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January 2014

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

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

Admonishment Issued for Program Characters Promoting a Product

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

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

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

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

Earlier this month, the FCC imposed a $7,500 fine on a Pennsylvania station for willfully and repeatedly violating the Commission’s rule regarding the public inspection file. Under Section 73.3526(e)(12) of the FCC’s Rules, a licensee must create a list of significant issues affecting its viewing area in the past quarter and the programs it aired during that quarter to address those issues. The list must then be placed in the station’s public inspection file by the tenth day of the month following that quarter.

In April of 2010, an agent from the Enforcement Bureau’s Philadelphia office found during an inspection that the licensee was missing fifteen quarters of issues/programs lists. The licensee explained in response to a subsequent Letter of Inquiry that some of the lists had been stolen or removed from the public inspection file and promised to replace the missing lists. However, in February of 2011, a follow-up investigation revealed that the public inspection file contained only one issues/programs list, which meant that there was a total of seventeen quarters of missing lists. At the time of the follow-up, the licensee said that part of the roof of a neighboring building had collapsed and destroyed the records.

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

Licensee Fined for Interfering with United States Coast Guard Operations

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

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

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

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

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

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

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Around this time every year, you typically see an abundance of articles in the trades making predictions about what the FCC will do in the coming year. It has become such a rite of the new year that I’ve even joked about it in past posts.

This year, however, I have noticed much less predictive commentary about the FCC, and it isn’t hard to understand why. 2014 is so far looking like a “to be continued” year, forcing FCC soothsayers to concede that it’s hard to say precisely how 2014 will differ markedly from 2013 at the FCC.

For example, 2014 was originally supposed to be the Year of the Broadcast Spectrum Incentive Auction. However, after the confusion surrounding the federal Affordable Care Act website demonstrated that “set a deadline to launch and it will surely be figured out by then” might not be the optimal approach to complex government projects, Chairman Wheeler agreed with much of the broadcast industry that it will take more time to get such a complicated undertaking right. As a result, he announced last month that the auction is now likely a mid-2015 event. While buying health insurance is indeed complicated, it is ditch-digging compared to designing the Broadcast Spectrum Incentive Auction (official motto: “The Broadcast Spectrum Auction–Making quantum mechanics look easy since 2010”).

Similarly, Chairman Wheeler also last month took media ownership proposals being considered internally at the FCC under the prior Chairman off the table in order to give a “fresh look” at the FCC’s media ownership rules. By statute, the FCC is required to review its media ownership rules every four years and eliminate any that are no longer in the public interest. The tabled proposals were part of the still-in-process 2010 quadrennial review, increasing the likelihood that the 2010 proceeding will now be rolled into the 2014 quadrennial review (official motto: “It’s 2014 already?”).

So does this mean 2014 will be boring for media watchers? Not at all. First, one reason for the dearth of breathless predictions is the relatively recent arrival of Chairman Wheeler. A new Chairman can bring many surprises, and as he has succeeded so far in holding many of his cards close to his vest, it’s too early to tell just what all may be on his 2014 wish list. What he will do in 2014 therefore remains more a matter of speculation than prediction, leading many prognosticators to hold back for the moment.

Second, even if 2014 ends up being a quiet year of incremental change at the FCC, there is plenty to keep things interesting on the media front outside of the FCC. First and foremost, last week’s announcement that the Supreme Court is jumping into the Aereo fray ensures that there will be some dramatic developments in 2014. Similarly, the 2014 elections promise to be a significant event for many media outlets, both in terms of bringing political ad dollars through the door while affecting the political balance of a Congress that has promised a rewrite of the Communications Act of 1934 in the next few years.

While such events will create an interesting 2014 regardless of what the FCC has on its menu, it’s meeting the daily deadlines that keeps media businesses going, and meeting the legal deadlines that keep broadcasters in particular operating. For example, while the state by state radio license renewal application filing cycle concludes in 2014, the TV renewal cycle continues on throughout this year and into 2015.

