finding methods to determine that the interference was coming from the licensee’s building. The agent located a transmitter at that location that was operating on a frequency different than that indicated on the transmitter’s label. After the Bureau contacted the licensee and informed it of the agent’s findings, the licensee turned off the transmitter, and the interference to the Coast Guard stopped.

Subsequently, the Enforcement Bureau’s Los Angeles office issued a Notice of Violation (“NOV”) to the licensee for failing to operate in accordance with its authorization and not taking reasonable precautions to avoid interference to licensed services. The NOV noted that the licensee’s authorization specified operation on frequencies that included neither the transmitter’s labeled frequency nor the frequency on which the transmitter was actually operating. In response, the licensee argued that the transmitter was unstable and operating about .8 MHz on both sides of the designated frequency.

Under Section 1.903(a) of the FCC’s Rules, a licensee can only operate a station in compliance with a valid authorization granted by the Commission. The FCC rejected the licensee’s argument that the malfunctioning transmitter was operating on the licensee’s assigned frequency, finding that its agent’s investigation indicated otherwise. The FCC also noted that Section 90.403(e) of the FCC’s Rules requires that licensees take appropriate measures to avoid causing harmful interference, and that the licensee here failed to offer any evidence in response to the NOV that it had taken such precautions.

In determining the appropriate fine, the FCC considered the facts and circumstances and found that the violations warranted proposing a fine higher than the base amount for these violations. Because the licensee caused harmful interference to the Coast Guard’s operations and the licensee was not aware of its spurious signal until the FCC notified it, the FCC assessed a total fine of $17,000, increasing the fine by $6,000 over the base amount for such violations.

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

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Over the years, I’ve written numerous times about the FCC’s adverse reaction to advertisers seeking to make their ads more attention-getting through inclusion of an Emergency Alert System tone. The most recent was this past November, when the FCC proposed a $25,000 fine against Turner Broadcasting System, Inc. for an EAS tone-laden Conan promo, and announced a $39,000 consent decree with a Kentucky TV station for a local sports apparel store ad containing an EAS alert tone.

I titled the post FCC Reaches Tipping Point on False EAS Alerts, and noted at the end of it that

ominously, today’s FCC Enforcement Advisory notes that “[o]ther investigations remain ongoing, and the Bureau will take further enforcement action if warranted.” Given today’s actions by the FCC, everyone whose job it is to review ad content before it airs is having a very bad day.

Today, the FCC fulfilled that prophecy, proposing an additional $200,000 fine against Turner Broadcasting System, Inc. for distributing another ad containing EAS tones. According to the FCC, Turner’s Adult Swim Network aired ads produced by Sony Music Group promoting an album by rap artist A$AP Rocky and the album’s availability at Best Buy stores. While the ad did not contain any digital data from an EAS tone, it did simulate the EAS audio tone itself. The ad aired seven times over the network’s East Coast feed, and then was repeated seven more times in the West Coast feed three hours later.

The FCC’s decision is “spirited” (at least by FCC standards), managing to convey a fair degree of exasperation, principally because of Turner’s prior violation and the fact that

In response to those [earlier] complaints, which also emphasized the potential impact on public safety of the transmission of such material, Turner represented to the Commission that it had changed certain of its internal review practices. Nevertheless, another Turner-owned channel, less than one year later, transmitted the A$AP Rocky/Best Buy advertisement 14 times over a six day period, which also contained simulations of the EAS codes. Thus, despite its experience with the problem of misusing EAS codes and Attention Signals, Turner continued to violate Section 11.45 of the Commission’s rules and Section 325(a) of the Act, indicating a higher degree of culpability in this instance. Therefore, based on the number of transmissions at issue, the amount of time over which the transmissions took place, the nationwide scope of Adult Swim Network’s audience reach, Turner’s degree of culpability, Turner’s ability to pay, and the serious public safety implications of the violations, as well as the other factors as outlined in the Commission’s Forfeiture Policy Statement, we find that a forfeiture of two hundred thousand dollars ($200,000) is appropriate.

Beyond the unprecedented size of the fine for such a violation, today’s decision is also notable because, unlike the self-inflicted wound of putting an EAS tone in a program promo, this case involved a spot produced by a third party. While the FCC has appeared in the past to have had at least some sympathy where a problem in a third-party ad “slipped through”, the FCC’s sympathy seems to be exhausted at this point. Having said that, it is worth noting that the FCC went after the program network rather than the individual cable and satellite systems that actually transmitted the spots to the public. Cable and satellite providers can take at least some solace in that.

