FCC Doesn't Back Down on $1.4 Million in Fines Against Viacom and ESPN for False EAS Tones

Scott R. Flick

Posted January 20, 2015

By Scott R. Flick

I wrote in March of last year that the FCC had proposed fines of $1,120,000 against Viacom, $530,000 against NBCUniversal, and $280,000 against ESPN for airing ads for the movie Olympus Has Fallen that promoted the movie with an EAS alert tone. Seven Viacom cable networks aired the spot a total of 108 times, seven NBCUniversal cable networks aired it a total of 38 times, and ESPN aired it a total of 13 times on three cable networks.

According to the FCC, NBC elected to pay its $530,000 fine shortly thereafter and call it a day, but Viacom and ESPN challenged their respective fines, arguing that the fines should be rescinded or reduced because:

  • as programmers, Viacom and ESPN lacked adequate notice that Section 11.45 of the FCC's Rules (the prohibition on false EAS tones) and Section 325 of the Communications Act (the prohibition on false distress signals) applied to them;

  • the prohibition on false EAS tones does not apply to intermediary program distributors, as opposed to broadcast stations and cable systems that transmit directly to the public;

  • the use of the EAS tone in the ad was not deceptive as it was clear from the context that it was not an actual EAS alert; and

  • Viacom and ESPN did not knowingly violate the prohibition on transmitting false EAS tones.
In an Order released earlier today, the FCC rejected these arguments, noting that Section 325 of the Communications Act and Section 11.45 of the FCC's Rules are not new, and that they apply to all "persons" who transmit false EAS tones, not just to broadcasters and cable/satellite system operators. The FCC found that transmission of the network content to cable and satellite systems for distribution to subscribers constituted "transmission" of false EAS tones sufficient to trigger a violation of the rule. In reaching this conclusion, the FCC noted that both Viacom and ESPN had reviewed the ad before it was aired and had the contractual right to reject an ad that didn't comply with law, but had failed to do so. The FCC also concluded that it was irrelevant whether the use of the EAS tone was deceptive, as the law prohibits any use of the tone except in an actual emergency or test of the system.

In line with many prior FCC enforcement decisions, the FCC found the violations to be "willful" on the grounds that it did not matter whether the parties transmitting the ads knew they were violating a law, only that they intended to air the ads, which neither party disputed. The FCC summed up its position by noting that it "has consistently held that ignorance or mistake of law are not exculpating or mitigating factors when assessing a forfeiture."

While Viacom and ESPN also challenged the sheer size of the fines, the FCC noted that the base fine for false EAS tone violations is $8,000, and that in assessing the appropriate fines here, it took into account "(1) the number of networks over which the transmissions occurred; (2) the number of repetitions (i.e., the number of individual transmissions); (3) the duration of the violation (i.e., the number of days over which the violation occurred); (4) the audience reach of the transmissions (e.g., nationwide, regional, or local); and (5) the extent of the public safety impact (e.g., whether an EAS activation was triggered)." Because there were "multiple violations over multiple days on multiple networks, with the number of transmissions doubled on some networks due to the separate East Coast and West Coast programming feeds," the FCC concluded the size of the fines was appropriate.

In describing more precisely its reasoning for the outsize fines, the FCC's Order stated:

As the rule clearly applies to each transmission, each separate transmission represents a separate violation and Viacom cites no authority to the contrary. Moreover, the vast audience reach of each Company's programming greatly increased the extent and gravity of the violations. Given the public safety implications raised by the transmissions, and for the reasons set forth in the [Notice of Apparent Liability], we find that the instant violations, due to their egregiousness, warrant the upwardly adjusted forfeiture amounts detailed by the Commission.
Finally, to buttress its argument for such large fines, the FCC pulled out its "ability to pay" card, noting the multi-billion dollar revenues of the companies involved and stating that "entities with substantial revenues, such as the Companies, may expect the imposition of forfeitures well above the base amounts in order to deter improper behavior."

While today's Order is not surprising in light of the FCC's increasingly tough treatment of false EAS tone violations since 2010, it is not all bad news for the media community. To the extent that one of more of the Viacom, ESPN or NBCUniversal networks that transmitted the ads is likely carried by nearly every cable system in the U.S., the FCC could have elected to commence enforcement actions and issue fines against each and every system that failed to delete the offending content before transmitting the network programming to subscribers. Pursuing such fines would be expensive for all affected cable and satellite systems, but particularly devastating for smaller cable systems.

While it is always possible that the FCC could still commence such proceedings, it is notable that the FCC specifically rejected Viacom's argument that it was unfair for the FCC to fine the networks while not fining the ad agency that created the ad or the cable and satellite systems that actually delivered the ad to subscribers. It therefore appears that, at least for now, the FCC is content to apply pressure where it thinks it will do the most good in terms of avoiding future violations. Should the FCC decide to broaden its enforcement efforts in the future however, we'll be hearing a lot more about my last post on this subject--ensuring you are contractually indemnified by advertisers for any illegal content in the ads they send you to air.