One way, however, that 2014 will differ from 2013 is that October 1, 2014 marks the every-three-years deadline for TV stations to send their must-carry/retransmission consent elections to cable and satellite carriers. Given the growing importance of retrans dollars for broadcasters, and the fact that, at least with regard to cable, a failure to make an election results in a default election of must-carry, these elections are critically important (in contrast, note that failure to send an election to DirecTV or Dish leads to the opposite result, a default election of retransmission consent, just to make it as confusing as possible).

To help broadcasters navigate the less-exciting but still critically important deadlines that keep their licenses intact, at the end of 2013 we published the 2014 edition of our annual Broadcasters’ Calendar. It can be found on the right side of the CommLawCenter main page, as well as at the Communications Publications section of Pillsburylaw.com.

Also, to stay up to date on industry events, keep an eye on our main page Interactive Calendar, as we upload numerous 2014 industry events, including NAB shows, state broadcasters associations conventions, and Pillsbury seminars and webinars on a variety of communications-related subjects. Predicting may be more fun, but knowing your regulatory deadlines keeps the lights on. Regardless, as 2014 reveals itself, I have little doubt that there will be a lot to talk about, and make predictions about, here at CommLawCenter.

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

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

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

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

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

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

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

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

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

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Updating the nation`s communications laws is a perennial hot topic in Washington, with the phrase “the law hasn’t kept up with technology” being routinely invoked by those wishing for a change in the law (whether or not technology has anything to do with it).

During the past year, however, the call to update the much amended Communications Act of 1934 has gained momentum, with Congress showing increased interest in taking on the controversial task. While modernizing the statute is not, at least conceptually, all that controversial given how often it has been updated in the past, how it is modernized promises to be a very heated debate given the high stakes involved for a variety of industries.

It is upon the shoals of such controversy that numerous past efforts to update the law have foundered, and observers couldn’t be faulted for believing that any new initiative faces a similar fate. However, what separates the current effort to modernize the statute from many past discussions is that Congress has begun taking concrete steps to move the process forward. Today, the Energy & Commerce Committee of the House of Representatives announced the release of a White Paper outlining the current state of the Communications Act.

The announcement notes that

House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) today began seeking public input as they work to review and update the Communications Act. In December, Upton and Walden announced that the committee will begin work this year on a comprehensive #CommActUpdate, including a white paper series that seeks to understand areas where the law is no longer working effectively and find ways to improve it to foster an environment for innovation, consumer choice, and economic growth. The white paper released today focuses on broad thematic concepts for updating the Communications Act.

The White Paper, which can be found here, summarizes the history of, and regulatory structure created by, the Communications Act. The Energy & Commerce Committee is asking for input from interested parties on a “series of questions posed in the white paper and is also offering an opportunity for interested parties to comment on any aspect of the Communications Act.” The specific questions include:

1. The current Communications Act is structured around particular services. Does this structure work for the modern communications sector? If not, around what structures or principles should the titles of the Communications Act revolve?

2. What should a modern Communications Act look like? Which provisions should be retained from the existing Act, which provisions need to be adapted for today’s communications environment, and which should be eliminated?

3. Are the structure and jurisdiction of the FCC in need of change? How should they be tailored to address systemic change in communications?

4. As noted, the rapidly evolving nature of technology can make it difficult to legislate and regulate communications services. How do we create a set of laws flexible enough to have staying power? How can the laws be more technology-neutral?

5. Does the distinction between information and telecommunications services continue to serve a purpose? If not, how should the two be rationalized?

While the scope of these questions is immense, the time to respond is not. The announcement of the White Paper asks that comments be submitted by January 31, 2014. Even with Christmas just behind us, it is a safe bet that numerous industry players are hastily drafting their wish lists now in hopes that Congress will be bringing them lots of legislative goodies in any Communications Act rewrite, while leaving their competitors only lumps of regulatory coal.

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As I have noted on several occasions in the past, the FCC requires that certain video programming delivered online by television stations be captioned if that programming previously aired on television with captions (for a quick refresher you can view my posts “FCC Seeks Greater Clarity on IP Video Captioning Rules”, “Second Online Captioning Deadline Arrives March 30”, and “First Online Video Closed Captioning Deadline Is Here”).

