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Earlier today, the FCC released a Sixth Further Notice of Proposed Rulemaking relating to its biennial broadcast ownership report filing requirements, reigniting a controversy over privacy, broadcast investment, and indeed, the very purpose of the reports.

In 2009, the FCC revamped its Form 323, the Commercial Broadcast Station Ownership Report, somewhat to address data collection shortcomings identified by the U.S. Government Accounting Office, but mostly to try to make the information more standardized and transparent for academic researchers wishing to generate industry-wide ownership statistics, particularly with regard to minority and female ownership. Unfortunately, the FCC’s initial effort to revise the form seemed to have focused on trying to create a form that researchers would applaud, rather than on the “user experience” of those required to fill it out. The result was an awkward effort at forcing complex ownership information into highly redundant machine-readable spreadsheet formats.

Causing particular consternation, however, was a new requirement that every officer, director and shareholder mentioned in those reports have a unique FCC-issued Federal Registration Number (FRN). Because the FCC wants researchers to be able to track the race, ethnicity and gender of each individual connected with a broadcast station, it requires that those registering to obtain an FRN provide either a Taxpayer Identification Number (TIN), or a Social Security Number (SSN). This, according to the FCC, is necessary to allow it to differentiate between individuals that may have similar names and addresses.

Not surprisingly, this requirement met with fierce opposition from numerous groups, including: (1) those who have heard the admonition of government and others to never reveal your SSN to anyone or risk identity theft; (2) broadcasters, who found less than thrilling the experience of badgering their shareholders to either hand over their SSN or take the time to apply for and deliver the FRN themselves; (iii) broadcast lawyers, trying to get ownership reports on file by the deadline despite never hearing back from a significant percentage of those asked to cooperate to provide individual FRNs; and (iv) the investor community, which is not fond of the idea of having to hand over personal information because an individual chose to buy shares of a broadcast company rather than a movie studio.

After fierce opposition and various failed efforts to get the FCC to eliminate the requirement or at least create an alternate method of obtaining an FRN that didn’t require an SSN or TIN, the FCC had a change of heart when required by the U.S. Court of Appeals for the DC Circuit to explain itself (you can read Paul Cicelski’s discussion of that response here). The FCC defended the new ownership report filing requirements by telling the court that no one would be forced to hand over their SSN or TIN, as it was going to permit broadcasters to apply for a Special Use FRN (SUFRN, one of the most descriptive acronyms you will find) in cases where a party refuses to allow use of its SSN/TIN. In light of this representation, the court declined to intervene, and the FCC proceeded with implementation of the new ownership report form and requirements.

With the availability of SUFRNs and various other changes to the ownership report form and filing system, the FCC was finally able to make the oft-extended filing deadline stick, with commercial broadcasters filing their November 1, 2009 ownership reports by a July 8, 2010 deadline. However, the effort at making the data more accessible for researchers ended up making the form very burdensome for broadcasters required to complete and submit the reports. The biggest issue is structural–requiring the submission of the exact same information over and over in a filing system never lauded for its user-friendliness. During the numerous extensions of the filing deadline, the FCC did incorporate some features like copy and paste to lessen the burden of creating duplicative reports, but no tech feature can overcome the burden created by requiring the filing of the exact same ownership information over and over again for each station in a group rather than just reporting the ownership of that group (once) and the stations that are in it. Because of this, even a relatively small broadcast group can find itself filing well over a hundred ownership report forms.

The irony is that even media researchers–the very group for which this unwieldy reporting system was created–have begun to complain that the sheer volume of filings makes it difficult to sort through the mass of repetitive data. Many communications lawyers seem to agree, finding the “old” ownership reports far more useful in understanding a station’s ownership than the current edition.

