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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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A few minutes ago, the FCC released an Order extending the December 2, 2013 deadline for commercial broadcast stations to file their biennial ownership reports to December 20, 2013. The extension is meant to respond to the fact that the FCC took its website (including the Consolidated Database System used for preparing and filing reports and applications) offline during the October government shutdown. Because of this, broadcasters were prevented from preparing their voluminous ownership reports until the FCC reopened and the website was reactivated.

Since the biennial ownership report requires filers to provide their ownership information as it existed on October 1, 2013, broadcasters normally have sixty days after the October 1 reporting date to prepare and submit their reports. By extending the deadline to December 20, the FCC is seeking to maintain that sixty day preparation period.

Noncommercial broadcasters whose biennial ownership reports are due on December 2, 2013 (radio stations licensed to communities in Alabama, Connecticut, Georgia, Massachusetts, Maine, New Hampshire, Vermont, and Rhode Island and noncommercial television stations licensed to communities in Colorado, Minnesota, Montana, North Dakota, and South Dakota) should be aware that this extension does not apply to noncommercial ownership reports. Barring further action by the FCC, noncommercial stations in the listed states should continue to plan on filing their ownership reports by the current December 2, 2013 deadline.

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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.

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Yesterday, the FCC released a Notice of Proposed Rule Making setting forth a number of potential changes to its technical rules governing AM radio designed to revitalize AM stations and enhance the quality of AM service.

In the past several years, the Commission has instituted several changes to its AM rules and policies in hopes of improving AM radio and reducing the regulatory burdens on AM broadcasters. Among these are:

  • 2005 and 2008 – Announced simplified AM licensing procedures for KinStar (2005) and Valcom (2008) low-profile and streamlined AM antennas, which provide additional siting flexibility for non-directional stations to locate in areas where local zoning approval for taller towers cannot be obtained;
  • 2006 – Adopted streamlined procedures for AM station community of license changes;
  • 2008 – Adopted moment method modeling as an alternative methodology to verify AM directional antenna performance, reducing the cost of AM proof of performance showings substantially;
  • 2009 – Authorized rebroadcasting of AM stations on FM translators, which has proven to be extremely successful, with over 10% of all AM stations now using FM translators to provide improved daytime and nighttime service to their communities of license;
  • 2011 – Authorized AM stations to use Modulation Dependent Carrier Level (“MDCL”) control technologies, which allow AM stations to cut energy costs through reduced electrical consumption on transmissions and related cooling functions;
  • 2011 – Announced an FM translator minor modification rule waiver policy and waiver standards to expand opportunities for AM stations to provide fill-in coverage with FM translators;
  • 2012 – Authorized all future FM translator stations licensed from Auction 83 to be used for AM station rebroadcasting;
  • 2012 – Granted first Experimental Authorization for all-digital AM operation; and
  • 2013 – Improved protection to AM stations from potential re-radiators and signal pattern disturbances by establishing a single protection scheme for tower construction and modification near AM tower arrays, and designating moment method modeling as the principal means of determining whether a nearby tower affects an AM radiation pattern.

Now, with the introduction of yesterday’s Notice of Proposed Rule Making, the FCC is considering yet more changes to its rules to help AM radio. Among the proposals in the Notice of Proposed Rule Making are:
(1) Open an FM translator filing window exclusively for AM licensees and permittees during which AM broadcasters may apply for a single FM translator station in the commercial FM band to be used solely to rebroadcast the AM station’s signal to provide fill-in and/or nighttime service. The window, as proposed, would have the following limitations:

  • Applications filed during this window must strictly comply with the existing restrictions on fill-in coverage governing AM use of FM translators (e.g., they must be located so that no part of the 60 dBu contour of the FM translator will extend beyond the smaller of a 25-mile radius from the AM station’s transmitter site, or the AM station’s daytime 2 mV/m contour; and
  • Any FM translator station authorized though this filing window will be permanently linked to the licensee or permittee of the primary AM station acquiring the authorization, and the FM translator authorization may not be assigned or transferred except in conjunction with that AM station.