Comment Dates Set in FCC's Heavily Anticipated MVPD Definition Proceeding

Paul A. Cicelski

Posted January 15, 2015

By Paul A. Cicelski

The press has been abuzz in recent months regarding the launch of various Internet-based video services and the FCC's decision to revisit its current definition of Multichannel Video Programming Distributors (MVPDs). In December, the FCC released a Notice of Proposed Rulemaking (NPRM), seeking to "modernize" its rules to redefine what constitutes an MVPD. The FCC's proposals would significantly expand the universe of what is considered an "MVPD" to include a wide-variety of Internet-based offerings. Today, the FCC released a Public Notice providing the dates by which parties can provide their own suggestions regarding how to modify the definition of "MVPD". Comments are now due February 17, 2015, with reply comments due March 2, 2015.

The Communications Act currently defines an "MVPD" as an entity who "makes available for purchase, by subscribers or customers, multiple channels of video programming." Specific examples given of current MVPDs under the Act are "a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor who makes available for purchase, by subscribers or customers, multiple channels of video programming." The Act states, however, that the definition of MVPD is "not limited" to these examples.

Historically, MVPDs have generally been defined as entities that own the distribution system, such as cable and DBS satellite operators, but now the FCC is asking for comments on two new possible interpretations of the term "MVPD." The first would "includ[e] within its scope services that make available for purchase, by subscribers or customers, multiple linear streams of video programming, regardless of the technology used to distribute the programming." The second would hew closer to the traditional definition, and would "require an entity to control a transmission path to qualify as an MVPD". The FCC's is looking for input regarding the impact of adopting either of these proposed definitions.

What all this means is that the FCC is interested in making the definition of "MVPD" more flexible, potentially expanding it to include not just what we think of as traditional cable and satellite services, but also newer distribution technologies, including some types of Internet delivery.

Underscoring its interest in this subject, the FCC asks a wide array of questions in its NPRM regarding the impact of revising the MVPD definition. The result of this proceeding will have far-reaching impact on the video distribution ecosystem, and on almost every party involved in the delivery of at least linear video programming. Consequently, this is an NPRM that will continue to draw much attention and merits special consideration by those wondering where the world of video distribution is headed next.

2015 Off to a Fast Start for Broadcasters' Regulatory Obligations

Scott R. Flick

Posted January 5, 2015

By Scott R. Flick

In what has become an annual holiday tradition going back so far none of us can remember when it started (Pillsbury predates the FCC by 66 years), we released the 2015 Broadcasters' Calendar last week.

While starting a new year is usually jarring, particularly breaking yourself of the habit of dating everything "2014", this new year seems particularly so, as many took last Friday off, making today, January 5th, their first day back at work. For broadcasters, whose fourth quarter regulatory reports need to be in their public inspection files by January 10th, that doesn't leave much time to complete the tasks at hand.

To assist in meeting that deadline, we also released last week our fourth quarter Advisories regarding the FCC-mandated Quarterly Issues/Programs List (for radio and TV) and the Form 398 Quarterly Children's Programming Report (for TV only). Both have not-so-hidden Easter Eggs for Class A TV stations needing to meet their obligation to demonstrate continuing compliance with their Class A obligations, effectively giving you three advisories for the price of two (the price being more strain on your "now a year older" eyes)!

And all that only takes you through January 10th, so you can imagine how many more thrilling regulatory adventures are to be found in the pages of the 2015 Broadcasters' Calendar. Whether it's SoundExchange royalty filings, the upcoming Delaware and Pennsylvania TV license renewal public notices, or any of a variety of FCC EEO reports coming due this year, broadcasters can find the details in the 2015 Broadcasters' Calendar. For those clamoring for an audiobook edition, we're holding out for James Earl Jones. We'll keep you posted on that.

FCC Enforcement Monitor

Scott R. Flick

Posted December 29, 2014

By Scott R. Flick and Jessica Nyman

December 2014

Pillsbury's communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month's issue includes:

  • Sponsorship Identification Violation Yields $115,000 Civil Penalty
  • $13,000 Increase in Fine Upheld for Deliberate and Continued Operation at Unauthorized Location
  • FCC Reduces $14,000 Fine for EAS and Power Violations Due to Inability to Pay

FCC Adopts Consent Decree Requiring Licensee to Pay $115,000 Civil Penalty

Earlier this month, the FCC's Enforcement Bureau entered into a Consent Decree with a Nevada TV station terminating an investigation into violations of the FCC's sponsorship identification rule.