Still, broadcasters and the FCC seemed to have reached a detente over the reports, with broadcasters quietly grumbling to themselves about the mind-numbing repetitiveness of drafting and filing the reports, but (having seen in the earlier iterations of the “new” report) knowing how much worse it could be. That detente may have ended today when the FCC released the Sixth Further Notice of Proposed Rulemaking, which tentatively concludes that the need to uniquely identify each person connected with a broadcast station is so strong that it must end the availability of SUFRNs and require that all reported individuals get an FRN based upon their SSN or TIN.

While the FCC’s conclusions are “tentative”, and it requests comment on these and many other questions relating to the ownership report, you can feel the collective chill go down broadcasters’ spines as the FCC proceeds to suggest that it could fine individuals who fail to provides an SSN/TIN-based FRN, and queries whether broadcasters should be required to warn their shareholders of that. Telling shareholders or potential shareholders that they face fines for electing to invest their money in broadcasting is not exactly the best way to attract investment to broadcasting, including investment by the minority and female investors the FCC so clearly wants.

But it is that last issue that raises the most curious point of all: to get minority and female ownership information, the FCC seeks to implement an awkward, intrusive, burdensome, privacy-insensitive ownership reporting regime premised on the need for both massive ownership filings and the tracking of individuals by their SSN to determine minority and female ownership trends in the industry. Wouldn’t it be far simpler, less intrusive, and less burdensome to just ask broadcasters to provide in their ownership reports (or elsewhere) aggregate data on their minority and female officers, directors, and shareholders? Researchers could then just utilize that data to create industry totals rather than having to wade through mountains of unrelated ownership data to derive it themselves.

Instead of this simplified approach, the FCC seems intent upon using the clumsy mechanism of ownership reports to assess minority and female representation in the industry, stating in the Sixth Further Notice of Proposed Rulemaking that “Unlike many of our filing obligations, the fundamental objective of the biennial Form 323 filing requirement is to track trends in media ownership by individuals with particular racial, ethnic, and gender characteristics.” For those of us who have been in the industry for quite some time, that claim is surprising, as the very first sentence of Section 73.3615, the FCC rule that governs the filing of ownership reports, states: “The Ownership Report for Commercial Broadcast Stations (FCC Form 323) must be electronically filed every two years by each licensee of a commercial AM, FM, or TV broadcast station (a “Licensee”); and each entity that holds an interest in the licensee that is attributable for purposes of determining compliance with the Commission’s multiple ownership rules.”

In attempting to convert a reporting obligation designed to ensure multiple ownership rule compliance into an academic research tool on minority and female broadcast ownership, the FCC undermines both goals. Broadcasters have routinely provided the minority and female ownership data the FCC seeks without fuss, and can hardly be faulted for wishing to do so in a straightforward manner that: (a) doesn’t require unnecessarily complex and redundant filings; and (b) doesn’t require them to badger their shareholders for private information while threatening their shareholders with federal fines for failing to comply. Rather than “doubling down” on a flawed approach, perhaps it is time for the FCC to step back and reassess the most efficient way of obtaining the desired information–more efficient for broadcasters, more efficient for the FCC, and more efficient for media researchers.

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December 2012

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 Multiple Forfeitures for Unauthorized Marketing of Transmitters
  • FCC Proposes $35,000 in Fines for Unauthorized Radio Operations

Three Years Later, FCC Pursues Unauthorized Marketing of Transmitters

This month, the FCC issued Forfeiture Orders against two companies for marketing unauthorized transmitters, with both orders following up on Notices of Apparent Liability for Forfeiture (NAL) issued in 2009.

In one instance, the FCC issued a Forfeiture Order for $18,000 against a company that marketed an unauthorized FM broadcast transmitter in the U.S. and provided incorrect information to the FCC “without a reasonable basis for believing that the information was correct.” The FCC first issued an NAL against this company in 2009, after an in-depth investigation by the Spectrum Enforcement Division, alleging that the company was marketing several FM transmitters, including one model of transmitter that was not verified to comply with FCC regulations. The FCC’s rules prohibit the manufacturing, importation, and sale of radio frequency devices that do not comply with all applicable FCC requirements, and Section 73.1660 of the FCC’s Rules requires that transmitters be verified for compliance. If a transmitter has not complied with the verification requirements of Section 73.1660, then the transmitter is considered unauthorized and may not be marketed in the United States.

