FCC Fines

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At this week’s NAB Convention, issues about FM translators and pirate radio dominated the radio news from the sessions that featured FCC speakers. On the translator front, FCC Chairman Pai, in his speech to the convention, announced that there is a Notice of Proposed Rulemaking that has been drafted and is being considered by…

The FCC yesterday announced that they had seized the equipment of two Boston-area pirate radio stations that had refused to cease operations after receiving FCC notices to do so. The FCC Public Notice on the seizure thanks the US Attorney’s Office and US Marshall’s Office, and the Boston Police Department, for assisting the FCC Field Office in carrying out the seizure authorized by the Communications Act for stations operating without a license. Seizure of equipment is carried out pursuant to Section 510 of the Communications Act, and generally requires that the US Attorney receive approval of a US District Court before the equipment can be seized Thus, the cooperation of the US Attorney’s office in a local jurisdiction is vital to conducting a seizure such as that done in Boston. Commissioner O”Rielly, who has been a vocal proponent of increased actions against pirate radio (see our post here) issued a statement commending the action and calling it a complement to legislative action to enhance fines on such stations and impose clear liability on landlords who host pirate operations (see our post here about a case where the FCC has already put landlords on notice of potential liability for pirate radio operations where they had clear involvement in such operations).

Legislative action on pirate radio seems to be in the works. To combat pirate radio operations, the House Subcommittee on Communications and Technology last week held a hearing (video available here) on proposed bills to amend the Communications Act, including one called the Preventing Illegal Radio Abuse Through Enforcement (PIRATE) Act (see discussion draft here). The draft bill would raise potential fines on pirate radio operators to $2,000,000, and fines of up to $100,000 per day for violations of the Communications Act and FCC rules related to such pirate operations. It would eliminate the need to provide pirates a Notice of Apparent Liability, with the opportunity to respond, before a fine is issued to an operator of a pirate radio station, if the operator is caught in the act of operating the illegal station. The Act would also make clear that those who facilitate pirate radio operations are also liable for up to $2,000,000 fines (“facilitates” is defined to include providing property from which the pirate operates or money for their operations). The draft bill also calls on the FCC to, twice each year, dedicate staff to “sweep” the top 5 radio markets determined to have the most pirate activity to identify pirates and seize their equipment, and authorizes states to enact their own laws making such operations illegal as long as the determination of who is a pirate radio station is made by the FCC. 
Continue Reading FCC Continues War on Pirate Radio – Seizes Equipment of Boston Stations While New Legislative Tools May Be on the Way

With April Fools’ Day falling on a Sunday this year, perhaps the potential for on-air pranks is lessened. But, then again, who knows what weekend talent may be planning? So, as we do every year about is time, we need to play our role as attorneys and ruin the fun by repeating our reminder that broadcasters need to be careful with any on-air pranks, jokes or other bits prepared especially for the day.  While a little fun is OK, remember that the FCC does have a rule against on-air hoaxes. While issues under this rule can arise at any time, broadcaster’s temptation to go over the line is probably highest on April 1.  The FCC’s rule against broadcast hoaxes, Section 73.1217, prevents stations from running any information about a “crime or catastrophe” on the air, if the broadcaster (1) knows the information to be false, (2) it is reasonably foreseeable that the broadcast of the material will cause substantial public harm and (3) public harm is in fact caused.  Public harm is defined as “direct and actual damage to property or to the health or safety of the general public, or diversion of law enforcement or other public health and safety authorities from their duties.”  Air a program that fits within this definition and causes a public harm, and expect to be fined by the FCC.

This rule was adopted in the early 1990s after several incidents that were well-publicized in the broadcast industry, including one case where the on-air personalities at a station falsely claimed that they had been taken hostage, and another case where a station broadcast bulletins reporting that a local trash dump had exploded like a volcano and was spewing burning trash.  In both cases, first responders were notified about the non-existent emergencies, actually responded to the notices that listeners called in, and were prevented from responding to real emergencies.  In light of this sort of incident, the FCC adopted its prohibition against broadcast hoaxes.  But, as we’ve reminded broadcasters before, the FCC hoax rule is not the only reason to be wary on April 1. 
Continue Reading With April Fools’ Day Coming Up, Plan Your On-Air Pranks with Care – Remember the FCC Hoax Rule

The FCC’s Audio Division yesterday issued “Notices of Apparent Liability for Forfeiture” to five radio stations; all owned by Cumulus Licensing. Each of these notices proposed a fine (called a “forfeiture” in FCC-speak) of either $10,000 (here) or $12,000 (here, here, here and here), all for violations of the FCC public file rules. All of these stations, located in close proximity in eastern South Carolina, were missing numerous sets of Quarterly Issues Programs lists that should have been included in their public files in the last license renewal term. The stations voluntarily reported that the lists were missing in their license renewal applications filed in 2011. In clearing up these long-pending renewals, the FCC proposed to issue these fines – again emphasizing that even this deregulatory FCC does not hesitate to enforce the rules that remain on the books (see our previous warnings here and here).