The FCC's sponsorship identification rule requires broadcast stations to identify the sponsor of content aired whenever any "money, service, or other valuable consideration" is paid or promised to the station for the broadcast. The FCC has explained that the rule is rooted in the idea that the broadcast audience is "entitled to know who seeks to persuade them."

In 2009, the FCC received a complaint alleging that an advertising agency in Las Vegas offered to buy air time for commercials if broadcast stations aired news-like programming about automobile liquidation sales events at dealerships. The FCC investigated the complaint and found that the licensee's TV station accepted payment to air "Special Reports" about the liquidation sales. The "Special Reports" resembled news reports, and featured a station employee playing the role of a television reporter questioning representatives of the dealership about their ongoing sales event.

The licensee acknowledged the applicability of the sponsorship identification rule to the "Special Reports," but asserted that the context made clear their nature as paid advertisements despite the absence of an explicit announcement. The FCC disagreed, contending that the licensee failed to air required sponsorship announcements for twenty-seven "Special Reports" broadcast by the station from May through August of 2009.

As part of the Consent Decree, the licensee admitted to violating the FCC's sponsorship identification rule and agreed to (i) pay a civil penalty of $115,000; (ii) develop and implement a Compliance Plan to prevent future violations; and (iii) file Compliance Reports with the FCC annually for the next three years.

FCC Finds That Corrective Actions and Staffing Problems Do Not Merit Reduction of Fine

The FCC imposed a $25,000 fine against a Colorado radio licensee for operating three studio-transmitter links ("STL") from a location not authorized by their respective FCC licenses.

Section 301 of the Communications Act prohibits the use or operation of any apparatus for the transmission of communications signals by radio, except in accordance with the Act and with a license from the FCC. In addition, Section 1.903(a) of the FCC's Rules requires that stations in the Wireless Radio Services be operated in accordance with the rules applicable to their particular service, and only with a valid FCC authorization.

In August 2012, an agent from the Enforcement Bureau's Denver Office inspected the STL facilities and found they were operating from a location approximately 0.6 miles from their authorized location. The agent concluded--and the licensee did not dispute-- that the STL facilities had been operating at the unauthorized location for five years. A July 2013 follow-up inspection found that the STL facilities continued to operate from the unauthorized location.

Continue reading "FCC Enforcement Monitor"

FCC Proposes Moving Radio, Satellite TV/Radio, and Cable TV Public Files Online

Lauren Lynch Flick

Posted December 19, 2014

By Lauren Lynch Flick

Yesterday, the FCC released a Notice of Proposed Rulemaking proposing that broadcast radio licensees, satellite TV/radio licensees, and cable system operators move the bulk of their public inspection files online. The FCC previously adopted an online public file requirement for broadcast TV, and sees this as the logical next step.

The FCC noted that adoption of the online broadcast TV public file "represent[ed] a significant achievement in the Commission's ongoing effort to modernize disclosure procedures to improve access to public file material." As such, the FCC is proposing the same general approach for transitioning broadcast radio, satellite TV/radio, and cable system operators to an online public file.

Specifically, the FCC proposes to:

  • require entities to upload only documents that are not already on file with the FCC or for which the FCC does not maintain its own database; and


  • exempt existing political file material from the online file requirement and instead require that political file documents be uploaded only on a going-forward basis.
While the FCC indicates it is not generally interested in modifying the content of public inspection files in this proceeding, it does propose some new or modified public inspection file requirements, including:

  • requiring broadcast radio, satellite TV/radio, and cable system operators to post online the location and contact information for their local public file;


  • requiring cable system operators to provide information about the geographic areas they serve; and


  • clarifying the documents required to be kept in the cable public file.
To address online file capacity and technical concerns related to the significant increase in the number of online file users that the proposed expansion will bring, the FCC seeks comment on:

  • whether it should require that only certain components of the public file be moved online;

  • any steps the FCC might take to improve the organization of the online file and facilitate the uploading and downloading of material;

  • the amount of time the FCC should provide entities to upload documents to the online file;

  • whether the FCC should adopt staggered filing dates by service (broadcast radio, satellite radio, satellite TV, and cable);

  • whether to otherwise stagger or alter existing filing deadlines; and

  • any other ways the FCC can improve performance of the online public file database.
With respect to broadcast radio, the proposed online public file rule would require stations to upload all documents required to be in the public file that are not also filed in CDBS (or LMS) or otherwise available at the FCC's website. Just as with the online broadcast TV file, the FCC proposes to exempt letters and emails from the public from being uploaded due to privacy concerns, instead requiring that those documents continue to be maintained in the "paper" local public file.