In response to multiple Letters of Inquiry, the company attempted to demonstrate the transmitter’s compliance with FCC regulations by submitting verification information for a component part of the transmitter. The FCC concluded, however, that “[b]ecause transmitters are a combination of several functional components that interact with one another … verification of [one part] incorporated into a transmitter is insufficient to verify the final transmitter.”

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Yesterday, the FCC adopted a Fifth Order on Reconsideration and a Sixth Report and Order (Sixth R&O) designed to facilitate the processing of approximately 6,000 long-pending FM translator applications and to establish new rules for low power FM (LPFM) stations. The result is that the FCC anticipates opening a filing window for applications for new LPFM stations in October 2013.

A number of parties had filed petitions for reconsideration (in response to the FCC’s March 19, 2012 Fourth Report and Order in this proceeding) challenging the FCC’s new limit on the number of translator applications that could be pursued both on a per-market basis and under a national cap. In response to those challenges, the FCC’s just released Fifth Order on Reconsideration: (1) establishes a national limit of 70 applications so long as no more than 50 of those applications specify communities located inside any of the markets listed in Appendix A to that Order; (2) increases the per-market cap from one application to up to three applications per market in 156 larger markets, subject to certain conditions; and (3) clarifies the application of the per-market cap in “embedded” markets.

In the Sixth R&O, the FCC laid the groundwork for introducing LPFM stations to major urban markets. As mandated by the Local Community Radio Act, the Sixth R&O also establishes a second-adjacent channel spacing waiver standard and an interference-remediation scheme to ensure that LPFM stations operating with these waivers will not cause interference to other stations. In addition, the Sixth R&O creates separate third-adjacent channel interference remediation procedures for short-spaced and fully-spaced LPFM stations, and addresses the potential for predicted interference to FM translator input signals from LPFM stations operating on third-adjacent channels.

The Sixth R&O also revises the following LPFM rules to better promote the localism and diversity goals of the LPFM service:

  • modifies the point system used to select among mutually exclusive LPFM applicants by adding new criteria to promote the establishment and staffing of a main studio, radio service proposals by Tribal Nations to serve Tribal lands, and the entry of new parties into radio broadcasting. A “bonus” point also has been added to the selection criteria for applicants eligible for both the local program origination and main studio credits;
  • clarifies that the localism requirement applies not only to LPFM applicants, but to LPFM permittees and licensees as well;
  • permits cross-ownership of an LPFM station and up to two FM translator stations, but imposes restrictions on such cross-ownership to ensure that the LPFM service retains its local focus;
  • provides for the licensing of LPFM stations to Tribal Nations, and permits Tribal Nations to own or hold attributable interests in up to two LPFM stations;
  • revises the existing exception to the cross-ownership rule for student-run stations;
  • adopts mandatory time-sharing procedures for LPFM stations that operate less than 12 hours per day;
  • modifies the involuntary time-sharing procedures, shifting from sequential to concurrent license terms and limiting involuntary time-sharing arrangements to three applicants;
  • eliminates the LP10 class of LPFM facilities; and
  • eliminates the intermediate frequency protection requirements applicable to LPFM stations.

If some of the above changes seem a bit cryptic, it is because the FCC has issued only a News Release briefly summarizing the changes. Once the FCC releases the full text of the orders, we will have a much more detailed understanding of the modifications. The full texts will hopefully become available in the next few days. In the meantime, radio broadcasters, particularly those with large numbers of FM translator applications pending, will be doing their best to assess how these FCC actions will affect their current and proposed broadcast operations.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by January 10, 2013, reflecting information for the months of October, November, and December 2012.

