Articles Posted in Low Power FM & Translators

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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:

Headlines:

  • Broadcaster Agrees to Pay $100,000 Fine for Filing Applications Under False Names
  • FCC Proposes $13,000 Fine for Late License Renewal Application and Unauthorized Operation
  • Failure to Register with the FCC Results in $100,000 Fine for Telecom Provider

Catch Me If You Can: Broadcaster Settles Long-Running Investigation into the Use of Pseudonyms in FCC Applications

The FCC entered into a Consent Decree with a radio broadcaster to resolve an investigation into whether the broadcaster filed numerous applications using fake names and refused to cooperate with FCC investigations.

Section 1.17 of the FCC’s Rules requires that written and oral statements to the FCC be truthful and accurate. Section 1.65 of the Rules requires applicants to amend applications as needed for continuing accuracy and completeness. In addition, Section 73.1015 requires applicants to respond to FCC inquiries regarding broadcast applications.

The Consent Decree explains that, since 1982, there has been a “cloud of unanswered questions” about whether applications filed by the broadcaster were accurate. In 1993, the FCC sent the broadcaster a letter inquiring into: (1) his role in certain entities; (2) apparent misrepresentations he made to the FCC; (3) his prior failure to respond to certain site availability allegations; and (4) the operation of several FM translators. The broadcaster never responded to the letter, and since that time, the broadcaster’s real name has not appeared in any FCC application as a principal of any applicant. Instead, the broadcaster used pseudonyms, as well as the names of his wife, mother, and grandmother.

In addition, the Consent Decree states that a 1997 complaint filed by another broadcaster was never answered or disclosed by the broadcaster. The complaint alleged that the broadcaster was the real party in interest behind a certain licensee, and that the broadcaster had violated several other FCC Rules.

Under the terms of the Consent Decree, the broadcaster admitted to being the real party in interest on numerous applications for which he had used pseudonyms, and admitted to several other violations of FCC Rules. The broadcaster agreed to (1) pay a $100,000 fine; (2) the cancellation of licenses for an AM station and two low power FM stations; and (3) the dismissal of petitions for reconsideration involving two dismissed FM applications. In return, the FCC agreed to grant the license renewal applications for another AM station and seven FM translator stations, each with a shortened license term of one year so that the FCC can closely monitor the licensee’s operation of the stations in the future.

FCC Proposes $13,000 Fine for Unauthorized Operation Caused by Late License Renewal Application

The FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against an Ohio FM licensee for failing to timely file its license renewal application and for continuing to operate the station after its license had expired. The FCC proposed a fine for the violations and simultaneously issued a Memorandum Opinion and Order regarding the licensee’s license renewal application.

Section 301 of the Communications Act provides that “[n]o person shall use or operate any apparatus for the transmission of energy or communications or signals by radio . . . except under and in accordance with this [Act] and with a license in that behalf granted under the provisions of [the Act].” Section 73.3539(a) of the FCC’s Rules requires that broadcast licensees file applications to renew their licenses “not later than the first day of the fourth full calendar month prior to the expiration date of the license sought to be renewed.”

In this case, the station’s license expired on October 1, 2004, rendering the license renewal application due by June 1, 2004. The licensee, however, did not file the renewal application until July 30, 2004. The FCC dismissed the application due to the licensee’s “red light” status for owing a debt to the FCC. Red light status prevents the FCC from providing any government benefit to a licensee, including license renewal. The licensee did not seek reconsideration of the dismissal and, as a result, the station’s license expired on October 1, 2004.

In January 2011, the FCC staff was told that the station was off the air. On January 12, 2011, the FCC wrote a letter to the former licensee inquiring into the operating status of the station, and requested a response within 30 days. The station did not respond until March 25, 2011, and stated that it was on-air as of the date of the FCC letter. However, the station explained that it had in fact suspended operations on February 23, 2011, after its transmitter was damaged during the theft of its copper feed lines.