The release of these proposed fines also sends a warning to broadcasters about to convert to the online public inspection file (as all radio stations will need to have their public file online by March 1 – see our discussion of the online public file here), that these reports will be able to be viewed by anyone, anywhere, to see if they have been prepared and timely placed into the stations online public file. Each document deposited in the public file is date-stamped as to when it was uploaded. So anyone trying to assess a station’s compliance with the public file rule can see whether the Quarterly Issues Programs list was uploaded to the file and whether the upload was timely – within 10 days of the end of each calendar quarter.
Continue Reading Five Fines of $10,000 or More Proposed for Radio Stations Missing Quarterly Issues Programs Lists in their Public File – New Concerns for Stations as Public File Goes Online and License Renewal Approaches

Noncommercial broadcast stations are licensed to be just that – noncommercial. These stations can run “underwriting announcements” acknowledging commercial businesses that provide financial support to the stations, but such announcements must meet strict guidelines – including restrictions on “calls to action,” prohibitions on statements about prices or discounts, and requirements that no qualitative claim about the sponsor’s products or services can be made. From time to time, the FCC will fine or admonish noncommercial stations that run underwriting announcements that are too commercial. Yesterday, the FCC announced that its Enforcement Bureau had reached a Consent Decree (available here) with a noncommercial broadcaster who acknowledged having run underwriting announcements that had exceeded the bounds set by the rule. To settle the complaints about its announcements at stations in California and Arizona, the licensee agreed to pay the FCC a penalty of $115,000. According to the FCC Press Release on the matter, this was the highest penalty ever imposed on a noncommercial broadcaster for violations of the underwriting rules.

In addition to the fine, the licensee had to agree to a one-year moratorium on underwriting announcements from commercial entities. In addition, the licensee had to institute a compliance plan to educate its employees about the requirements of the FCC rules on underwriting, including a requirement that it create a training manual for use by its staff, and that it appoint a compliance officer to oversee compliance with the underwriting restrictions. For four years, the licensee needs to report to the FCC any instance where they violate the rules, and file a yearly report detailing their efforts to maintain compliance and certifying either that there have not been any violations of the rules or, if such a certification cannot be made, the details of any violations.
Continue Reading FCC Reaches Consent Decree with Noncommercial Broadcaster Imposing Largest Fine Ever Issued for Underwriting Violations – $115,000

Last week, Commissioner O’Rielly published an article on the FCC blog, suggesting that one of the next steps in the FCC’s Modernization of Media Regulation initiative should be the review of the FCC rules setting obligations for television stations to air educational and informational programming directed to children.  Stations are required to air an average of 3 hours of educational and informational programming per programming stream, and there are a host of related obligations generally requiring that the programming be run at regular times and be at least 30 minutes in length.  The rules also limit the ability to count repeats of such programs and requires that this programming be advertised in local programming guides.  We have written about fines or warnings that the FCC has issued in many cases, including questioning whether programming classified as educational and informational really should have been classified in that manner, for failing to have an onscreen “E/I bug” labeling, for counting one-time programs to meet the requirement for 3 hours of regularly scheduled programs, the programming as educational, and for failing to publish information about these programs in local program guides.

The Commissioner raised the question of whether the obligation, adopted in the 1990mos (see the FCC order here) really continues to make sense in today’s media marketplace.  So much has changed in the last 23 years, including the explosion of different sources of educational programming for children – including cable, Internet and other sources.  No longer are TV stations the only sources of video programming – and, in a world where even Big Bird has moved to a cable platform, there is a real question as to whether over-the-air television stations are even the best platforms for the delivery of such programs.  With so many competing sources of children’s programming, the Commissioner asked whether there is really a need for each station to do 3 hours of such programming on each of its channels.  Certainly, there have been questions of whether quality programming can be produced to meet the obligations for each channel and subchannel, when the new program sources are splintering the potential audience for any such programs.  The Commissioner also suggests that the current rules limit creativity in programming – forcing broadcasters to spend money on 30-minute on-air programs and not on other potential ways of meeting the needs of children, e.g. through short-form programs or online information.
Continue Reading Time for the FCC to Review Children’s Television Educational Programming Obligations of Broadcasters?  Commissioner O’Rielly Thinks So

