FCC Increasing Fines for Violations of Children's Programming Rules - Fines As High as $70,000 Per Station Issued

On Friday, the FCC released seven Notices of Apparent Liability for violations of children's programming rules, proposing forfeitures (i.e. fines) of $25,000 to $70,000 per station.  Most of the violations cited were overages of the commercial limits, which restrict stations to broadcasting 10.5 minutes per hour of commercial material during childrens programming on weekends and 12 minutes per hour on weekdays.  Many of these overages were for durations of 15 seconds each.  In one case, the FCC found a Pokemon program to be a program length commercial (discussed below) where a Pokemon game card with the letters "MON" was displayed for one second in a Nintendo GameBoy commercial during the show.  In addition to overages of the commercial limits, other cited violations included failing to provide program guide publishers with information regarding the target child audience of core programsfailing to update the public file regarding compliance; and failing to publicize the existence and location of the station's children's television programming reports, in addition to the program length commercial issue described above. 

The largest fine, for $70,000, was issued in a case where most of the violations were for "program length commercials", in which a commercial for a memorabilia website shown during a "Yu-Gi-Oh" television program contained a "very brief" reference to Yu-Gi-Oh trading cards.  A program length commercial occurs when an advertisement contains a mention of a character or product that is associated with the program in which the ad appears.  In these situations, the Commission fears that children will not be able to perceive the difference between the programming and the commercial, and thus treats the entire program as a commercial.  In so doing, the station is considered to have exceeded the commercial limits by the entire length of the program less the number of commercial minutes allowed.  This is done even if the commercial image of the character or other program-related material is fleeting.  We've written about the difference in treatment between a commercial overage and program length commercial before, and this case makes clear just how seriously the Commission considers the latter and how costly this can be to the offending station.

A number of lessons can be drawn from this latest group of FCC decisions:  First, human error is no excuse for violating the children's programming rules.  All of these violations were deemed "willful," meaning a conscious act, "irrespective of any intent to violate the law."  Second, it is no excuse that the violation originates at the network level.  Individual stations remain responsible for programming aired on their stations.  Third, an otherwise de minimus violation becomes significant if repeated on multiple occasions.    And in the case of program length commercials, there does not appear to be any de minimus exception.  Fourth, the FCC is admittedly bumping up forfeitures levied in previous renewal cycles, stating that previously issued  forfeitures of lower amounts "have not had a sufficient deterrent effect."  

While the FCC has always taken violations of children's programming rules very seriously, the Commission has now taken the additional step of increasing forfeitures above the base forfeiture amounts set forth in the Forfeiture Policy Statement as a means of deterring future violations.  Since human error is no shield from a forfeiture, TV stations and cable programmers must increase their vigilance against violations of all aspects of the children's programming rules.

Class A TV Stations Need to Remember They Are Subject to Full-Power Rules - Fines for Kids TV and Main Studio Violations

Last week, the FCC issued fines to Class A TV stations which seem to have forgotten the requirements for such stations. Class A TV stations were low power television stations on which, early in the decade, Congress decided to confer "protected" status, meaning that they could not be knocked off the air by a new full-power TV station or by a change in the facilities of a full-power station.  LPTV stations, by contrast, are "secondary services," meaning that they can be knocked off the air by changes in primary stations.  Class A stations were given this protection if they could show that they were providing local programming, had a local studio, and otherwise complied with all the operating requirements that a full-power station station has to meet - including a manned main studio, children's television obligations, EEO reporting, and public file requirements.  Cases released last week remind these stations that they must still meet all requirements for full power stations, as the FCC fined Class A stations for main studio, public file and children's television violations.

In one case, the FCC fined a station $1000 for violations of the main studio, main studio staffing and public file rules.  The fine was originally set at $24,000 but, as the licensee demonstrated that it had no ability to pay the higher fine, the penalty was reduced to $1000.  The FCC had tried to inspect the station, and was unable to obtain access to the transmitter site.  The Commission staff then tried to find the station's main studio, and found that no one answered the phone number listed for the station, there did not appear to be anyone at the address on file for the main studio location, and there was of course no access to the public file.  As Commission rules require that stations have main studios in their principal service areas that are manned during normal business hours, and that stations have their public file at this location, the fine was issued.

In two other cases, the FCC found Class A stations to be in violation of the Children's television rules.  In one case, a group of Class A stations were initially fined $20,000 each because of their failure to file Children's Television Reports for the stations for several years, and because they failed to publicize the location of the location for public inspection of their children's television programming reports.  Because these stations were financially unsuccessful, demonstrated through the filing of tax returns that showed that the stations could not pay any fine, the FCC dropped the fines entirely because of the licensee's demonstrated inability to pay.  Otherwise, the steep fines would have been levied.  In another case where the stations did not prove financial hardship, the failure to have a complete public inspection file, the late filing of two years worth of Children's Program Reports, and the failure to publicize the location of the children's television reports will cost the licensee $9600.

These cases remind Class A licensees to remember their obligations as primary stations.  Pay attention - or fines may be coming your way.

Broadcaster Calendar for 2010 - Important Regulatory Dates to Remember

Each year poses a new set of regulatory deadlines, and to help you remember all of those deadlines, the Davis Wright Tremaine Broadcast Group has prepared a calendar setting out the dates that broadcasters need to remember in 2010.  The calendar can be found here, and sets out FCC imposed deadlines for, among other things, Ownership Report filings (for noncommercial stations for now, until the status of the Form 323 for commercial stations is resolved), for quarterly issues programs lists, for EEO public file and Mid-Term reports, and for children's TV reports.   The calendar also provides reminders about the dates of SoundExchange filings and payment obligations, and for the political windows during which lowest unit rates apply for the Federal elections to be held in 2010 (for the House of Representatives in all states, and for the Senate in over a third of the states).  Lots of dates to remember - so check out the DWT Broadcasters Calendar.

FCC Initiates Inquiry Into Children's Television Rules

Last week, the FCC issued a Public Notice asking for information as to the compliance of television broadcasters with their obligations to provide programming that addresses the educational and informational needs of children.  While the Notice indicates that it is a follow-up to the 2004 Order addressing the children's broadcasting obligations of digital television broadcasters, the notice also refers to the $24 million settlement with Univision to resolve allegations that it had misclassified entertainment programming as being educational programming addressed to children.  The Commission asks questions in its notice as to whether television broadcasters are complying with the rules, and whether the rules provide sufficient guidance to broadcasters as to what kind of programming satisfies the rules for educational broadcasting.

We wrote about the Univision settlement agreement, here.  It is interesting that the FCC, after issuing the largest broadcast fine in history to Univision, apparently rejecting the arguments that Univision made that its programming was in compliance, now asks whether the rules provide enough guidance for broadcasters to know whether or not particular programs comply.  As we've written before in many contexts, whenever the government gets into issues of defining when speech is acceptable or not, guidelines and limits are difficult or impossible to establish.  Nevertheless, the Commission is now asking that parties help to clarify the definition of educational programming directed to children.  Comments are due 30 days after publication of this Notice in the Federal Register, and reply comments are due 15 days later.