In May 2011, the licensee filed a request for Special Temporary Authority (“STA”) to resume operations, stating that its transmitter repair was almost complete. The licensee also noted that it was unaware its 2004 license renewal application had been dismissed, and that it would file another license renewal application “once it [could].” The licensee submitted a license renewal application in July 2011, and the FCC subsequently granted the station’s STA request through March 2012.

In February 2012, the licensee filed another STA request to operate with reduced facilities, stating that the damage to the transmitter was far worse than previously thought, and would cost more than the value of the station to repair. The licensee also stated that the landlord of its transmitter site had declined to renew the station’s lease, but it had found an alternative, temporary location from which it could operate the station. The FCC granted the STA, and set an expiration date of August 2012. The licensee continued to operate under the STA facilities even after the August 2012 expiration date. The licensee did not file a request to extend the STA until February 2013. That request was granted as a new STA in March 2013, and the licensee has operated under a series of extensions to that STA ever since.

Based on the facts of this case, the FCC proposed the full base fine amount of $3,000 for failure to file a required form, and the full base fine amount of $10,000 for unauthorized operations. The FCC explained that while it typically assesses fines of $7,000 for unauthorized operations, the length of the first unauthorized period in this case—over six years—followed by a second unauthorized period, warranted a $10,000 fine.

The FCC stated that it would grant the station’s license renewal application upon the conclusion of the forfeiture proceeding “if there are no issues other than the apparent violation that would preclude grant of the applications.”

FCC Fines Prepaid Calling Card Company $100,000 for Failing to Register as Service Provider

The FCC fined a New Jersey provider of international prepaid calling card services $100,000 for failing to register as a telecommunications service provider and adhere to all registration requirements.

Section 64.1195(a) of the FCC’s Rules requires that companies providing interstate telecommunications services file an FCC Form 499-A, also known as the Annual Telecommunications Reporting Worksheet, with the Universal Service Administrative Company prior to providing service. The Form 499-A instructions state that “[w]ith very limited exceptions, all intrastate, interstate, and international providers of telecommunications in the United States must file this Worksheet.”

According to the FCC, compliance with the registration requirement is critical to determining a provider’s payment obligations to the Universal Service Fund, Telecommunications Relay Service Fund, and numbering support mechanisms. The FCC further stated that registration is a way to recover costs, and is a central repository for important details about providers.

Calling it a “dereliction of its responsibilities,” the FCC determined that the provider willfully operated for years without filing a Form 499-A, giving the provider an unfair economic advantage over its competitors. The FCC stated that the misconduct started when the provider began providing service in 1997 and continues until the provider files its initial Form 499-A. The FCC proposed a $100,000 fine for the provider’s transgressions.

In addition to the fine, the FCC instructed the provider to immediately register as a telecommunications provider, and to come into full compliance with all of its federal regulatory obligations. The FCC also warned that the fine was “a very limited action that does not reflect the full extent of [the service provider’s] potential forfeiture liability and that does not in any way preclude the Commission from imposing additional forfeitures … in the future.”

A PDF version of this article can be found at FCC Enforcement Monitor November 2016.

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As we previously reported, the FCC last year adopted a number of changes to its rules and policies aimed at revitalizing the AM radio service, which for many years has lived in the shadow of the more robust FM service.  One of these changes was to expand the ability of AM broadcasters to use FM translators to rebroadcast their AM signals, thereby improving coverage, particularly at night.  To accomplish this, the FCC gave each AM station the right to file one, and only one, application to move an FM translator up to 250 miles and change the translator’s frequency, provided that it is used to rebroadcast the designated AM station for the next four years.  If that application does not make it through the FCC process for any reason, the broadcaster is barred from filing another.

The FCC gave smaller Class C and D AM stations first crack at its new policy by opening a window on January 29, 2016, during which Class C and D licensees could file modification applications on a first-come, first-served basis.  In other words, if you filed your application on January 29, you trumped anyone who filed a conflicting application after that date.  If parties file mutually exclusive applications on the same day, the applicants need to resolve the mutual exclusivity through settlement negotiations and/or technical amendments (e.g., one or both parties move to a different frequency).