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.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations. The lists also provide important support for the certification of Class A station compliance discussed below. We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness. Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during the license term. Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs. Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

It should be noted that the FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have fully complete Quarterly Lists or that do not timely place such lists in their public inspection file.

A PDF version of this entire article can be found at Fourth Quarter Issues/Programs List Advisory for Broadcast Stations.

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November 2012

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 Punishes the Operators of an Unlicensed FM Station
  • FCC Investigates Antenna Structure Violations

Recurrent Unlicensed Operations Lead to Large Forfeitures

Last month, we wrote about a case in which the FCC fined the renter of a property after discovering an unlicensed radio transmitter, even though the renter claimed the equipment was operated by a third party. This month, the FCC again went after the renters of a property on which there was an unlicensed transmitter, issuing two $20,000 Forfeiture Orders. In this case, however, the renters left little doubt that they were directly responsible for the operation of the unlicensed radio station.

In October 2011, agents from the Miami office of the Enforcement Bureau identified the source of radio frequency transmissions on the 101.1 MHz frequency as an FM antenna mounted to a structure on a property in Florida. The signal strength exceeded that permitted for unlicensed broadcasting, and the agents later determined that no authorization had been issued for the operation of an FM broadcast station at that location. In addition, the agents were able to hear live broadcasts from the station and found that the on-air DJ was promoting the station on several web sites and Facebook pages.

During a subsequent February 2012 visit, the agents inspected the property and found radio transmitting equipment installed in a storage room. The property owner indicated that the space was rented by two men, and provided contact information for the renters to the agents. The agents called one of the renters, who asked the agents what would happen to the radio transmitting equipment. The renter contacted by the agents then called the other renter, who went to the station, told the agents the equipment was his, and removed the equipment from the location.

In July 2012, the FCC issued two $20,000 Notices of Apparent Liability for Forfeiture (NALs) for operating without FCC authorization – one against the renter identified as the DJ of the station, and one against the renter who admitted it was his equipment. The base forfeiture for operating without authorization is $10,000. However, the FCC determined an upward adjustment of $10,000 was warranted for each of the renters because both had previously been involved in operating an unlicensed station on a different frequency in a different part of the state, and the FCC had issued previous Notices of Unlicensed Operation to the renters for that station.

Having not heard back from the renters in response to the July NALs, the FCC followed up the NALs by issuing two $20,000 Forfeiture Orders against the renters this month.

Faded Antenna Structures Garner Notices of Violations

Six towers in Oklahoma and one in New Mexico were the subject of Notices of Violation (NOVs) earlier this month after FCC agents noted that the paint on the towers was faded and chipped. Some of the NOVs also noted that the respective structure owners had failed to post the Antenna Structure Registration Number (ASRN) at the gate of the surrounding fence, and that any signage at the base of the structure was not visible from the gate of the fence.

In accordance with the rules of the FCC, owners of antenna structures must regularly inspect those structures to ensure the structures continue to comply with all FCC requirements. Indeed, the rules require owners to inspect the antenna structure’s lights (manually or by automatic indicator) at least once every 24 hours, and to inspect all lighting control devices, indicators and alarms every three months. Owners must also maintain a record of any lighting malfunctions, including the nature of the malfunction, the date and time of the malfunction, the date and time of FAA notification, and the date, time and nature of repairs.

As this month’s NOVs explicitly note, the FCC is free to take further steps against the tower owners, including issuing fines, and often does. Tower owners should therefore be careful to ensure that:

  • The ASRN is conspicuously displayed so that it is readily visible from the base of the structure;
  • Materials used to display ASRN are weather-resistant and large enough to be easily seen from the base of the structure;
  • Where the tower is surrounded by a fence, the ASRN is posted where it will be readily visible from the fence gate;
  • Antenna structures exceeding 200 feet are painted and lighted according to FAA specifications; and
  • Antenna structures are cleaned or repainted as often as is necessary to maintain good visibility.
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October 2012

