Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory developments of significance to broadcasters from this past week, with links to where you can go to find more information as to how these actions may affect your operations.
Last week, the FCC’s Enforcement Bureau issued a Notice of Apparent Liability proposing an $8000 fine on a Los Angeles radio broadcaster that did not award a contest prize until over a year after the contest rules called for the prize to be delivered. The contest rules called for the prize to be awarded within 30 days of a winner sending all required paperwork to the station. As payments were made over a year after the end of the 30-day period provided by the contest rules, the Bureau concluded that the station had violated Section 73.1216 of the FCC rules which requires, among other contest rules, that a contest be conducted “fairly and substantially as represented to the public.” The Bureau’s Notice cites to FCC precedent indicating that “timely fulfillment of the prize” is a material term in the contest rules which, when violated, represents a violation of the FCC rule.
The prize money that was awarded late was only $396, so some might think that a proposed fine of $8000 is excessive, though the Bureau indicates in a footnote that there were 98 prize winners in the same contest that did not timely receive their prizes. The Bureau itself noted that the “base forfeiture” for a violation of the contest rules set out in the FCC’s schedule of fines is $4000. But the proposed fine was adjusted upward in this case because the FCC perceived that, for a large company such as the licensee of this station, a $4000 fine might simply be seen as a cost of doing business, and not act as a sufficient deterrent against future bad conduct. The FCC even noted that it had the power to fine the station for each day that the contest award was not made, which could have resulted in a fine of hundreds of thousands of dollars.Continue Reading FCC Proposes $8000 Fine for Failure to Award $396 Prize Within Time Period Set Out in the Contest Rules
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can find more information as to how these actions may affect your operations.
Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.
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Earlier this week, our friends at the broadcast and digital media consulting and research firm Jacobs Media posted an article on their blog called “What Could Possibly Go Wrong,” dealing with the financial and reputational issues that can arise if a contest is not fully thought out. That article reminded me of all of the legal issues that we have written about over the years that can arise if all of the issues with a broadcast contest are not carefully considered. Those potential issues range from the an FCC fine if the contest is not conducted as advertised, to the threat of civil liability if the contest results in an injury to a contestant or observer. I thought that I would highlight some of the articles that we have written in the past to remind broadcasters of those potential liabilities.
On the FCC side, the FCC has always been a stickler on the rules, requiring that broadcasters, when conducting their own on-air contests, announce the rules of those contests and to follow those rules as announced. While that burden has become somewhat lighter in the last year as the FCC has allowed stations to publicize the material rules of a contest on a station’s website rather than having to announce them on the air (as long as the on-line location of those rules is itself publicized sufficiently on air, see our post here), that rule change has not affected the underlying obligation of a broadcaster to conduct the contest as announced, in accordance with the contest’s announced rules.
Continue Reading What Could Possibly Go Wrong With a Broadcast Contest? – From the Legal Side
Today, the FCC published notice in the Federal Register of the adoption of the new simplified rules for publicizing the material rules for contests conducted by broadcasters. This publication was for purposes of review by the Office of Management and Budget under the Paperwork Reduction Act, a review necessary before any new rules requiring…
The FCC on Friday proposed to amend its rules governing contests conducted by broadcast stations by allowing the required disclosure of the material terms of the contest on the Internet, as an option for broadcasters in lieu of the current requirement that these disclosures be made by broadcasting them on-the-air a reasonable number of times. But the proposed rule change is not as simple as one would think, with the FCC asking about whether a number of specific obligations should be attached to any online disclosures, even potentially adding the requirement that the full URL for the online disclosure be made every time a contest is mentioned on the air, not simply a reasonable number of times as required under the current rules. So just what is the FCC proposing, and what is the big issue here?
The rule governing the conduct of broadcaster’s contests, Section 73.1216, covers contests conducted by broadcasters over-the-air. It does not cover contests by broadcasters that are exclusively conducted online (though, as we wrote here, if the contest is announced on the air, even if primarily conducted online, all the required on-air disclosures apply). It does not cover contests conducted by third-parties that are broadcast on the air (so contests conducted by an advertiser are not covered by this rule). The current rule, in addition to requiring that the contest be conducted fairly and in accordance with the rules adopted for the contest, requires that the “material rules” be broadcast on the air on a regular basis so that listeners know what they might win, how to play the contest, and how the winner is selected. It is this requirement, that the material rules be broadcast on the station, that has led to problems in the past, and thus prompted the proposed changes advanced on Friday.