The FCC "recognize[s] that some radio stations may face financial or other obstacles that could make the transition to an online public file more difficult." In response, the FCC proposes to:

  • begin the transition to an online public file with commercial stations in the top 50 markets that have five or more full-time employees;


  • initially exempt, for two years, non-commercial educational (NCE) radio stations, as well as stations with fewer than five full-time employees from all online public file requirements; and


  • permit exempted stations to voluntarily transition to an online public file early.
The Commission also is seeking comment on:

  • whether it is appropriate to temporarily exempt other categories of radio stations from all online public file requirements, or at least from an online political file requirement;

  • how the FCC should define the category of stations eligible for a temporary exemption;

  • whether the FCC should permanently exempt certain radio stations, such as NCEs and stations with fewer than five full-time employees, from all online public file requirements; and

  • whether the FCC should exclude NCE radio station donor lists from the online public file, thereby treating them differently than NCE TV station donor lists, which must currently be uploaded to the TV online file.
The FCC proposes to treat satellite TV/radio licensees and cable system operators in essentially the same manner as broadcast radio by requiring them to upload only material that is not already on file with the Commission. Because the only document these entities file with the FCC that must be retained in the public inspection file is the EEO program annual report (which the FCC will upload to the file), almost all material required to be kept by these entities in the online file will need to be uploaded.

Comments will be due 30 days after publication of the NPRM in the Federal Register and reply comments will be due 30 days thereafter.

FCC Announces New End Date for JSA Grandfathering

Scott R. Flick

Posted December 11, 2014

By Scott R. Flick

The FCC announced in March of this year that it would begin treating TV Joint Sales Agreements between two local TV stations involving more than 15% of a station's advertising time as an attributable ownership interest. However, it also announced at that time that it would provide parties to existing JSAs two years from the effective date of the new rule to make any necessary modifications to ensure compliance with the FCC's multiple ownership rule. As I wrote in June when the new rule went into effect, that made June 19, 2016 the deadline for addressing any issues with existing JSAs.

However, the STELA Reauthorization Act of 2014 (STELAR) became law on December
4, 2014. While the primary purpose of STELAR was to extend for an additional five years the compulsory copyright license allowing satellite TV providers to import distant network TV signals to their subscribers where no local affiliate is available, as often happens in Congress, a number of unrelated provisions slipped into the bill. One of those provisions extended the JSA grandfathering period by a somewhat imprecise "six months".

Today, the FCC released a Public Notice announcing that it would deem December 19, 2016 to be the new deadline for making any necessary modifications to existing TV JSAs to ensure compliance with the FCC's multiple ownership rule. As a result, in those situations where the treatment of a JSA as an attributable ownership interest would create a violation of the FCC's local ownership limits, the affected broadcaster will need to take whatever steps are necessary to ensure that it has remedied that situation by the December 19, 2016 deadline.

FCC Enforcement Monitor

Scott R. Flick Carly A. Deckelboim

Posted November 25, 2014

By Scott R. Flick and Carly A. Deckelboim

November 2014

Pillsbury's communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month's issue includes:

  • $7,000 Fine for Late Renewal Application and Unauthorized Operation
  • Missing Wood Planks Around Tower Lead to $5,600 Fine
  • $39,000 Fine Upheld for Hearing Aid Compatibility Violations

Reduced Fine Imposed for Unauthorized Operation and Tardy Renewal Application

Earlier this month, the Audio Division of the FCC's Media Bureau (the "Bureau") issued a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture ("NAL") against a Nevada licensee for failing to timely file its license renewal application and for continuing to operate its FM station after its license had expired. The Bureau imposed a fine for the violations and considered the licensee's renewal application at the same time.

Section 301 of the Communications Act provides that "[n]o person shall use or operate any apparatus for the transmission of energy of communications or signals by radio . . . except under and in accordance with this Act and with a license in that behalf granted under the provisions of the Act." Section 73.3539(a) of the FCC's Rules requires that broadcast licensees file applications to renew their licenses "not later than the first day of the fourth full calendar month prior to the expiration date of the license sought to be renewed."

In this case, the licensee's license expired on October 1, 2013, which meant that the licensee was required to file its license renewal application by June 1, 2013. However, the licensee did not file its renewal application until October 18, 2013, almost three weeks after its license expired, even though the Bureau had attempted to contact the licensee in June of 2013 about the impending expiration. In addition to its license renewal application, the licensee also requested Special Temporary Authority on October 18, 2013 to continue operating while its license renewal application was processed.

Continue reading "FCC Enforcement Monitor"

FCC Proposes to Clear Airwaves of Boring Contest Rules, But State Law Issues Remain

Lauren Lynch Flick

Posted November 21, 2014

By Lauren Lynch Flick

At its Open Meeting this morning, the FCC adopted a Notice of Proposed Rulemaking to "modernize" its station-conducted contest rule, which was originally adopted in 1976. The proposal would allow broadcasters to post the rules of a contest on any publicly accessible website. Stations would no longer have to broadcast the contest rules if they instead announce the full website address where the rules can be found each time they promote or advertise the contest on-air.

