In a decision issued last week, the FCC’s Enforcement Bureau once again made clear that stations will be given no slack if they don’t announce on the air all of the material terms of a contest – even the specifics of changes in prizes to be awarded over a long period of time. In this decision, the FCC imposed a $4000 fine on a radio station for a contest called “Who Said That,” where the station broadcast a clip of a celebrity saying something, and gave prizes to listeners who identified the celebrity. The fine was triggered by the last clip in the series, broadcast in 2007, that was not correctly identified for 20 months. Through the summer of 2008, the station continued to broadcast the contest rules, but apparently stopped broadcasting them except when prompted by a listener from summer 2008 through September 2009, when the prize was finally awarded, . The failure to announce the rules during this time period, and the failure to announce that prizes had changed during this time, led to the $4000 fine.

The Commission faulted the licensee for not updating the on-air announcement of the list of the prizes to be awarded. The licensee argued that there was no material violation as, when certain prizes became unavailable (e.g. tickets to concert that occurred during the period when the prize remain unawarded), the station substituted prizes of equal value. But the failure to announce the substitutions, or even that substitutions would be made, was seen by the FCC as a violation of Section 73.1216 of the rules.

Continue Reading $4000 FCC Fine for Not Updating Material Terms of Broadcast Contest in On-Air Announcements

Now that the Democratic and Republican conventions are over and the candidates begin the final sprint to the November 6 elections, the political broadcasting season goes into overdrive. Effective last Friday, lowest unit rates are in effect. In this year which will probably break all records for political spending, is your station ready to comply with all of the political rules? We thought that we’d provide a series of articles on some of the basics of the FCC political broadcasting rules, to make sure that your station is prepared to deal with the most common issues that arise in a political season.  Today, as the lowest unit charges have just kicked in, we’ll hit some of the common questions that we get about these rates.  In coming days, we’ll address other areas of the FCC’s political rules.

Essentially, lowest unit charges guarantee that, in the 45 days before a primary and the 60 days before a general election, candidates get the lowest rate  in any class of advertising time for a spot in that class that is then running on the station. Candidates get the benefit of all volume discounts without having to buy in volume – i.e. the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class.  But there are so many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.

Continue Reading Political Broadcasting Reminder Part 1 – The Basics of Lowest Unit Charges

A $4000 fine was levied by the FCC on an FM station owner who failed to file an application for license after completing construction of changes authorized by a construction permit, finally submitting the license applicaiton about 4 years after that permit had expired. When a broadcaster receives a construction permit authorizing technical changes in a station’s facilities, in most cases, it has three years to complete construction. Upon the completion of construction, the licensee must file an application for a license (on FCC Form 302 for commercial stations) certifying that the station was constructed as authorized. In this case, when the license application was finally submitted long after the permit expired, the application stated that construction had in fact been completed within the three year period set out in the construction permit.  So the applicant requested retroactive approval of that license, relying on past FCC cases where license applications filed after the end of the construction period were nevertheless granted where the applicant could show that construction had been completed during the period set out in the construction permit.

The FCC decided in this case that a waiver was not appropriate given the time that expired between the expiration of the permit and the filing of the license application. While gaps of a few days or even a few weeks between the expiration of the permit and the filing of the license application are excusable, the Commission concluded that a four year gap was just too much to excuse – not the minor error that can be forgiven without a fine. Waiting four years to file a license application was deemed to be too much to forgive – so the question was whether a fine was appropriate and, if so, how much.

Continue Reading $4000 Fine for Station That Forgets to File License Application After Completing Construction of Modified Facilities

This past weekend saw the passing of one of the great advocates for broadcasters in the last few decades – Ann Arnold, the President of the Texas Association of Broadcasters. Ann has headed the TAB for over 20 years, in the process making it one of the premier state broadcast associations. But Ann was more than just an association head – she also was a fierce defender of broadcasters and the service they provide to their listeners. Under her leadership, the TAB has fought against governmental attempts to over-regulate broadcasters, while also being very aggressive in promoting the role of broadcasters in getting important information out to their communities. Ann had been a nationwide leader in efforts to improve the EAS system, recognizing that broadcasters needed a working system to alert their audiences to impending threats. The TAB also was a leader in promoting a journalist shield law, helping broadcasters and other news outlets to protect vital sources.

I worked with Ann for over 20 years, and consider her to be a true friend – one who will be missed both personally and professionally. She was a central presence at all TAB events, right up to the most recent TAB annual convention held in August in Austin. Ann was there from the early morning breakfasts to the late-evening banquets, always surrounded by people seeking counsel or just a hug and a smile – which Ann could always be counted on to provide. 