The first window, limited to Class C and D AM stations, closes on July 28, 2016.  On the next day, July 29, a second window opens during which Class A and B AM stations (as well as Class C and D stations that did not file in the first window) may file modification applications to relocate FM translators to be used for AM station rebroadcasts.

AM stations that have not yet filed should keep in mind that:

  1. If you have a Class A or B AM station and plan to relocate an FM translator for AM rebroadcast purposes, you should get your modification application filed on July 29 in order to give yourself the maximum protection against being bumped by an earlier-filed mutually exclusive application.  If you are planning to buy a translator but haven’t actually acquired it yet, there are still ways to get the modification application on file before closing the acquisition.
  2. If you have a Class C or D AM station and plan to relocate an FM translator for rebroadcasts (and haven’t filed a modification application yet), file by July 28.  While Class C and D stations will not be precluded from filing in the second window, July 29 is sure to bring a wave of new modification applications that will change the translator landscape significantly.

But even having these deadlines circled on your calendar won’t help if your modification application is dismissed.  When it comes to modification applications filed in either of these windows, the FCC has made clear that its policy is one and done.  A dismissed application means that you not only lose your place in the processing line, but cannot file again in the windows.  Such a dismissal could occur due not only to deficiencies in the application itself, but also if your deal to acquire the translator falls through.  AM broadcasters buying a translator are therefore well advised to pay careful attention to the due diligence process, the closing conditions in the acquisition agreement, the compliance of the proposed move with FCC technical rules, and their financing for the acquisition.  If a deal falls through, the reason is irrelevant.  You’ll be sitting out the filing window watching your competitors get their FM translators.

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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.

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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.

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While relief won’t come as soon as radio broadcasters had hoped, the FCC gave AM stations a shot in the arm with the release of an Order designed to provide assistance to the struggling AM radio service.

The Order, released on October 23, 2015, comes a full two years after the October 2013 Notice of Proposed Rulemaking (“NPRM”) that launched the effort.  In the Order, the FCC adopted a number of proposals (with some modifications) from the NPRM.  The most significant of these are exclusive AM filing windows in 2016 to allow AM stations to move an FM translator up to 250 miles to rebroadcast that AM station’s signal, and 2017 windows exclusively for AM stations to apply for a new FM translator construction permit.

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

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

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

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

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

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

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

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

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

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

So what is the FCC waiting for?

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March 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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March 2015
The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by April 10, 2015, reflecting information for the months of January, February and March 2015.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station. The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the public inspection file a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.” By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.
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With the heat of Summer now upon us, the FCC is gearing up for its annual regulatory fee filing window, which usually occurs in mid-September. Like other federal agencies, the FCC must raise funds to pay for its operations (“to recover the costs of… enforcement activities, policy and rulemaking activities, user information services, and international activities.”). For Fiscal Year 2014, Congress has, for the third year in a row, mandated that the FCC collect $339,844,000.00 from its regulatees.

Accordingly, the FCC is now tasked with determining how to meet the Congressional mandate. At its most basic level, the FCC employs a formula that breaks down the cost of its employees by “core” bureaus, taking into consideration which employees are considered “direct” (working for one of the four core bureaus), or “indirect” (working for other divisions, including but not limited to, the Enforcement Bureau and the Chairman’s and Commissioners’ offices). The FCC factors in the number of regulatees serviced by each division, and then determines how much each regulatee is obligated to pay so that the FCC can collect the $339M total.

In its quest to meet the annual congressional mandate, the FCC evaluates and, for various reasons, tweaks the definitions or qualifications of its regulatee categories to, most often, increase certain regulatory fee obligations. FY 2014 is just such an occasion. In FY 2013, the FCC, which historically has imposed drastically different fees for VHF and UHF television licensees, decided that, effective this year, FY 2014, VHF and UHF stations would be required to pay the same regulatory fees. In addition, a new class of contributing regulatees, providers of Internet Protocol TV (“IPTV”), was established and is now subject to the same regulatory fees levied upon cable television providers. Prior to FY 2014, IPTV providers were not subject to regulatory fees.