Currently, the FCC's rule requires that broadcasters sponsoring a contest must "fully and accurately disclose the material terms of the contest" and subsequently conduct the contest substantially as announced. A note to the rule explains that "[t]he material terms should be disclosed periodically by announcements broadcast on the station conducting the contest, but need not be enumerated each time an announcement promoting the contest is broadcast. Disclosure of material terms in a reasonable number of announcements is sufficient."

Of course what terms are "material" and what number of announcements is "reasonable" have been open to interpretation. A review of many past issues of Pillsbury's Enforcement Monitor reveals numerous cases where a station was accused of having failed to disclose on-air a material term of a contest, or of deviating from the announced rules in conducting a contest. Even where a station's efforts are ultimately deemed sufficient, the licensee has been put in the delicate position of defending its disclosure practices as "reasonable," which has the effect of accusing a disappointed listener or viewer of being "unreasonable" in having not understood the disclosures made.

Adopting the rule change proposed by the FCC today would simplify a broadcaster's defense of its actions because a written record of what was posted online will be available for the FCC to review. Accordingly, questions about whether the station aired the rules, or aired them enough times for the listener/viewer to understand all the material terms of the contest would be less important from an FCC standpoint. Instead, the listener/viewer will be expected to access the web version of the rules and benefit from the opportunity to review those rules at a more leisurely pace, no longer subjected to a fast-talker recitation of the rules on radio, or squinting at a mouseprint crawl at the bottom of a television screen. While the FCC's willingness to accept online disclosures is certainly welcome, the question of what disclosures must be made in the first instance remains. In fact, the FCC asks in the NPRM whether its rules should dictate a set of "material" terms to be disclosed online.

In our Advertising and Sweepstakes practice, we frequently advise sponsors of contests and sweepstakes on how to conduct legal contests, including the drafting of contest rules and the sufficiency of the sponsor's disclosure of those rules in advertisements. In addition to the FCC's rule requiring disclosure of "material" terms, the consumer protection laws of nearly every state prohibit advertising the availability of a prize in a false or misleading manner. What terms will be "material" and essential to making a disclosure not false or misleading is a very fact-specific issue, and will vary significantly depending on the exact nature of the contest involved. As a result, regardless of whether the FCC dictates a prescribed set of "material" terms to be disclosed, the terms will still have to satisfy state disclosure requirements.

The FCC (with regard to station-conducted contests) and state Attorney Generals (with regard to all contests and sweepstakes) investigate whether contests and sweepstakes have been conducted fairly and in accordance with the advertised rules. These investigations usually arise in response to a consumer complaint that the contest was not conducted in the manner the consumer expected. Many of these investigations can be avoided by: (1) having well-drafted contest rules that anticipate common issues which often arise in administering a contest or sweepstakes, and (2) assuring that statements promoting the contest are consistent with those rules.

While, as Commissioner Pai noted, the public does not generally find contest disclosure statements to be "compelling" listening or viewing, and may well change channels to avoid them, the individual states are going to continue to require adequate public disclosure of contest rules, even if that means continued on-air disclosures. If the FCC's on-air contest disclosure requirements do go away, stations will need to focus on how state law contest requirements affect them before deciding whether they can actually scale back their on-air disclosures.

In fact, while a violation of the FCC's contest disclosure requirements often results in the imposition of a $4,000 fine, an improperly conducted contest can subject the sponsor, whether it be a station or an advertiser, to far more liability under consumer protection laws and state and federal gambling laws. In addition, state laws may impose record retention obligations, require registration and bonding before a contest can commence, or impose a number of other obligations. As promotional contests and sweepstakes continue to proliferate, knowing the ground rules for conducting them is critically important. If the FCC proceeds with its elimination of mandatory on-air contest disclosures for station-conducted contests, it will make broadcasters' lives a little easier, but not by as much as some might anticipate.

FCC Enforcement Monitor

Scott R. Flick Carly A. Deckelboim

Posted October 22, 2014

By Scott R. Flick and Carly A. Deckelboim

October 2014

Pillsbury's communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month's issue includes:

  • $86,400 Fine for Unlicensed and Unauthorized BAS Operations
  • Missing "E/I" Graphic for Children's Television Programs Results in Fine
  • Multiple Rule Violations Lead to $16,000 in Fines

Increased Fine for Continuing Broadcast Auxiliary Services Operations After Being Warned of Violations

Earlier this month, the FCC issued a Notice of Apparent Liability for Forfeiture ("NAL") against a Texas licensee for operating three broadcast auxiliary services ("BAS") stations without authorizations and operating an additional six BAS stations at variance with their respective authorizations. The FCC noted that it was taking this enforcement action because it has a duty to prevent unlicensed radio operations from potentially interfering with authorized radio communications in the United States and to ensure the efficient administration and management of wireless radio frequencies.

