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FCC Fines Clear Channel in L.A. Contest Rules Case

Commission staff points out ‘history of non-compliance’

If you run a station contest primarily online, does it still fall under FCC contest rules?

The question appears to have tripped up Clear Channel, which faces a $22,000 fine in a case involving a contest on several L.A. stations in 2008 — though the commission rejected an allegation that the contest was “rigged.”

Further, in issuing the notice of apparent liability, the FCC noted past penalties against Clear Channel stations and warned that the company could face higher fines if it doesn’t follow contest rules.

Stations involved here were FMs KOST, KHHT, KBIG, KYSR and KIIS, as well as AM outlet KFI. Listeners were invited to submit video commercials for Chevrolet, with the prize of a car. The FCC received a complaint that the contest had been rigged, that the prize was awarded to a friend or family member of an employee and that the winning video was submitted after the contest submission deadline.

Clear Channel told the FCC that the outcome was in accordance with the contest rules, that no videos had been submitted after the deadline and that the contest had been done entirely online, not over the air.

Two problems, though: The stations aired spots for the contest; and contest rules were not broadcast, but placed online.

“By asserting that the contest was conducted ‘on the station websites,’” the FCC wrote, “Clear Channel appears to imply that the contest was not subject to the commission rule’s requirements, or that, alternatively, its method of disclosure was otherwise mitigating or exculpating.” The commission says a licensee is liable if it promotes a contest through broadcast even though the contest is done principally through a website.

“Moreover, the commission has found that licensees cannot avail themselves of alternative non-broadcast announcements to satisfy the requirement that they accurately announce a contest’s material terms,” it wrote. In other words, you can use a website to announce your contest terms, but that doesn’t substitute for on-air announcements.

Clear Channel, it added, also failed accurately to disclose terms due to a discrepancy in the deadline dates it published.

The base forfeiture in such cases is $4,000 per violation; but the FCC staff wrote that Clear Channel’s “substantial revenues” and “its previous violations” of commission rules warrant more. It cited contest rules cases involving WRUM(FM) in Orlando, Fla., KOST(FM) in Los Angeles and several other instances. “In view of today’s action, and in light of Clear Channel’s prior history of non-compliance, we caution that the imposition of even higher forfeitures may result in the future if such misconduct persists.” It also cited the number of stations involved in this instance as another reason for a higher fine.

The FCC, however, found no evidence of rigging. “The ultimate winner was selected by audience and website viewer vote, not by the licensee’s selection, which undermines the complainant’s charges of manipulation,” it wrote.

Theresa Z. Cavanaugh, acting chief of Investigations and Hearings Division at the Enforcement Bureau, issued the notice of apparent liability. If the company wishes to appeal it has 30 days.

Clear Channel declined a request from Radio World for comment on the NAL or whether it plans to appeal it.