Continue Reading An Industry Giant Passes – Ann Arnold of the Texas Association of Broadcasters

With Hurricane Isaac soon to make landfall on the Gulf Coast, the FCC is issuing its usual reminders to broadcasters and other communications facilities in areas that are likely to be affected by the storm.  It has today issued two public notices.  The first Public Notice reminds video providers – particularly television stations, but other video providers as well – that they need to present visually emergency information that they may be conveying verbally on the air so that those that are hearing impaired have access to that information, and similarly that information that is provided visually (e.g. through a crawl), be also provided aurally, or at least alert tones must be used to put the visually-impaired on notice of the fact that emergency information is running on the station.  A second public notice tells communications users that they can use the FCC’s Disaster Information Reporting System ("DIRS") to notify the FCC about service outages that may be caused by the storm

The information about making emergency information accessible is one that is commonly issued by the FCC (see our stories here and here about past warnings).  The FCC reminds  video providers that emergency information must be made available to those with hearing or visual impairments.  For those who are hearing impaired, information must either be provided by closed caption, or by some other means that does not block the closed caption information.  Even where a station is exempt from captioning a story – as many are in the case of breaking news – a visual element must still be provided for all audio information given on the air about "critical details regarding the emergency and how to respond to the emergency."  So stations should do open captions or have their on-air announcers use whiteboards or other means to visually convey the emergency information that they are providing in their commentary.  In the past, big fines have followed from stations that have not provided such information visually (see our post here), and the FCC has made the complaint process easier in recent years, as highlighted by today’s Public Notice.

Continue Reading FCC Issues Reminders to Broadcasters in the Path of Hurricane Issac – Provide Visuals Of Emergency Information and Notify the FCC of Service Outages

I was fortunate enough to spend some time earlier this month in London, at the Olympics. While there, I noticed just how closely the Olympic venues were guarding against any advertising from any non-official Olympic sponsors. This article from the AP notes how even the restroom fixtures had tape covering all brand names to prevent the manufacturers from getting any Olympic tie-in. I witnessed the tape and had puzzled over it many times when in London. At Wimbledon, too, where the tennis finals were held, the drink Pimms Cup, a fixture at events there, was not available as Pimms had not shelled out to be an Olympic sponsor. Again, I can attest that we spectators had to instead drink “No 1 Fruit Cup” which, I am told, was the same beverage. The AP article talks about many other similar enforcement actions taken by Olympic committees, zealously guarding Olympic trademarks. These actions all contain a warning for broadcasters – be very careful using any Olympic trademarks, symbols or other branded content in advertising and marketing campaigns, or those of other big events where trademarks (or service marks, as trademarks are known where they apply to services as opposed to goods) limit the use of the name of the big event.

We’ve written before (here and here) how Olympic sponsors pay big bucks for the rights to sponsor the Olympics, and to get exclusivity to associate their brands with the games. Thus, the sponsors guard their territory carefully, as do the Olympic organizations whose ability to stage the games is dependent on such sponsorship. Thus, when a broadcaster is approached by a local car dealer, who wants to promote an “Olympics of Savings”, or a local gym that wants to show in its commercial its exercise facilities with the Olympic rings hanging over a bank of treadmills, don’t do it, as there could be consequences far beyond the advertising revenues that you receive. And don’t plan your own WXXX Hometown Olympic festival, as that also could bring issues from the Olympic “police.”  (see this video on one local festival that confronted this issue from Comedy Central’s the Daily Show, not the first time that Comedy Central has explained trademark law -see our reference to a Colbert Report story dealing with the same question at the Winter Olympics).  And the Olympics is not the only event over which you should have this concern.

Continue Reading The Olympic Trademark Reminder – Be Careful Using The Names of Big Events Without Permission

Radio stations are once again hearing about the Mission Abstract Data patents, as a firm representing them has been seeking a royalty for the use of the patent for certain digital music storage and retrieval systems. We’ve written about that patent before. When we last wrote on the subject, the patent was subject to review by the Patent Office, which had raised issues appearing to question the underlying validity of that patent. Since then, the Patent Office reversed itself, finding that the patent (as clarified and narrowed by the holder) was in fact valid. But that determination was itself challenged by certain companies that have interests in digital music storage systems for radio stations and, in an order released last week, the Patent Office has once again suggested that there may be issues with the patent that could undermine its validity.