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 Takes Action against Illegal Jamming Devices
  • Unlicensed Transmitter Gets Renter into Trouble

FCC Goes After Marketing and Sale of Illegal Jamming Devices

The FCC’s enforcement efforts this month focused heavily on the marketing and sale of illegal signal jamming devices. The advertising, sale, or operation of devices which jam GPS, cell phone, or other wireless communications is prohibited under Section 301 of the Communications Act as well as under the FCC’s Rules. As the Commission has previously noted, it is unlawful to use a jammer, even on private property. In the span of a week this October, the FCC issued eight “Citation and Order” actions against companies and individuals it determined were unlawfully advertising jammers for sale on Craigslist.org.

In those orders, the FCC emphasized that it views unlawful operation of jammers as a public safety hazard. In several of the orders, the Enforcement Bureau wrote that it is “increasingly concerned that individual consumers who operate jamming devices do not appear to understand the potentially grave consequences of using a jammer. Instead these operators incorrectly assume that their illegal operation is justified by personal convenience or should otherwise be excused.” Because of this, the FCC cautioned that going forward, it “intend[s] to impose substantial monetary penalties, rather than (or in addition to) warnings, on individuals who operate a jammer.” The FCC added that “substantial monetary penalties” in these cases would mean up to $16,000 per violation, or, in the case of a single continuing violation, $16,000 per day up to a total of $112,500.

The Enforcement Bureau indicated that the FCC will continue to target individuals and companies involved in the illegal advertisement, sale, or operation of jammers. In fact, on October 15th, the Bureau launched a dedicated jammer tip line – 1-855-55-NOJAM – to make it easier for members of the public to report the use or sale of illegal jammers. It also released an Enforcement Advisory explaining the FCC’s “zero tolerance” policy regarding the unlawful sale and operation of jammers. Based on these recent actions by the FCC, we expect to see a growing number of signal jamming fines in the months ahead.

Turning a Blind Eye to Illegal Operations Is Also a Violation of the FCC’s Rules

This month, the FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against a property renter after finding that an unlicensed transmitter was being operated on his leased property. What makes the case interesting is that the renter claimed the equipment was not his, and was actually operated by unnamed third parties (the classic “not my stash” defense).

In September 2012, agents from the FCC’s Enforcement Bureau, responding to a complaint, used direction-finding equipment to locate the source of the suspect radio transmissions. They found an FM transmitting antenna mounted to the chimney of a residence. The antenna was emitting signals exceeding the FCC’s limits for unlicensed operation under Part 15 of the FCC’s Rules. Upon subsequent inspection of the FCC’s records, the agents determined there was no FCC authorization for the antenna, nor for any antenna near that address.

The following day, the agents returned to the property with the property owner and found a transmitter located in a locked basement room in the residence. The agents then questioned the renter of that room about the antenna, transmitter, and an accompanying computer which fed audio to the transmitter. The renter admitted to having installed the equipment, but denied that he was operating the unlicensed station. He claimed that unnamed individuals owned and operated the equipment and gave him money each month to pay the rent. The renter further claimed that the operators had not provided him with their names, but had informed him that the FCC might inspect the station and order him to cease operations because of unlawful operations.

Apparently not convinced by the renter’s defense, the FCC issued an NAL for $10,000 against the renter for operating a station without FCC authorization. The NAL clarified that “operating” a station means both the technical operation of the station and the “general conduct or management of a station as a whole.” Noting that the renter himself acknowledged that he had been told by the unnamed “operators” that the operation was illegal, the FCC indicated that “in spite of the warning, [the renter] nonetheless allowed the station to continue to operate in his basement.” Under the circumstances, the FCC concluded that the renter’s actions qualified as being involved in the general conduct or management of a station, defined to include “any means of actual working control over the operation of the [station].” The FCC therefore concluded that the renter did in fact “operate” the unlicensed radio station, justifying the proposed fine. In addition, the FCC noted that it had difficulty believing the renter’s claimed defense, indicating that “we find it implausible that [the renter] (or anyone for that matter) would install radio equipment, rent space, allow for unlawful operations in the rented space, and incur potential financial and other liability on behalf of complete strangers.”