The FCC’s proposals for FY 2014 regulatory fees can be found in its Order and Second NPRM (“Order”). In that Order, the FCC proposes the following FY 2014 commercial VHF/UHF digital TV regulatory fees:

  • Markets 1-10 – $44,875
  • Markets 11-25 – $42,300
  • Markets 26-50 – $27,100
  • Markets 51-100 – $15,675
  • Remaining Markets – $4,775
  • Construction Permits – $4,775

Other proposed TV regulatory fees include:

  • Satellite Television Stations (All Markets) – $1,550
  • Construction Permits for Satellite Television Stations – $1,325
  • Low Power TV, Class A TV, TV Translators & Boosters – $410
  • Broadcast Auxiliaries – $10
  • Earth Stations – $245

The proposed radio fees depend on both the class of station and size of population served. For AM Class A stations:

  • With a population less than or equal to 25,000 – $775
  • With a population from 25,001-75,000 – $1,550
  • With a population from 75,001-150,000 – $2,325
  • With a population from 150,001-500,000 – $3,475
  • With a population from 500,001-1,200,000 – $5,025
  • With a population from 1,200,001-3,000,000 – $7,750
  • With a population greater than 3,000,000 – $9,300

For AM Class B stations:

  • With a population less than or equal to 25,000 – $645
  • With a population from 25,001-75,000 – $1,300
  • With a population from 75,001-150,000 – $1,625
  • With a population from 150,001-500,000 – $2,750
  • With a population from 500,001-1,200,000 – $4,225
  • With a population from 1,200,001-3,000,000 – $6,500
  • With a population greater than 3,000,000 – $7,800

For AM Class C stations:

  • With a population less than or equal to 25,000 – $590
  • With a population from 25,001-75,000 – $900
  • With a population from 75,001-150,000 – $1,200
  • With a population from 150,001-500,000 – $1,800
  • With a population from 500,001-1,200,000 – $3,000
  • With a population from 1,200,001-3,000,000 – $4,500
  • With a population greater than 3,000,000 – $5,700

For AM Class D stations:

  • With a population less than or equal to 25,000 – $670
  • With a population from 25,001-75,000 – $1,000
  • With a population from 75,001-150,000 – $1,675
  • With a population from 150,001-500,000 – $2,025
  • With a population from 500,001-1,200,000 – $3,375
  • With a population from 1,200,001-3,000,000 – $5,400
  • With a population greater than 3,000,000 – $6,750

For FM Classes A, B1 &C3 stations:

  • With a population less than or equal to 25,000 – $750
  • With a population from 25,001-75,000 – $1,500
  • With a population from 75,001-150,000 – $2,050
  • With a population from 150,001-500,000 – $3,175
  • With a population from 500,001-1,200,000 – $5,050
  • With a population from 1,200,001-3,000,000 – $8,250
  • With a population greater than 3,000,000 – $10,500

For FM Classes B, C, C0, C1 & C2 stations:

  • With a population less than or equal to 25,000 – $925
  • With a population from 25,001-75,000 – $1,625
  • With a population from 75,001-150,000 – $3,000
  • With a population from 150,001-500,000 – $3,925
  • With a population from 500,001-1,200,000 – $5,775
  • With a population from 1,200,001-3,000,000 – $9,250
  • With a population greater than 3,000,000 – $12,025

In addition to seeking comment on the proposed fee amounts, the Order seeks comment on proposed changes to the FCC’s basic fee formula (i.e., changes in how it determines the allocation of direct and indirect employees and thus establishes its categorical fees), and on the creation of new, and the combination of existing, fee categories. The Order also seeks comment on previously proposed core bureau allocations, the FCC’s intention to levy regulatory fees on AM Expanded Band Radio Station licensees (which have historically been exempt from regulatory fees), and whether the FCC should implement a cap on 2014 fee increases for each category of regulatee at, for example, 7.5% or 10% above last year’s fees. Comments are due by July 7, 2014 and Reply Comments are due by July 14, 2014.