The FCC this week published a Small Business Compliance Guide for companies looking to take advantage of the FCC’s elimination of the main studio rules and the studio staffing requirements associated with those rules (see our articles here and here summarizing the rule changes). The Compliance Guide points out that stations looking to eliminate their main studios still must maintain a local toll-free telephone number where residents of the community served by the station can call to ask questions or provide information to the licensee. The Guide also references the requirement that access to the public file must be maintained. While, by March 1, all broadcast stations (unless they have obtained a waiver) will have their public files online (see our article here), it is possible that some stations may have a remnant of their file still in paper even after the conversion date. “Old political documents” (documents dealing with advertising sales to candidates, other candidate “uses,” and issue advertising) that were created before the date that a station activates its online file for public viewing need not be uploaded but can be kept in a paper file for the relevant holding period (generally two years). If the station decides not to upload those old political documents, or closes its main studio before they have gone live with their online public file, they will need to maintain a paper file in their community of license. The Guide also mentions how Class A TV stations, which are required to show that they originate programming from their local service area, will be treated since they will no longer have a legally mandated main studio. But are there questions that the Guide does not address?

We think that there are, and that broadcasters who are considering doing away with their main studio need to consider numerous other matters. First, and most importantly, the obligation for a station to serve its local community with public interest programming remains on the books. So stations need to be sure that they are staying in touch with the local issues facing their communities, and they need to address those issues in their local programming. Addressing these issues needs to be documented in Quarterly Issues Programs lists which are the only legally-mandated documents that demonstrate how a station has served its community. There are other issues to consider as well.
Continue Reading What Issues Should Broadcasters be Considering When Taking Advantage of New Rules Abolishing Main Studio and Staffing Requirements?

Yesterday, the President reportedly used the word “shithole” to describe certain countries whose immigrants were seemingly less favored than others. This predictably caused outrage in many quarters – and left the electronic media, especially broadcast TV in a quandary. Do they broadcast the purportedly used term, or do they use some euphemism so that “shit,”…

The FCC, apparently not in a holiday mood, yesterday released a Notice of Apparent Liability proposing a $13,376,200 fine against Sinclair Broadcast group for alleged violations of the sponsorship identification requirements of Section 317 of the Communications Act and Section 73.1212 of the FCC rules. The FCC alleges that program segments contained in news broadcasts of certain Sinclair stations and certain program-length reports featured stories about the Huntsman Cancer Institute which were not tagged as being sponsored – even though they were broadcast as part of a contract that required that Sinclair air advertising for the Institute and develop programming about the Institute’s activities.

While the amount of the fine is large given the thousands of alleged broadcasts missing the sponsorship tags, the Commission’s basis for the fines are not new. The FCC has previously fined stations for news segments that were sold as part of a commercial package and aired without sponsorship identification tags (see our article here.)  Accepting any consideration, even video footage, from a commercial entity, can be seen by the FCC as consideration requiring sponsorship identification. See, for instance, our article here about one such case. The stand-alone programs that Sinclair argued were identified as having been sponsored were found wanting by the FCC as, while the fact that the programs were sponsored was made clear, the actual sponsor’s name was not explicitly stated in the announcement. The Commission rejected claims that the visual depiction of the Institute’s logo that was shown visually just before the sponsorship announcement, and a welcome from the announcer thanking the audience for joining in the broadcast “from the Huntsman Cancer Institute,” were sufficient to notify the audience as to the sponsor of the broadcast. As in cases we wrote about here and here, the FCC takes a hard line on these cases, requiring that the name of the sponsor, and the fact that they sponsored the programming be presented clearly so that any viewer will know who is sponsoring a broadcast program.
Continue Reading Proposed $13,376,200 Fine Illustrates FCC Concern over Sponsorship Identification Issues

A Notice of Apparent Liability released yesterday shows that the FCC is still enforcing its EEO rules even though those rules have been somewhat relaxed to reflect modern recruiting practices. As we wrote here, the FCC now allows a station to recruit to fill employment vacancies solely by using online sources. But, as we warned here, that does not mean that a station can ignore its obligations to document its EEO efforts and to otherwise observe all of the obligations set out in the EEO rules. In yesterday’s action, the FCC’s Media Bureau proposes a $20,000 fine for a license operating a 5-station cluster in South Carolina that allegedly did not keep good EEO records and, when subject to a random EEO audit, was unable to identify any recruitment sources for other than word-of-mouth recruiting for 6 of 11 hires over a two-year period. For several positions, the licensee was said to not even be able to provide information about any recruitment sources that were used by the station.

The FCC requires stations to use sources other than its existing employees to recruit to fill full-time vacant positions. Using simply word-of mouth recruiting is considered to be recruiting through the “old-boys network” that the FCC’s EEO rules are designed to overcome, so this violation alone was enough for the FCC to have concerns. But, according to the FCC’s Notice, that was not the only deficiency in the licensee’s paperwork.
Continue Reading FCC Still Enforcing EEO Rules For Broadcasters – $20,000 Fine for Stations that Did Not Document EEO Outreach