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FCC Forfeitures, Fines and Decrees

FCC Forfeitures, Fines and Decrees

Sep 1, 2012 1:00 AM, By Lee Petro

August in Washington usually means very little rulemaking action at the FCC. With the lawmakers gearing up for a fall busy with FM translator/LPFM matters and spectrum auctions, the enforcement arm of the FCC was in full swing, issuing forfeiture orders and reaching consent decrees on a number of different issues. The big-ticket knuckle-rapping targeted the musical instrument company Fender, relating to equipment authorization problems.

Contest Rules: The FCC takes a jaundice eye toward broadcasters running contests where they fail to properly broadcast and then follow their own contest rules. A recent decision though puts a different spin on the problem. In this case, the station in North Carolina developed rules for a baby photo contest and properly broadcasted the rules over the air to the public.

The station failed by posting the incorrect versions of the rules on its website and confusing the end date and award date in emails to the contestants. Since the incorrect dates were also made available to the public, the FCC determined the station failed to substantially follow its own rules, and issued a forfeiture.

Interestingly, the FCC increased the forfeiture by $10k because the licensee (CBS Radio) had previously violated the FCC’s contest rules, and the prior forfeiture proceedings apparently did not convey the seriousness of the problem. Given the size the licensee, the FCC thought doubling the forfeiture might catch its attention.

Broadcasting Phone Calls: The FCC also dinged a broadcaster who twice aired telephone calls without first getting the approval from the recipient of the call. The interesting facts in the case were that the actual recipient was not the person submitting the complaint, and the complainant did not provide detailed information regarding what was aired on the stations. The Commission did not place much stock in these arguments, and, since the program was simulcast on two commonly owned stations, the FCC doubled the base forfeiture to $20k, and then tacked on an additional $5k since the violator was a repeat offender.

In the second case, the recipient of the phone call from the broadcast station did provide her consent, but not until after the call was broadcast on the station. The broadcaster argued that it had not made the call, but rather a vendor had packaged the program to be aired on the station. Not surprisingly, the FCC rejected that argument. Noting that employees of stations can cause liability for the broadcaster, the FCC concluded there was no general exception for third-party vendors. Further, the FCC concluded the station could not avoid liability because it ultimately received consent from the recipient, since the station was responsible for obtaining consent prior to pushing the “On Air” button.

Broadcast Auxiliary SNAFU: Even the oft-overlooked world of Broadcast Auxiliary licenses recently fell into the Commission’s gaze. In Wyoming, a four-station radio group had been using broadcast auxiliary spectrum to link the studio with the stations’ transmitters. While the broadcaster had a license to cover one of the links, the other links were not licensed, and the station owner could not provide record of prior approval. Making matters worse, the station owner had previously been ordered to pay a $10k forfeiture for the same problem for a different group of stations. In the end, the FCC ordered the licensee to pay $68k for operating the transmitters without current license authorizations, and for operating them from unauthorized locations.

Equipment Authorization Problems: While not directly a radio-related forfeiture, an interesting enforcement proceeding was initiated against Fender Musical Instruments for failing to comply with the FCC’s equipment authorization rules. While not all the facts are available, it appears certain Fender products, including amplifiers, tuners and wireless microphones, did not comply with the Commission’s importation and marketing rules with respect to the newer digital products, and were not properly labeled. The case was resolved by a Consent Decree, whereby Fender agreed to make a “voluntary” contribution in the amount of $265,000 to the U.S. Treasury, and agreed to adopt a Compliance Plan that involves changes to its operating procedures, the creation of a Compliance Manual for its employees, scheduling training programs for its employees, and submitting Compliance reports to the FCC.

What should be clear from these proceedings is that the enforcement staff will be diligent in enforcing the FCC’s rules, even when some of us are enjoying the summer, and that broadcasters must remain vigilant in their efforts to remain in compliance. This is especially true where a broadcaster previously has found himself in the FCC’s enforcement cross-hairs.

FCC Dateline

Sept. 1, 16: Stations in Illinois and Wisconsin continue running License Renewal Post-Filing Announcements. Stations in Iowa and Missouri continue running License Renewal Pre-Filing Announcements.

Oct. 1: Stations in Iowa and Missouri file License Renewal Application and EEO Program Report. Commence running License Renewal Post-Filing Announcements, and file their Biennial Ownership Report (FCC 323-E).

Oct. 1, 16 and Nov. 1, 16: Stations in Colorado, Minnesota, Montana, and North Dakota begin running License Renewal Pre-Filing Announcements.

Petro is of counsel at Drinker Biddle & Reath, LLP. Email: [email protected].

September 2012

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