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Earlier today, the FCC released a Public Notice detailing the results of the recent LPFM filing window, along with guidance as to what happens next. More than 2,800 low power FM (LPFM) applications were filed during the October 15 – November 15 (as extended) filing window, with the largest numbers coming from Texas (303), California (283), and Florida (276). To put that number in perspective, if it were possible to grant all of the filed LPFM applications, it would increase the number of radio stations in the U.S. (not including translators) by nearly 20%.

However, many if not most of the applications will indeed conflict with each other, so part of the reason for today’s Public Notice is to respond to inquiries regarding the processing of singleton and mutually exclusive applications. This includes such topics as amendments, settlement agreements between mutually exclusive applicants, time-sharing agreements, petitions to deny, and how parties can obtain reinstatement of dismissed applications. Given the more than a decade it took to process applications from the 2003 FM translator filing window, the breakneck speed at which the FCC is moving to process LPFM applications is notable.

According to the Public Notice, the FCC intends to begin rapidly processing applications as early as this month, stating that:

  • The Bureau’s first priority has been to identify singleton applications (applications that do not conflict with other applications filed in the window), of which there appear to be about 900. The FCC indicates it hopes to begin granting such applications in January 2014.
  • Later this month, the Bureau will release a Public Notice identifying the mutually exclusive (MX) application groups.
  • Effective with the release of the Public Notice on MX application groups, mutually exclusive applicants will have the ability to file technical amendments and/or enter into settlement and time-sharing agreements to resolve application conflicts.
  • Following the Bureau’s review of technical amendments and agreements filed to remove application conflicts, the FCC will identify one or more tentative selectees from each mutually exclusive group. The Bureau will then analyze petitions to deny filed against each tentative selectee, and either grant or dismiss that application. In certain cases, the FCC will identify a successor tentative selectee or selectees after acting on the application of the original tentative selectee.

The Public Notice also provided the following information:

Mutually Exclusive Applications: For applications that do not meet the minimum separation requirements of the FCC’s rules, parties are allowed to negotiate settlements and/or file technical amendments to resolve conflicts after the FCC releases the MX Public Notice. As noted above, the FCC intends to release the MX Public Notice later this month.

Amendments: Once the MX Public Notice is released, parties will be allowed to file certain minor amendments to their applications. Major amendments can only be filed by tentative selectees, and only after the FCC announces which applicants have been anointed with that status.

Settlement Agreements: MX applicants will also be allowed to resolve technical conflicts through settlement agreements among applicants, including agreements to make technical amendments to their applications to eliminate the conflict. The Public Notice spells out a detailed process applicants must follow to notify the FCC of their settlement plans.

Voluntary Time-Share Agreements: Parties are also allowed to enter into “partial or universal time-share” agreements. Time-share agreements must (i) specify the proposed hours of operation of each time-share proponent; (ii) not include simultaneous operation of the time-share proponents; and (iii) include a proposal by each time-share proponent to operate for at least 10 hours per week.

Petitions to Deny: All applications that the Commission accepts are subject to petition to deny filings within 30 days after a Public Notice announcing that the application has been accepted for filing.

Dismissed Applications: The FCC is required to dismiss any application that does not comply with the FCC’s minimum distance separation requirements to pre-existing facilities. Any application that does not meet the separation requirements to existing facilities cannot be amended to fix that problem.

It is clear from today’s Public Notice that the FCC is working quickly to try and wrap up much of this proceeding by Christmas or shortly after the new year begins. Parties involved or potentially affected by this proceeding should therefore start adjusting their holiday schedules to be able to move quickly in response to the promised notices that will be rolling out of the FCC in the next few weeks.

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