While the nationwide audience and prior violation may have made the size of this fine somewhat unique, it is safe to say that the FCC has reached the point that it is unlikely to find a false EAS tone, no matter the circumstances, to be an excusable “oops” on the part of a program distributor. While the FCC might once have been willing to just admonish a violator and save the fines for repeat offenders, it appears that there will no longer be any free bites at the false EAS tone apple, and that each bite will be appreciably more expensive than the last.

Of course, if the FCC is hoping that steadily escalating fines will cause violators to lose their taste for the forbidden fruit of false EAS tones in ads, the question is whether advertisers will also hear that message, or are broadcasters, cable operators and satellite TV providers forever doomed to play a game of whack-a-mole (whack-a-tone?) with third-party ads?

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December 2013

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 Cancels $20,000 Children’s Television Fine
  • Fine and Reporting Requirements Imposed for EEO Violations
  • Individual Fined $15,000 for Unauthorized Operation of a Radio Transmitter

$20,000 Kidvid Fine Rescinded Due to Timely Filing

The FCC has continued to impose fines on numerous licensees for failing to timely file their Children’s Television Programming Reports on FCC Form 398. The FCC’s rules require that full power and Class A television stations file a Children’s Television Programming Report each quarter listing the station’s programming that is educational and informational for children, and regularly notify the public as to where to find those reports. The base fine for failing to file a required form with the FCC is $3,000.

In July of this year, the FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against a Louisiana licensee for failing to timely file its Children’s Television Programing Reports 18 times. After examining the facts and circumstances, including the licensee’s failure to disclose the late filings in its license renewal application, the FCC proposed a $20,000 fine.

In response to the NAL, the licensee asserted that the reports in question had been timely filed, and that the “late” dates the FCC was seeing in its filing database were merely amendments to the timely filed reports. Unfortunately, as those who have dealt with the FCC’s filing systems are aware, when an amendment to an existing report is filed, the FCC’s filing system changes the filing date shown from the original filing date to the filing date of the amendment. That is why it is important to print out evidence of the original filing when it is made, allowing the licensee to demonstrate that a timely filing was made if it is later questioned.

Based on the licensee’s ability to produce Submission Confirmation printouts showing that the reports were timely filed, the FCC agreed to rescind the NAL and cancel the $20,000 fine.

License Assessed $20,000 Fine and Reporting Obligations for Failing to Notify Job Referral Sources and Self-Assess Its EEO Performance

Earlier this month, the FCC imposed a $20,000 fine and detailed reporting requirements on an Illinois radio licensee. Under Section 73.2080(c)(1)(ii) of the FCC’s Rules, a licensee must provide notices of job openings to any organization that “distributes information about employment opportunities to job seekers upon request by such organization,” and under Section 73.2080(c)(3), must “analyze the recruitment program for its employment unit on an ongoing basis.”

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If there had been any doubt that the Video Division of the FCC’s Media Bureau would check a television station’s online public inspection file to confirm the truthfulness of certifications made by the licensee in a pending license renewal application, that doubt has been eliminated.

In a Notice of Apparent Liability for Forfeiture released December 3, the Video Division has proposed a $9,000 fine against the licensee of two Michigan televisions stations on the grounds that (i) each station had filed their Children’s Television Programming Reports (“Kidvid Reports”) late, and (ii) the stations failed to report those violations in responding to one of the certifications contained in their license renewal applications.

According to the FCC, the licensee had filed each station’s Kidvid Report late for three quarters during the license term in violation of Section 73.3526(e)(11)(iii) of the Commission’s Rules.

The problem was compounded when the licensee failed to disclose those violations in responding to Section IV, Question 3 of the Form 303-S, which requires licensees to certify “that the documentation, required by 47 C.F.R. Section 73.3526…has been placed in the station’s public inspection file at the appropriate times.” That same certification requires the applicant to submit an exhibit explaining any violations.

The Video Division of the FCC proposed that each station be assessed a fine of $3,000, the base forfeiture amount for failing to timely file Kidvid Reports, plus a fine of $1,500 for omitting from its renewal applications information regarding those violations. The Division suggested that it could have fined each station $3,000, rather than $1,500, for the reporting failure, but reduced the amount because each licensee “made a good faith effort to identify other deficiencies.”