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

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In what seems to be the longest presidential campaign in history, tomorrow, September 7th, marks the beginning of the final stretch. That’s the first day of Lowest Unit Charge Season, the 60-day period before the November 6th, 2012 general election. During that time (which also occurs in the 45 days before a primary election), broadcast stations may charge no more than their lowest rate for each particular class of ad time purchased for a “use” by a legally qualified candidate.

Of course, while the concept sounds simple enough, its implementation at stations with dozens of different classes of ad time has proven to be a biennial headache for broadcasters. However, particularly for stations in political swing states, it can be a fairly profitable headache, and well worth the regulatory aspirin needed to get through it.

Contrary to a common misconception, Lowest Unit Charge applies to all legally qualified candidates during the LUC window, and not just to federal candidates. Also, keep in mind that the 60-day Lowest Unit Charge window is relevant only to the issue of rates. Other political broadcast rules, like the requirements for reasonable access for federal candidates and equal opportunities apply as soon as there are enough legally qualified candidates to trigger them (one in the case of reasonable access, and at least two in the case of equal opportunities, since there has to be a competing candidate to demand an equal opportunity in response to the first candidate’s airtime).

If the statements above have left you perplexed, confused, or questioning the very meaning of your existence, you should definitely take some time to look at the current edition of our Political Broadcasting Advisory. The Advisory fills in lots of detail on the matters discussed above, as well as myriad other issues created by the complexities of selling (or buying) political ad time in a regulated environment.

So, update the rate card attached to your Political Disclosure Statement, and get ready for the final stretch of a political season that has been excruciatingly long for viewers and listeners, but which will be over all too quickly for many broadcasters.

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July 2012
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 is a special issue regarding recent FCC actions that provide a detailed (and expensive) look at Section 73.1206, the prohibition on recording telephone calls for broadcast.

FCC Issues a Total of $41,000 in Fines for Broadcaster Airing Prank Telephone Calls

The close of August in Washington, D.C. has brought with it a surge of beautiful weather, baseball excitement (for the first time in recent memory), and … forfeiture orders related to the improper recording of telephone calls for broadcast. On August 22nd, the FCC issued two forfeiture orders assessing a combined $41,000 in fines against licensees owned by the same parent company for violations of the telephone broadcast rule.

The telephone broadcast rule, Section 73.1206 of the Commission’s Rules, requires that, “[b]efore recording a telephone conversation for broadcast, or broadcasting such a conversation simultaneously with its occurrence, a licensee shall inform any party to the call of the licensee’s intention to broadcast the conversation, except where such party is aware, or may be presumed to be aware from the circumstances of the conversation, that it is being or likely will be broadcast.” While the rule language only talks about providing notice to the calling party, the FCC has reiterated many times that when a station employee intends to record a call for broadcast or broadcasts the call live, the employee must also obtain the party’s consent before recording the call or going live.

Both orders released on August 22nd involved a finding that the licensee had violated this rule. The first order involved prank calls made in April 2006 by radio personalities to members of the public during a comedy segment of the station’s morning show. In one conversation, the caller pretended to be an intruder hiding under the bed of the person receiving the call; in another, the caller pretended to be a loan shark bent upon collecting a debt.

The FCC began investigating the prank calls after receiving a complaint from a station listener. During the investigation, the licensee indicated it was unable to confirm or deny whether the prank calls aired on its morning show, and could not provide a recording or transcript of the program. The licensee acknowledged, however, that the program identified in the complaint was aired on the station and was simulcast on two co-owned stations.