Section 301 of the Communications Act provides that "[n]o person shall use or operate any apparatus for the transmission of energy of communications or signals by radio . . . except under and in accordance with this Act and with a license in that behalf granted under the provisions of the Act." In addition, Section 1.947(a) of the FCC's Rules specifies that major modifications to BAS licenses require prior FCC approval, and Section 1.929(d)(1) provides that changes to BAS television coordinates, frequency, bandwidth, antenna height, and emission type (the types of changes the licensee made in this case) are major modifications. The base fine for operating a station without FCC authority is $10,000 and the base fine for unauthorized emissions, using an unauthorized frequency, and construction or operation at an unauthorized location, is $4,000.

In April 2013, the licensee submitted applications for three new "as built" BAS facilities and six modified facilities. The modifications pertained to updates to the licensed locations of some of the licensee's transmit/receive sites to reflect the as-built locations, changes to authorized frequencies, and recharacterization of sites from analog to digital. The licensee disclosed the three unauthorized stations and six stations operating at variance from their authorizations in these April 2013 applications. As a result of the licensee's disclosures, the Wireless Telecommunications Bureau referred the matter to the Enforcement Bureau (the "Bureau") for investigation. In November 2013, the Bureau's Spectrum Enforcement Division instructed the licensee to submit a sworn written response to a series of questions about its apparent unauthorized operations. The licensee replied to the Bureau in January 2014 and admitted that it operated the nine BAS facilities either without authorization or at variance with their authorizations. The licensee also admitted that it learned of the violations in May 2012 while conducting an audit of its BAS facilities. Finally, the licensee noted that it could not identify the precise dates when the violations occurred but that they had likely been ongoing for years and possibly since some of the stations were acquired in 1991 and 2001.

The FCC concluded that the licensee had willfully and repeatedly violated the FCC's rules and noted that the base fine amount was $54,000, comprised of $30,000 for the three unauthorized BAS stations and $24,000 for the six BAS stations not operating as authorized. The licensee had argued that a $4,000 base fine should apply to the three unauthorized BAS stations because the FCC had previously imposed a $4,000 fine for similar violations when the licensee had color of authority to operate the BAS stations pursuant to an existing license for its full-power station. The FCC rejected this argument and noted that its most recent enforcement actions applied a $10,000 base fine for unlicensed BAS operations even where the full-power station license was valid.

The FCC concluded that the extended duration of the violations, including the continuing nature of the violations after the licensee became aware of the unlicensed and unauthorized operations, merited an upward adjustment of the proposed fine by $32,400. The FCC indicated that the licensee's voluntary disclosure of the violations before the FCC began its investigation did not absolve the licensee of liability because of the licensee's earlier awareness of the violations and the extended duration of the violations. The FCC therefore proposed a total fine of $86,400.

Reliance on Foreign-Language Programmer Did Not Affect Licensee's $3,000 Fine

The Chief of the Video Division of the FCC's Media Bureau issued an NAL against a California licensee for failing to properly identify educational children's programming through display on the television screen of the "E/I" symbol.

The Children's Television Act of 1990 introduced an obligation for television broadcast licensees to offer programming that meets the educational and informational needs of children ("Core Programming"). Section 73.671(c)(5) of the FCC's Rules expands on this obligation by requiring that broadcasters identify Core Programming by displaying the "E/I" symbol on the television screen throughout the program.

The licensee filed its license renewal application on August 1, 2014. The licensee certified in the application that it had not identified each Core program at the beginning of each program and had failed to properly display the "E/I" symbol during educational children's programming aired on a Korean-language digital multicast channel. In September 2014, the licensee amended its license renewal application to specify the time period when the "E/I" symbol was not used and two days later amended the renewal application again to state that it had encountered similar issues with displaying the "E/I" symbol on the station's Chinese-language digital multicast channel.

Continue reading "FCC Enforcement Monitor"

Breaking News: FCC Suspends Construction Deadlines and Expiration Dates for New LPTVs and Translators

Lauren Lynch Flick

Posted October 10, 2014

By Lauren Lynch Flick

Late today, the FCC released a Public Notice stating that "[e]ffective immediately, the expiration dates and construction deadlines for all outstanding unexpired construction permits for new digital low power television (LPTV) and TV translator stations are hereby suspended pending final action in the rulemaking proceeding in MB Docket No. 03-185 initiated today by the Commission."