Fortunately for the licensee in this case, it had checked the certification box with a “no,” and disclosed that its quarterly issues/programs lists had not been timely uploaded to the FCC’s online public file for the station. While the licensee did not mention anything about the late-filed Kidvid Reports, apparently the Video Division believed that the licensee’s failure to disclose was intentional enough to warrant a fine, but not deliberate enough to warrant a charge of misrepresentation or lack of candor that could have resulted in a much larger fine or worse.

The lessons learned from the Video Division’s action include: before signing off and filing a station license renewal application, (i) check the FCC’s online database to make sure that it has a record of all documents that were required to be timely filed, (ii) check the station’s paper (in the case of radio) and online (in the case of television) public inspection file to confirm (or not) that the file is complete and that the documents required to be in the file were placed there on a timely basis, and (iii) discuss with counsel what may need to be disclosed (or not disclosed) in response to certifications contained in a station’s application for renewal of license.

Of future concern is whether the Media Bureau will now be more inclined to impose even higher fines, claiming misrepresentation/lack of candor, where a license renewal applicant makes an unqualified affirmative certification that is not correct, or where the applicant states that it is unable to make an affirmative certification and provides an explanation, but does not fully disclose all material facts in its explanation. Recently the Media Bureau imposed a $17,000 fine against a station for violating Section 1.17 (misrepresentation/lack of candor) after having concluded that had the station “exercised even minimal due diligence, it would not have submitted incorrect and misleading material factual information to the Commission.” The Bureau made a point of the fact that the base statutory fine for misrepresentation or lack of candor is $37,500. Affirmative due diligence and caution are your best insurance policies in avoiding such a new and unbudgeted line item expense on your company’s next P&L.

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November 2013

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:

  • Multiple Indecency Complaints Result in $110,000 Payment
  • $42,000 in Fines for Excessive Power, Wrong Directional Patterns and Incomplete Public Inspection Files
  • Cable Operator Fined $25,000 for Children’s Programming Reports

Broadcaster Enters Into $110,000 Consent Decree Involving Allegations of Indecent Material

The FCC recently approved a consent decree involving a broadcaster with TV stations in California, Utah and Texas accused of airing indecent and profane content.

Section 73.3999 of the FCC’s Rules prohibits radio and television stations from broadcasting obscene material at all times and prohibits indecent material aired between 6:00 a.m. and 10:00 p.m.

The FCC received multiple complaints about the television show in question and sent Letters of Inquiry to the broadcaster asking it to provide a copy of the program and to answer questions about possible violations of the FCC’s indecency rule. The licensee complied with the requests but maintained that the program did not contain indecent content.

Earlier this month, the FCC entered into a consent decree with the broadcaster and agreed to terminate its investigation and dismiss the pending indecency complaints. Under the terms of the consent decree, the broadcaster is required to (a) designate a Compliance Officer within 30 days, and (b) create and implement a company-wide Compliance Plan within 60 days, which must include: (i) creating operating procedures to ensure compliance with the FCC’s restrictions on indecency, (ii) drafting a Compliance Manual, (iii) training employees about what constitutes indecent content, and (iv) reporting noncompliance to the FCC within 30 days of discovering any violations. The consent decree also requires the filing of a compliance report with the FCC in 90 days and annually thereafter for a period of 3 years. The requirements imposed under the consent decree expire after three years.

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Over the years, I’ve written a number of times of the FCC’s concern about airing emergency sounds, from the siren blare telling you that Indiana Wants Me, to Emergency Alert System tones promoting the movie Skyline, to an actual EAS alert warning of the Zombie Apocalypse.

Section 11.45 of the FCC’s Rules states that “[n]o person may transmit or cause to transmit the EAS codes or Attention Signal, or a recording or simulation thereof, in any circumstance other than in an actual National, State or Local Area emergency or authorized test of the EAS.” As a result, every time that annoying EAS digital squeal slips onto the airwaves during a commercial rather than in an EAS test, it is guaranteed that the employee charged with screening ads is going to have a very bad day.

Fortunately, most broadcasters and cable operators are well aware of the restriction and go to great lengths to screen out such content. Unfortunately, advertisers and ad agencies are often not so attuned, and given the sheer amount of ad content being aired, an EAS-laden ad will slip through sooner or later.