(2) Modify the daytime community coverage standards for existing AM stations contained in Section 74.24(i) of the FCC’s Rules to require only that stations cover either 50% of the population or 50% of the area of the station’s community of license with a daytime 5 mV/m signal. This proposal would not affect applications for new AM stations, or proposals to change the community of license of an existing AM station, both of which will continue to require that 100% of the community of license receive at least a 5 mV/m signal during the day, and cover at least 80% of the community of license at night with a nighttime interference-free signal.

(3) Modify nighttime community coverage requirements for existing AM stations by (i) eliminating the nighttime coverage requirement for existing licensed AM stations, and (ii) in the case of new AM stations and AM stations seeking to change their community of license, modify the rules so the station would be required to cover either 50% of the population or 50% of the area of the community of license with a nighttime 5 mV/m signal or a nighttime interference-free contour, whichever value is higher.

(4) Delete the AM “Ratchet Rule,” which currently results in a reduction of nighttime signal coverage for AM stations relocating their licensed facilities.

(5) Permit wider implementation of Modulation Dependent Carrier Level control technologies by amending the FCC’s rules to allow AM stations to commence operation using MDCL control technologies without seeking prior FCC authority, provided that they notify the FCC of the MDCL operation using the Media Bureau’s Consolidated Database System within 10 days of commencing such operation.

(6) Modify AM antenna efficiency standards, and consider whether the minimum field strength values set forth in various technical rules could be reduced by approximately 25%.

While the changes under consideration are significant, AM broadcasters will have a fair amount of time to contemplate them before comments on the proposals are due at the FCC. The comment deadline will be 60 days after Federal Register publication of the Notice of Proposed Rule Making, with reply comments due 30 days after that.

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October 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:

  • Online Public File Violations and Failure to Respond Result in $14,400 Fine
  • Unlicensed Broadcast Operation Draws $7,000 Fine
  • Fines Continue for Class A Children’s Television Violations

Licensee Fined for Public Inspection File Violations and Failure to Respond to FCC Inquiries
The FCC issued a Forfeiture Order in the amount of $14,400 to a California television licensee for failing to keep its online public inspection file up to date and for not responding to the FCC’s letters of inquiry.

Earlier this year, the FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against the licensee, asserting that the station had failed to place required documentation in its online public inspection file and failed to respond to FCC letters of inquiry. The NAL concluded that the licensee should be assessed a $16,000 forfeiture for these violations, which was comprised of $10,000 for the public file violation and $6,000 for failure to respond to the FCC’s correspondence. Although the usual penalty for failure to respond is $4,000, the FCC imposed the higher penalty of $6,000 on this licensee because its “misconduct was egregious and repeated.”

The licensee timely responded to the NAL and argued against the imposition of a $16,000 fine. The FCC rejected all but the last of the station’s arguments. First, the FCC disagreed with the licensee’s argument that uploading documents into its online inspection file was unnecessary because of their availability at the station’s main studio, noting that “the online public file is a crucial source of information for the public.” Second, the FCC noted that providing the FCC with updated contact information is the responsibility of the licensee, and therefore rejected the licensee’s argument that the station’s failure to reply to FCC letters sent to an outdated address was unintentional. Third, the FCC ignored the licensee’s argument that paying a fine would impose a financial hardship, as the station declined to provide the required documentation of its financial status. Ultimately, however, the FCC agreed to reduce the fine from $16,000 to $14,400 in light of the station’s history of compliance with the FCC’s Rules.