As referenced in that statement, the FCC simultaneously released a Third Notice of Proposed Rulemaking (NPRM) seeking comment on a number of issues related to the transition of LPTV stations to digital and their fate in the post-auction spectrum repacking. Specifically, the FCC states in the NPRM that:


In this proceeding, we consider the measures discussed in the Incentive Auction Report and Order, other measures to ensure the successful completion of the LPTV and TV translator digital transition and to help preserve the important services LPTV and TV translator stations provide, and other related matters. Specifically, we tentatively conclude that we should: (1) extend the September 1, 2015 digital transition deadline for LPTV and TV translator stations; (2) adopt rules to allow channel sharing by and between LPTV and TV translator stations; and (3) create a "digital-to-digital replacement translator" service for full power stations that experience losses in their pre-auction service areas. We also seek comment on: (1) our proposed use of the incentive auction optimization model to assist LPTV and TV translator stations displaced by the auction and repacking process to identify new channels; (2) whether to permit digital LPTV stations to operate analog FM radio-type services on an ancillary or supplementary basis; and (3) whether to eliminate the requirement in section 15.117(b) of our rules that TV receivers include analog tuners. We also invite input on any other measures we should consider to further mitigate the impact of the auction and repacking process on LPTV and TV translator stations.

While primarily focused on the future of the LPTV and TV translator services, the NPRM definitely includes some issues of interest to full-power TV stations as well, including the idea that repacking full-power stations may necessitate the construction of digital-to-digital translators to address situations where such stations "experience losses in their pre-auction service areas". The extent to which the FCC may create such losses is of course one of the issues currently on appeal before the courts, but such losses might also result from stations voluntarily moving from UHF to VHF channels in the auction, or moving from a High VHF to a Low VHF channel. The FCC proposes to permit such translators only where a loss of service has occurred, and to limit such translators to replicating, rather than extending, a station's prior coverage area.

Another interesting issue for which the FCC is seeking input in the NPRM is whether to allow LPTV and TV translator stations to channel-share with full-power and Class A TV stations. That issue, as well as the proposal to allow Channel 6 LPTV stations to provide an analog FM audio service as an ancillary service, will make this a particularly interesting proceeding likely to attract lots of comments.

The comment dates have not yet been set, but Comments will be due 30 days after the NPRM is published in the Federal Register, with Reply Comments due 15 days after that. Those operating LPTV and TV translator stations will no doubt be happy to see that the FCC is taking steps to "mitigate the potential impact of the incentive auction and the repacking process on LPTV and TV translator stations," but the many issues covered by the NPRM make clear that, for many of these stations, it will definitely be an uphill climb.

FCC Announces Grant of 700 Delayed Broadcast License Renewals

Scott R. Flick

Posted October 9, 2014

By Scott R. Flick

In a post today on the FCC's Blog, Diane Cornell, Special Counsel to Chairman Wheeler, described the FCC's efforts to reduce backlogs of applications, complaints, and other proceedings pending at the FCC. The post announces that the Consumer and Governmental Affairs Bureau has closed 760 docketed proceedings, and is on track to close another 750 by the end of the year. The post also indicates that the FCC's Wireless Bureau resolved 2046 applications older than six months, reducing the backlog of applications by 26%.

Of particular interest to broadcasters, however, is the news that the "Enforcement Bureau has largely completed its review of pending complaints, clearing the way for the Media Bureau to grant almost 700 license renewals this week." Many of these pending complaints were presumably based on indecency claims, which have in recent years created such a backlog of license renewal applications (particularly for TV stations) that it has not been unusual for a station to have multiple license renewal applications pending at the FCC, even though such applications are only filed every eight years.

For those unable to buy or sell a broadcast station, or to refinance its debt, because that station's license renewal application was hung up at the FCC, this will be welcome news. Just two years ago, the number of indecency complaints pending at the FCC exceeded 1,500,000, dropping to around 500,000 in April of 2013, when the FCC proposed to "focus its indecency enforcement resources on egregious cases and to reduce the backlog of pending broadcast indecency complaints."

While indecency and other complaints will certainly continue to arrive at the FCC in large numbers given the ease of filing them in the Internet age, today's news brings hope that most of them will be addressed quickly, and that long-pending license renewal applications will become a rarity at the FCC. That would be welcome news for broadcasters, who frequently found that the application delays caused by such complaints were far worse than any fine the FCC might levy. Such delays were particularly galling in the many cases where the focus of the complaint was content wildly outside the FCC's definition of indecency ("language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities").

For a number of years, complaints that merely used the word "indecent" were put in the "indecency complaint" stack, resulting in multi-year holds on that station's FCC applications. I once worked on a case where a politician who had been criticized in a TV's newscast for his performance in office filed an FCC complaint stating that the station's comments about him were "indecent". You guessed it; this exercise of a station's First Amendment right to criticize a public official resulted in a hold being placed on the station's FCC applications for years while the complaint sat at the FCC.

The FCC's efforts to eliminate these delays, and the inordinate leverage such delays gave to even the most frivolous complaints, are an excellent example of the FCC staff working to accomplish the Commission's public interest mandate. While broadcasters may feel they have not have had many reasons to cheer the FCC in recent years, today's announcement certainly merits some applause.

Hotels Jamming Wi-Fi Signals?