Aggravating the situation is that while airing the tone from the old Emergency Broadcast System could cause public confusion, the EAS squeal contains digital information that is relayed to other media entities, whose EAS equipment then reads that data and automatically transmits the alert on down the alert chain. The farther the alert travels from the original source (where observant viewers or listeners might have figured out it was just part of a commercial), the greater the likelihood of public confusion and panic.

While the FCC certainly takes EAS false alerts seriously, it has seemed to recognize that the media entity airing the ad is usually as much a victim of the false alert signal as anyone, and as long as prompt action was taken to prevent a recurrence, has not been particularly punitive in its enforcement actions. Its strongest reaction to false EAS alerts up till now has been to issue an Urgent Advisory after the Zombie Apocalypse telling EAS participants to change the default password on their EAS equipment to prevent hackers from commandeering the equipment over the Internet to send out false alerts.

That changed late today, when the FCC issued a News Release and an FCC Enforcement Advisory warning against “False, Fraudulent or Unauthorized Use of the Emergency Alert System Attention Signal and Codes”, along with a Notice of Apparent Liability (NAL) for $25,000 against Turner Broadcasting System, Inc. and a $39,000 consent decree against a Kentucky TV station.

According to the NAL, Turner aired a promo for the Conan show that contained a simulated EAS tone in connection with an appearance by comic actor Jack Black. The FCC was not amused. While the base fine for violating Section 11.45 is $8,000, the FCC found that the seriousness of the violation, particularly given the nationwide transmission of the false alert signal, as well as Turner’s ability to pay, justified increasing the proposed fine to $25,000. While not specifically addressed in the NAL, the fact that Turner produced the promo itself, rather than this being a case of a third party advertiser slipping it past Turner, appears to have drawn the FCC’s ire.

More interesting still is the $39,000 consent decree, where the Kentucky station did not contest that it aired an ad for a sports apparel store that “stops in the middle of the commercial and sounds the exact tone used for the Emergency Alert warnings.” Besides the eye-opening $39,000 payment, the consent decree requires extensive further efforts by the licensee, including implementing a Section 11.45 compliance program for its staff, creating and distributing a compliance manual to its staff, implementing a compliance training program, filing annual compliance reports for the next three years, reporting any future violations to the FCC, and developing and implementing a program to “educate members of the public about the EAS alerts, the limits of public warning capabilities, and appropriate responses to emergency warning messages.” With regard to this last requirement, the educational program must include:

  • Airing 160 public service announcements (80 on the station’s primary channel and 80 on its multicast channel).
  • Interviewing local emergency preparedness officials and including vignettes on emergency awareness topics at least twice a month on the station’s morning program.
  • Expanding the station’s website to include links to local emergency agencies, banner messages with emergency-related information, and video messages from the Federal Emergency Management Agency and local emergency preparedness agencies.
  • Installing an additional SkyCam at its tower site and using “special radio equipment” to communicate with local emergency management officials and which will relay alerts to the station’s master control personnel.
  • Leasing tower space to the local emergency management agency for a “new modernized communications system” linking local agencies and organizations.
  • Using social media and digital technologies to promptly disseminate emergency alerts, including posting information culled from the station’s public service announcements, vignettes, and the local emergency management agency on the station’s Facebook page weekly, and including timely late-breaking news coverage of severe weather conditions and forecasts on the station’s smartphone app.
  • Utilizing specific computer hardware and software to render weather data and maps for use on-air, online, and in mobile applications, as well as to track severe weather events.
  • Periodically reviewing and revising the station’s educational program to improve it and ensure it is current and complete, including conferring with the National Weather Service and state, county and federal emergency preparedness managers and public safety officials.

The consent decree does not indicate how many times the offending ad aired, or if the station produced it, but the severity of the consent decree terms is startling. Also noteworthy is the FCC Enforcement Advisory’s admonition that not just broadcast stations and multichannel video programming distributors are on the hook, but that “[t]he prohibition thus applies to programmers that distribute programming containing a prohibited sound regardless of whether or not they deliver the unlawful signal directly to consumers; it also applies to a person who transmits an unlawful signal even if that person did not create or produce the prohibited programming in the first instance.”

The FCC has therefore decided that it is time to crack down on violations, and ominously, today’s FCC Enforcement Advisory notes that “[o]ther investigations remain ongoing, and the Bureau will take further enforcement action if warranted.” Given today’s actions by the FCC, everyone whose job it is to review ad content before it airs is having a very bad day.