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As we prepare to head down to Orlando for the NAB/RAB Radio Show next week, I wanted to remind those who will be at the Show that Pillsbury is again sponsoring the Leadership Breakfast. This year, the event will be in Gatlin Ballroom D at the Rosen Creek Shingle Hotel on Thursday, September 19, beginning at 7:15 a.m., with the presentations to begin at 7:45 am. As before, we will have opening remarks from Marci Ryvicker, a Managing Director with Wells Fargo Securities and Wall Street’s number one broadcast analyst, and then a panel featuring Lew Dickey (CEO of Cumulus Media), Mary Quass (CEO of NRG Media), Jeffrey Warshaw (CEO of Connoisseur Media), and Larry Wilson (CEO of Alpha Broadcasting and L&L Broadcasting).

This year’s event should prove to be especially timely because of changes in the economy and the increased M&A activity, particularly with regard to radio. Cumulus has just announced deals with Townsquare Media to sell some stations and acquire others as well as a separate deal to buy Westwood One; Connoisseur as well as L&L Broadcasting have been active in buying stations; and NRG is always in the hunt. Beyond the particulars for individual companies are new technological developments, including the placement of an FM chip in Sprint’s mobile phones, which will help make radio that much more ubiquitous in the digital world.

The Leadership Breakfast is always a packed event (in part because of a free hot breakfast!), and I expect this year to be no different.

On a separate front, my Pillsbury partner Scott Flick will be speaking on an NAB panel (to be held on Wednesday, September 18, at 10:15 a.m. in Gatlin Ballroom A4) entitled “And the Answer Is: What is Radio Regulatory Jeopardy?” As regular readers of CommLawCenter have probably picked up from his posts here, Scott has an encyclopedic knowledge of FCC rules and decisions, and the session will no doubt be an entertaining and informative look at troublesome FCC issues.

Some of my other colleagues — including Dick Zaragoza, Miles Mason and Andy Kersting — will also be at the Show. One of the great benefits of NAB shows is the opportunity to catch up with old friends and meet new ones, so if you are going to be there, feel free to reach out to any of us and we’ll try to get together. We look forward to seeing you there.

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Full payment of annual regulatory fees for Fiscal Year 2013 (FY 2013) must be received no later than 11:59 PM Eastern Time on September 20, 2013. As of today, the Commission’s automated filing and payment system, the Fee Filer System, is available for filing and payment of FY 2013 regulatory fees. For more information on the FY 2013 annual regulatory fees, please see our Client Alert and our prior posts here and here.

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The FCC has released a Report and Order which includes its final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for fiscal year 2013 (FY 2013), and in some cases how the FCC will calculate Annual Regulatory Fees beginning in FY 2014. The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

The FCC adopted many of its proposals without material changes. Some of the more notably proposals include:

  • Eliminating the fee disparity between UHF and VHF television stations beginning in FY 2014, which is not a particularly surprising development given the FCC’s recently renewed interest in eliminating the UHF discount for purposes of calculating compliance with the FCC’s ownership limits;
  • Imposing on Internet Protocol TV (IPTV) providers the same regulatory fees as cable providers beginning in FY 2014. In adopting this proposal, the Commission specifically noted that it was not stating that IPTV providers are cable television providers, which is an issue pending before the Commission in another proceeding;
  • Using more current (FY 2012) Full Time Employees (FTE) data instead of FY 1998 FTE data to assess the costs of providing regulatory services, which resulted in some significant shifts in the allocation of regulatory fees among the FCC’s Bureaus. In particular, the portion of regulatory fees allocated to the Wireline Competition Bureau decreased 6.89% and that of all other Bureaus increased, with the Media Bureau’s portion of the regulatory fees increasing 3.49%; and
  • Imposing a maximum annual regulatory rate increase of 7.5% for each type of license, which is essentially the rate increase for all commercial UHF and VHF television stations and all radio stations. A chart reflecting the FY 2013 fees for the various types of licenses affecting broadcast stations is provided here.

The Commission deferred decisions on the following proposals in the Notice of Proposed Rulemaking that launched this proceeding: 1) combining the Interstate Telecommunications Service Providers (ITSPs) and wireless telecommunications services into one regulatory fee category; 2) using revenues to calculate regulatory fees; and 3) whether to consider Direct Broadcast Satellite (DBS) providers as a new multi-channel video programming distributor (MVPD) category.

