Posted on July 8, 2011 by David Silverman

FCC Confirms $4000 Fine For Televising Video News Release Without Sponsorship ID

 

The FCC has issued a Forfeiture Order, confirming a $4000 fine levied against a Minneapolis TV station for airing a video news release ("VNR") without sponsorship identification.  This case was previously discussed in our March 25th blog entry, when the Commission issued a Notice of Apparent Liability ("NAL") against the station for this violation.  The primary lesson to be learned from this decision is that video supplied for free may require sponsorship ID if furnished for the purpose of identifying a product or furthering a sponsor's message beyond any independent (i.e., newsworthy) reason a station has for airing it.

In arguing against the NAL, the station put forth several arguments, all of which were rejected by the FCC.  The station argued that its use of a video supplied by General Motors for a story about the popularity of convertibles in the summer was equivalent to use of a company press release, which the FCC has found acceptable in the past.  But the FCC said that use of a press release without sponsorship ID is permitted only if references to products or brand names are "transient or fleeting."  Here, by contrast, the FCC found the identification of GM cars to be "disproportionate to the subject matter of the news report."

The station also argued that it paid its parent network for the video.  While the FCC acknowleged that station payment for video usually indicates an independent motive for airing it, the FCC rejected that argument here, finding that payments between the station and its network were "little more than intercompany accounting ledger entries."  Furthermore, the network did not pay for the video, which was received unsolicited.

The Commission reaffirmed its earlier finding that this forfeiture does not violate the station's First Amendment rights or the anti-censorship provisions of the Communications Act.  Rather, the Commission noted that the sponsorship identification rules are merely disclosure requirements that do not restrict speech in any way.

This decision reinforces the need for TV stations to be aware of commercially supplied videos, whether or not they are supplied with or in exchange for money or any other consideration.  If a station's use of such video contains anything more than "transient or fleeting" images of commercial products, sponsorship identification may well be required.  In this case, the station could have complied merely by providing a visual credit stating "Video provided by General Motors."  RTNDA guidelines on the use of VNRs can be found here. 
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Posted on August 7, 2009 by Brendan Holland

Broadcasters Beware: Failure to Timely Renew Earth Stations Can Draw Large Fines

The Commission today released yet another forfeiture for what has become an increasingly common oversight among broadcasters -- the failure to timely file a license renewal application for a satellite earth station.  What made today's forfeiture unique, however, is the fact that the Commission proposed to double the amount of the forfeiture based on the size of the broadcast licensee and its presumed ability to pay such a fine.  After balancing all the factors, the Commission ultimately ratcheted the fine down a bit, but in the end it assessed a $25,000 fine for the failure to timely file license renewal applications for two earth stations and for the continued operation of those facilities without proper authority.  In light of today's decision, broadcasters should be sure to review and track the expiration dates for all FCC authorizations. 

The FCC's decision in this case makes clear that in imposing a large fine in this case it is attempting to send a message that the Licensee will heed.  Per the Commission's decision:  "This $16,000 forfeiture amount [the baseline forfeiture]  is subject to adjustment, however.  In this regard, we consider the size of the violator and ability to pay a forfeiture, as well as its prior violation of the same rule sections before us today.  To ensure that forfeiture liability is a deterrent, and not simply a cost of doing business, the Commission has determined that large or highly profitable companies such as [Licensee] , could expect the assessment of higher forfeitures for violations, and that prior violations of the same or other regulations would also be a factor contributing to upward adjustment of apparent liability.  Given [Licensee's] size and its ability to pay a forfeiture, coupled with its previous violation, we conclude that an upward adjustment of the base forfeiture amount to $32,000 is appropriate."  [Emphasis added.]  In reaching its decision, the Commission noted that the Licensee in this case was a large broadcaster with "net yearly sales" of over $110 million.  

This forfeiture should serve as a clear warning to broadcasters both big and small to review and track the expiration dates of any earth stations or other authorizations held by a broadcast station.  Rarely (if ever) will the license term of an earth station authorization coincide with the renewal of the parent broadcast station, which means it is easy for the earth station to slip through the cracks.  

The second lesson from today's decision is that the bigger you are, the harder you might fall. So larger broadcasters in particular are on notice that the FCC might increase a proposed fine to make sure that it gets your attention. And as we all know, larger does not necessarily mean more profitable. So just because a broadcaster is large, doesn't mean that it is any better positioned to absorb a large fine than a small broadcaster is to absorb a small fine. The adage about an ounce of prevention applies equally to both big and small.

That said, however, given the large number of licensees that seem to have missed the licensee renewal deadlines for earth stations in recent years, perhaps it would be worthwhile for the Commission to review its procedures for notifying licensees of the impending expiration of an earth station license. The length of earth station license terms, combined with the fact that the license terms are not in sync with the broadcast station renewal cycle has clearly resulted in numerous situations where licensees have missed the license renewal deadlines for their earth stations in recent years. While the Commission is obviously correct that it is incumbent upon licensees to be aware of the terms and expiration of their own licenses, ten years is a long license term, and, simply imposing larger and larger fines for an oversight that many broadcasters have tripped over may not be the solution. Perhaps better communication through renewal reminders, public notices, and the like could help licensees to avoid the problem entirely, which would ultimately save Commission resources and achieve the desired goal of ensuring that facilities are properly authorized.
 
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Posted on March 20, 2008 by David Oxenford

Tower Owners - Tell the FCC About Changes in Ownership

A recent decision of the FCC emphasizes that tower owners must remember to change the tower registration for any communications towers after a change in ownership, or risk a fine.  In the recent decision, the FCC canceled a $3000 fine that was imposed after an FCC inspection when it appeared a change in the ownership had not been reported - but the cancellation was not because the fine was not proper, but because the tower was in fact owned by the party who the FCC records said owned it.  All towers which must be registered with the FCC so that the FCC can notify the appropriate owner of any issues that may arise - and owners are subject to fines if it is discovered that the tower owner is not properly reported in FCC records.  In sales of broadcast stations and other communications licenses, towers are often included assets.  However, when the focus of the transaction is the sale of a radio or TV station, for which prior FCC approval is necessary, the transfer of the tower in the FCC records may well be overlooked.  No prior FCC approval for the sale of the tower is needed, and the tower is not included in the FCC authorizations reported on the applications for the sale of the broadcast licenses.  Thus, the parties must remember that the tower registration must be amended to report the new owner after the closing of the sale of the station.  Don't forget - or a fine may result if the FCC discovers that the ownership change was not reported.

 

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