All video programming that appeared on television with captions after April 30, 2012, is considered “covered Internet Protocol (IP) video” and is required to be captioned when shown online. In January of 2012, the FCC released an Order exempting “video clips” and outtakes while requiring that television stations display captioning for prerecorded full-length programming delivered via IP if the programming had aired on television with captions. Where a captioned TV program is streamed on the Internet in segments, it must be captioned if substantial portions of the entire program are shown via those segments.

However, in the latest turn, the FCC is now asking for updated information regarding whether it should remove the “video clip” exemption. It is seeking public comment on the issue, with comments due on January 27, 2014, and reply comments due on February 26, 2014. The FCC’s Public Notice asks commenters to answer a number of questions regarding the current state of captioning of IP-delivered video clips, including:

  • What portion of IP-delivered video clips generally, and of IP-delivered news clips specifically, are captioned?
  • Has the availability of captioned versions of such clips been increasing?
  • What is the quality of the captioning on IP-delivered video clips?
  • Should the FCC require captioning of IP-delivered video clips?
  • How are the positions of commenters consistent with the 21st Century Communications and Video Accessibility Act (CVAA), its legislative history, and the intent of Congress to provide video programming access to people with disabilities?
  • What are the potential costs and benefits of requiring captioning of IP-delivered video clips?
  • How have consumers been affected by the absence of closed captioning on IP-delivered video clips, particularly news clips?
  • To the extent that some entities have already captioned these clips, what technical challenges, if any, had to be addressed?
    How does the captioning of IP-delivered video clips differ from the captioning of full-length IP-delivered video programming?
  • What are the differences between captioning live or near-live IP-delivered video clips, such as news clips, and prerecorded IP-delivered video clips?
  • If the FCC imposes closed captioning obligations on IP-delivered video clips, should the requirements apply to all video clips, or only to a subset of such clips?
  • If only to a subset, what subsets would be most appropriate and what would be the rationale for excluding others?

The FCC also asks for comment on any additional issues relevant to its determination of whether closed captioning of IP-delivered video clips should be required.

TV stations have been making greater use of their websites over the last few years to deliver video programming, and that use is only likely to increase in the years ahead as TV stations expand their use of mobile applications to reach viewers. As a result, the FCC’s new proceeding raises important issues that will affect stations’ video streaming, online marketing, and bottom line. As the saying goes, you’re not entitled to complain about an elected official if you didn’t bother to vote, and broadcasters need to speak up now if they want to avoid having to complain later about any complex or burdensome online captioning requirements that might be adopted in this proceeding.

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December 2013

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

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

$20,000 Kidvid Fine Rescinded Due to Timely Filing

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

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

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

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

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

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

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As our own Lauren Lynch Flick reported last month, the deadline for commercial broadcast stations to file their biennial ownership reports with the FCC, which the FCC in August moved from November 1st to December 2nd, and then in November moved from December 2nd to December 20th, has now been moved up, but just by a little.

In a Public Notice released today, the FCC announced that:

The Media Bureau previously issued an order granting requests to extend the 2013 biennial ownership report filing deadline to December 20, 2013. Subsequently, a power outage of the FCC headquarters building’s electrical systems, as required by the District of Columbia Fire Code, was scheduled. The Commission’s systems, including CDBS, will become unavailable after business hours on the evening of the filing deadline. The outage is scheduled to begin at 7 p.m. on December 20, 2013. Filers must complete electronic filing of their 2013 biennial Ownership Report for Commercial Broadcast Stations prior to that time to comply with the filing due date.

Because the FCC’s website has been known to struggle on days where large numbers of filings are due, broadcasters should generally avoid filing documents on their due date unless there is good reason to do so. However, one benefit of electronic filing has been the ability to file after normal business hours, when traffic on the FCC’s filing databases eases. That will not be possible this year, and for those on the West Coast, the 7 p.m. (Eastern) deadline means that they will need to get their ownership reports on file by 4 p.m. Pacific time, before their business day actually ends.

As a result, broadcasters will need to be extra vigilant this year to ensure that they don’t find themselves trying to file their ownership reports late in the day on December 20th, only to realize that the FCC’s filing system is moving at the speed of molasses from the high volume of filers. When the lights go out at the FCC on December 20th, so will your chance of a timely filing.

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

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

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

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

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

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

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

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

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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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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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