The Annual Regulatory Fees will be due in “middle of September” according to the FCC. The FCC will soon release a Public Notice announcing the precise payment window for submitting the fees. As has been the case for the past few years, the FCC no longer mails a hard copy of regulatory fee assessments to broadcast stations. Instead, stations must make an online filing using the FCC’s Fee Filer system, reporting the types and fee amounts they are obligated to pay. After submitting that information, stations may pay their fees electronically or by separately submitting payment to the FCC’s Lockbox. However, beginning October 1, 2013, i.e. FY 2014, the FCC will no longer accept paper and check filings for payment of Annual Regulatory Fees.

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Posted in: Cable/Satellite TV
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A few moments ago, on its own motion, the FCC released an Order extending the 2013 deadline for commercial radio and television stations (including Class A and LPTV stations) to file their biennial ownership reports with the FCC. The reports, which are normally due on November 1 of odd-numbered years, must include ownership information that is accurate as of October 1 of that year.

Because of today’s Order, however, the 2013 commercial ownership reports will be due on December 2, 2013 (December 1 is a Sunday). Despite the delayed filing date, the FCC indicates that the reports should still contain information that was accurate as of October 1, 2013.

Today’s move by the FCC is hardly unprecedented. When the FCC first implemented a uniform biennial ownership report filing deadline for commercial stations in 2009, it ended up extending the deadline a number of times because of issues related to the new reporting form, etc. Ultimately, the deadline for 2009 reports fell on July 8, 2010, creating a fair amount of confusion for station owners who had bought their stations between November 2009 and July 2010, and therefore found themselves filing ownership reports certifying as to the ownership structure of the prior station owner.

In 2011, the FCC delayed the ownership report filing deadline by just thirty days. The short delay, along with growing familiarity with the revised reporting form, resulted in a much smoother reporting process in 2011.

Now, explaining the need for an extension in 2013, the FCC states that “we are aware that some licensees and parent entities of multiple stations may be required to file numerous forms and the extra time is intended to permit adequate time to prepare such filings. We believe it is in the public interest to provide additional time to ensure that all filers provide the Commission with accurate and reliable data on which the Commission may rely for research and other purposes.” Despite the extension, the FCC is still encouraging licensees to file their ownership reports as early as possible.

While it is starting to look like these biennial extensions are becoming the norm given the complexity of reporting various ownership structures on the current form, it is risky for stations to start assuming that the deadline will always be extended. It would therefore be helpful if the FCC would permanently change the deadline so that licensees know they will always have sixty days to create and file the various biennial ownership reports required. Alternatively, the reporting form and process could be simplified so that completing the filing within 30 days would not be so difficult. Given the challenge that would present to the FCC, however, we may be seeing more of these ownership reporting extensions in the future.

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July 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 Issues “Lighting Fixture” Citation
  • Consent Decree Adopted for Sponsorship ID Violation

FCC Issues Citation to Credit Union for Operating Lighting Fixtures Causing Harmful Interference to Licensed Communications

On July 17, 2013, the FCC issued a citation to the Caribe Federal Credit Union (“CFCU”) in San Juan, Puerto Rico for operating incidental radiators and causing harmful interference to licensed communications in violation of the FCC’s rules. The FCC’s investigation into this matter arose after receiving complaints of interference from an FCC licensee.

On June 12, 2013, an agent of the FCC’s San Juan Office of the Enforcement Bureau used direction finding techniques to determine that the interference, which was transmitting on 712.5 MHz, originated from the CFCU building at 193-195 O’Neill Street, San Juan, Puerto Rico. After further testing, the FCC agent determined that the particular source of the transmission was the interior lighting on the highest ceiling in the building (fifteen light fixtures about 40 feet above the floor).

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