The second forfeiture order released on the 22nd also involved the broadcast of an alleged prank call in which the caller pretended to be a hospital employee who then informed the call recipient that the recipient’s husband had been in a motorcycle accident and died at the hospital. When questioned about the incident, the licensee told the FCC that its parent company had contracted with an outside vendor who made and recorded the call. The licensee admitted that it broadcast the call on multiple occasions.

In the first case, the FCC had proposed a $25,000 fine. In the second case, the FCC had proposed a $16,000 fine. In both cases, the licensee urged cancellation of the proposed fines, to no avail. In batting down a myriad of arguments raised by the licensees, the FCC affirmed not only its broad investigative powers to enforce Section 73.1206, but also the licensees’ responsibility to both adhere to and demonstrate their adherence to the Commission’s Rules.

These two decisions provide an excellent primer for broadcasters on the FCC’s enforcement of the telephone broadcast rule, as between them, the FCC addressed a multitude of defenses raised by the licensees, ultimately concluding that none of those defenses could prevent the imposition of very substantial fines. More specifically, the FCC shot down each of the following licensee arguments:

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July 2012
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 Assesses $68,000 in Fines for Unauthorized STL Operations
  • EAS Failures Lead to $8,000 Fine

Licensee in Wyoming Slammed with $68,000 in Proposed Fines for STL Operations
July was not a good month for the licensee of FM radio stations located in Casper, Wyoming. The FCC issued four separate Notices of Apparent Liability for Forfeiture (“NAL”) against the licensee for a total forfeiture amount of $68,000.

In August 2011, an agent from the FCC’s Enforcement Bureau inspected the main studios of the licensee’s four FM radio stations and the corresponding studio transmitter links (“STL”) for each station. In the first of the four NALs, the agent discovered that although the station’s STL was operating on its authorized frequency, the STL was operating at the site of the station’s main studio, 0.3 miles away from the STL’s authorized location.

In December 2011, the Enforcement Bureau issued a Letter of Inquiry (“LOI”) to investigate. In the licensee’s delayed response to the LOI in April 2012, the licensee admitted that the STL had been the primary delivery mechanism for the FM station’s programming since 2001 and that an application to change the location of the STL “should have been filed” when the station moved its main studio ten years earlier. Only after the fact (in May 2012) did the licensee file an application to modify the STL’s authorized location. According to Section 1.903(a) of the FCC’s Rules, stations must operate in accordance with applicable rules and with a valid authorization granted by the FCC, and the base forfeiture for operating at an unauthorized location is $4,000. Here, the FCC decided that an upward adjustment of an additional $4,000 was warranted because the STL had been operating at the unauthorized location for ten years.

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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 2012 (FY 2012). The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

In May of this year, the FCC issued a Notice of Proposed Rulemaking (“NPRM”) regarding its FY 2012 payment process and the proposed fee amounts for each type of FCC license. In large part, the FCC adopted its proposals without material changes. With respect to the non-fee related proposals, the FCC imposed a new requirement that refund, waiver, fee reduction and/or payment deferment requests must be submitted online rather than via hardcopy. The FCC also adopted its proposal to use 2010 U.S. Census data in calculating regulatory fees. With respect to fees, Commercial UHF Television Station fees increased across the board, except for the fee associated with stations in Markets 11-25. In contrast, Commercial VHF Television Station fees decreased across the board, except for those stations in Markets 11-25. The fees for most categories of radio stations increased modestly. A chart reflecting the fees for the various types of licenses affecting broadcast stations is provided here.

The FCC will release a Public Notice announcing the window for payment of the regulatory fees. As has been the case for the past few years, the FCC no longer mails a hardcopy 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.

Finally, as Paul Cicelski of our office noted earlier this year, the FCC is re-examining its regulatory fee program and has initiated the first of two separate NPRM proceedings seeking comment on issues related to how the FCC should allocate its regulatory costs among different segments of the communications industry. The FCC expects to release the second NPRM “in the near future” and implement any changes from those rulemakings in time for FY 2013.

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