While this development appears promising for broadcasters concerned about the patent, broadcasters need to take this news with a grain of salt.  The Patent Office letter is at best preliminary, and the patent owner can file comments addressing the concerns raised by the Patent Office in the next 60 days, and then the challengers to the patent can reply 60 days after that. As we have seen in the past, a preliminary indication from the Patent Office that the patent may not be valid does not always withstand scrutiny when the final evaluation is completed, after presentations from both sides are received.  So what is a broadcaster to do? 

 

Continue Reading The Latest on Radio’s Digital Music Storage Patent Issue

Radio broadcasters have been receiving invoices from the Radio Music License Committee (“RMLC”), and many are asking whether the invoice is “real.”  Some stations seem concerned that they are being asked to pay some fee that they really don’t owe. The truth is that this is one bill that most commercial stations in fact do owe, and it is a bill that they should actually be happy to pay. RMLC is the committee that represented radio broadcasters in the recent negotiations with ASCAP and BMI, leading to new agreements covering the royalties to be paid to these organizations through 2016. We wrote about the ASCAP agreement, here. The BMI agreement was announced recently, and we’ll try to get a summary of that agreement up on the blog sometime soon. These settlement agreements significantly reduced the amount of royalties that the radio industry as a whole pays to ASCAP and BMI for the public performance of musical compositions on over-the-air radio (and in connection with their digital uses of music as well).   As part of these settlement agreements, the Court overseeing the antitrust consent decrees with ASCAP and BMI, which had to approve the settlements, approved the fees to RMLC as well. 

Under the terms of the Court approval, all stations that either elected to be represented by RMLC in the negotiations (see our article on that election here), or those who elect to be covered by the settlement by signing an agreement with ASCAP and BMI under the terms that RMLC negotiated, are required to pay the fee to RMLC.  The fee funds RMLC operations in the future, and pays for the cost of the litigation and negotiations that led to the settlements.

Continue Reading What is the RMLC, And Why Should a Radio Station Pay Their Bill?

Two big fines for the broadcast of telephone conversations without first getting consent of the person at the other end of the phone were released by the FCC today, and each raises a number of interesting issues. Section 73.1206 of the FCC’s rules prohibits the broadcast, or recording for purposes of broadcast, of telephone calls without first getting the consent of the person on the other end of the phone. In the first case released this week, a broadcaster was fined $25,000 for the broadcast of two phone calls on two commonly-owned stations. In the second case, the same broadcaster was fined $16,000 for a violation of the rule at a different station. These cases are very interesting in that they address and reject many defenses to the fines that were raised by the broadcaster.

The $25,000 fine came in the follow up to a Notice of Apparent Liability which we wrote about here. In this case, a station was accused of airing two calls in a program called “You Fell For It.” A complaint alleged that the station called individuals and put them on the air without notice. The licensee first attempted to defend against the claim on the grounds that the person who complained was not one of the people who was called and put on the air without consent. The FCC found that this was not necessary – any listener to the station could complain about a violation of the rules. The FCC found that this rule is not one where the only complaint can come from the individual harmed by being put on the air – though the FCC does not present any policy basis of why the rule should be enforced if the individuals who are apparently being protected (individuals who want to preserve their privacy by not going on the air) do not complain about the station’s conduct.

Continue Reading FCC Fines of $25,000 and $16,000 for Airing Phone Calls Without Prior Consent

Having broadcast all of the material rules of a station’s contest was not enough to avoid a $10,000 fine for having misleading rules – when there were errors in the contest deadlines posted on a station’s website and in emails sent to contest participants. In an FCC Notice of Apparent Liability proposing a fine for a North Carolina FM station, the Commission also upped the fine from the usual $4000 base fine for a contest violation to $10,000, because the corporate parent of the licensee had been hit with two other fines for contest violations (one in 2009 and one almost two decades ago, in 1994) and as the company had very significant revenues in the past year.

The contest was called “Carolina Cuties”, where contestants posted pictures of their babies on the station’s website, the winning picture to be selected by a vote of station listeners.   The station’s on-air announcements properly stated that the voting could continue through September 5 of last year, with the winner announced on September 6. But, on the website, during a week at the end of August, it was stated that the winner would be selected on September 4.  This was later updated to say that the voting deadline was September 4, but correctly stating that the prize would be awarded on the 6th.   An email to contestants also used the September 4 voting deadline date. Votes were in fact taken through September 5, as announced on the air. Nevertheless, as the website and emails stated that the voting deadline was September 4, the Commission determined that the station contest was not conducted “substantially as announced or advertised,” and proposed to levy the fine.

Continue Reading $10,000 FCC Fine for Failure to Follow Contest Rules – On-Air Rules Were Right, But Online Rules Were Wrong