Continue Reading FCC Proposes To Amend Rules Governing Broadcast Contests – Suggests Allowing Disclosure of Material Terms of the Contest on the Internet
The FCC has upheld a fine issued to a radio station licensee for what it determined was a failure to disclose all the rules of a broadcast contest. The giveaway was of "the Ultimate Garage" and the FCC determined, in response to a complaint, that the station had failed to disclose all of the material rules of the contest on the air. In looking at the many issues cited by the Commission in support of the fine, some are ones that are similar to those in other cases that we’ve written about before, but some are ones that have not been disclosed in other recent FCC fines – including the requirement that stations broadcast the all of the material rules of the contest not just periodically throughout the course of the contest enough so that a reasonable listener will hear the rules, but also the material rules must be announced the first time that the contest is announced to the public.
The Commission found that the licensee here had not disclosed, in either the first announcement about the contest or in enough of the other broadcast announcements that the contest was a "winner take all" contest – where the Ultimate Garage would be awarded to only a single winner. The broadcaster had promoted the contest in both live-read announcements and in a variety of recorded announcements. While certain of the recorded announcements made clear that there was but one garage to be given away, many of the other recorded announcements and the live read announcements tended to refer listeners to the full contest rules on the website, where the rules mistakenly talked about the possibility multiple winners. But that was not the only issue that the FCC saw in the station’s disclosures.Continue Reading Another $4000 FCC Fine for Radio Station that Fails to Disclose All Material Rules of a Broadcast Contest the First Time the Contest was Announced
The FCC has fined a Boston radio station $4000 for airing misleading announcements on the radio station as to the nature of the prize to be awarded in a station contest. In addition to an interesting set of facts in this case, the FCC’s decision also reviews several other recent decisions in explaining why it came to the decision it did as to the amount of the proposed fine.
In this case, the contest was promoted on the air as an opportunity to win a choice of three cars. The "Cool, Hot or Green" contest announcements never revealed on the air that the winner in fact did not receive the car, but instead only a two year lease on the car, and only if the winner passed a credit check. Nor did the on-air announcements mention that full contest rules were available on the station’s website. While the written rules on the website made clear that the prize was merely a lease of the car, as has been the case in many recent decisions (see our summaries here and here), the Commission faulted the licensee for not broadcasting an accurate disclosure of these rules on the air. While the licensee argued that this was but a minor ambiguity in the rules, the FCC, reviewing some recent decisions, disagreed.Continue Reading $4000 FCC Fine for Radio Station’s Misleading Contest Announcements Provides Summary of Recent Decisions on Contest Rule Violations
In two decisions released in the last two weeks, the FCC fined two radio stations $4000 each for perceived violations of its contest rules. The first decision was based on a perceived ambiguity in the contest rules that did not make clear in broadcasts and in written rules that there would be only one winner in a contest. In the second, the FCC faulted the licensee for not giving the prize away within 30 days of the contest end. Both cases demonstrate the seriousness with which the FCC seems to take contest rules, especially the need for disclosure of all material terms to listeners, both in over-the-air announcements (see our post here on the need to broadcast the material terms of a contest) and in the written rules governing the contest. Seemingly, ambiguities will be construed against the licensee and any material parts of the contest, including when the prize will be delivered must be clear the contestants.
In the first case, The Commission found that the licensee had not made clear in its on-air announcements and in its written rules that there would be only one prize awarded in the contest. When one closely reads the case, what seems to come through most clearly is that the Commission is expecting licensees to document carefully that they have clearly provided the material rules of the contest on the air, sufficiently so that a reasonable listener would be aware of those rules. In this case, the licensee was unable to document how often its announcements providing the rules were broadcast, or to conclusively say if they had ever been broadcast at all. The contest was to give away a garage full of prizes, so it would seem that the nature of the contest itself made clear that there was going to be only one winner. But the Commission concluded that there were not enough unambiguous statements that there would be but a single winner – thus prompting the fine.Continue Reading Ambiguous Contest Promotional Announcements and Slow Award of Prize Each Cost Radio Stations $4000 FCC Fine
