The FCC this week issued a Notice of Apparent Liability proposing a $233,000 fine to Cumulus Media for violations of the sponsorship identification rules. The fine illustrates not only how seriously the FCC takes its sponsorship identification rules (particularly in the context of political and issue advertising) but also the how aggressively the FCC can act for even the slightest violation of a consent decree involving a prior violation of its rules. If the FCC catches you once in a rule violation, don’t get caught again for the same violation – and if you agree to the terms of a consent decree in connection with that first violation, by all means abide by the letter of that decree or the FCC will not hesitate to exercise its full enforcement power.
This case involves alleged violations by Cumulus Media. Three years ago, Cumulus entered into a consent decree with the FCC agreeing to pay a $540,000 penalty after admitting that it did not include a full sponsorship identification disclosure on issue ads supporting government approval of an electrical utility project in New Hampshire (see our article here on that consent decree). As part of the consent decree, the company agreed to a 3-year compliance program to educate its personnel about the FCC’s sponsorship identification rules, to appoint a compliance officer to oversee compliance with the rules and answer questions, and to report to the FCC within 15 days any violations of these FCC rules. In the Notice released this week, the FCC alleged that Cumulus reported that it had in two instances aired ads without the proper identification – each set of ads running 13 times before the lack of a proper identification was caught and corrected. In one instance, the violation was reported to the FCC within two weeks, but in the other case, it was not reported to the FCC for approximately 8 months. Based on this instance of late reporting, and the 26 sponsorship identification violations, the FCC proposed the $233,000 fine. How did they come up with that number?
The FCC’s base fine for each violation of its sponsorship identification rules is $4000 per violation. Because of the 2016 violation, the FCC determined that each of the new violations should be fined at twice that level, as the licensee should have learned from its prior mistakes. The FCC considers each airing of the ad to be a separate violation (see this article about a prior case where this policy was applied). Thus, the 26 ads without the proper identification times $8000 led to a fine of $208,000. The FCC then decided, because of the one late reporting of the violations, the fine should be increased by $25,000 for not adhering to the terms of the consent decree. Adding those two figures, the FCC arrived at the proposed fine of $233,000.
While this week’s release does not detail the specifics of the alleged violations, the first appears to have been a commercial message aired on multiple stations a total of 13 times. The second was a spot aired in connection with the Georgia governor’s election last year. Neither spot appears to have run for more than a few days, and in both cases, Cumulus stated that it had not only caught and corrected the violations, but it had also conducted training on the rules after being alerted to the problems. These violations would seem like the kinds of issues that could arise at any station when a spot with an inadequate sponsorship tag slips on to the air unnoticed. It would seem laudable that Cumulus apparently caught and corrected the problems quickly, yet the FCC came down hard on the company, with one Commissioner issuing a dissenting statement suggesting that the penalty was not enough. The message to broadcasters? The FCC is still watching very closely so don’t mess up – and if you do and are subject to FCC penalties, by all means do not do it again.