Scott R. Flick

Posted October 3, 2014

By Scott R. Flick

In the U.S., jamming communications signals is illegal. Over the years, I've written a number of posts about the FCC's persistent efforts to prevent jamming. Among these were fines and other actions taken against an Internet marketer of cell phone jamming devices; a variety of individuals and companies selling cell phone jamming devices through Craigslist; an employer attempting to block cell phone calls by its employees at work; a truck driver jamming GPS frequencies to prevent his employer from tracking his whereabouts; and an individual jamming the frequencies used by a shopping mall for its "mall cop" communications systems.

In each of these cases, the FCC went after either the party selling the jamming device, or the user of that device. Normally, jammers work by overloading the frequency with a more powerful interfering signal, confusing the signal receiver or obliterating the lower-powered "authorized" signal entirely. Historically, jammers have often been individuals with a grudge or an employer/employee trying to get the electronic upper hand on the other.

It was therefore a new twist when the FCC announced today that it had entered into a Consent Decree with one of the largest hotel operators in the U.S. "for $600,000 to settle the [FCC's] investigation of allegations that [the operator] interfered with and disabled Wi-Fi networks established by consumers in the conference facilities at the Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee ... in violation of Section 333 of the Communications Act of 1934, as amended...."

The FCC's Order describes the basis for its investigation and the Consent Decree as follows:

Wi-Fi is an essential on-ramp to the Internet. Wi-Fi networks have proliferated in places accessible to the public, such as restaurants, coffee shops, malls, train stations, hotels, airports, convention centers, and parks. Consumers also can establish their own Wi-Fi networks by using FCC-authorized mobile hotspots to connect Wi-Fi enabled devices to the Internet using their cellular data plans. The growing use of technologies that unlawfully block consumers from creating their own Wi-Fi networks via their personal hotspot devices unjustifiably prevents consumers from enjoying services they have paid for and stymies the convenience and innovation associated with Wi-Fi Internet access.

In March 2013, the Commission received a complaint from an individual who had attended a function at the Gaylord Opryland. The complainant alleged that the Gaylord Opryland was "jamming mobile hotspots so that you can't use them in the convention space." Marriott has admitted that one or more of its employees used containment features of a Wi-Fi monitoring system at the Gaylord Opryland to prevent consumers from connecting to the Internet via their own personal Wi-Fi networks. The Bureau investigated this matter to assess Marriott's compliance with Section 333 of the Act and has entered into the attached Consent Decree. To resolve the Bureau's investigation, [the operator] is required, among other things, (i) to pay a $600,000 civil penalty to the United States Treasury, (ii) to develop and implement a compliance plan, and (iii) to submit periodic compliance and usage reports, including information documenting to the Bureau any use of containment functionalities of Wi-Fi monitoring systems, at any U.S. property that [it] manages or owns.

Today's Order makes clear that the FCC's concerns about "signal jamming" are not limited to traditional brute force radio signal interference. In this case, the jamming was done by "the sending of de-authentication packets to Wi-Fi Internet access points." Also of interest is that the FCC did not assert, as it often has in past jamming cases, that it was concerned about the impact of jamming communications on those in nearby public spaces. It appears that the "de-authentication" was limited to areas inside the hotel/convention center, and the FCC made clear that even this limited jamming was "unacceptable".

This is not the first time the FCC has exercised its authority in ways affecting the hospitality industry (for example, fining hotels because their in-house cable systems don't comply with FCC signal leakage limits designed to protect aviation communications). However, the FCC's willingness to step in and regulate access to Wi-Fi on hotel property indicates that the FCC might be a growing influence on hotels' business operations, particularly as hotels seek to make an increasing portion of their revenues from "guest fees" of various types, including for communications services. The Order indicates that the hotel here was charging anywhere from $250 to $1,000 per wireless access point for convention exhibitors and customers, providing a powerful incentive for the hotel to prevent parties from being able to sidestep those charges by setting up personal Wi-Fi hotspots.

Figuring out ways to drive up demand for these hotel services is Business 101. Doing it in a way that doesn't draw the FCC's ire is an upper level class.

FCC Enforcement Monitor

Scott R. Flick Carly A. Deckelboim

Posted September 30, 2014

By Scott R. Flick and Carly A. Deckelboim

September 2014

Pillsbury's communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month's issue includes:

  • Unenclosed and Unpainted Tower Leads to $30,000 in Fines
  • $20,000 Fine for Missing Issues/Programs Lists at Two Stations
  • Increased Fine for Intentional Interference and Unlicensed Transmitter Use

Multiple Tower Violations Result in Increased Fine

Earlier this month, a Regional Director of the FCC's Enforcement Bureau (the "Bureau") issued a Forfeiture Order against the licensee of a New Jersey AM radio station for failing to properly paint its tower and enclose the tower within an effective locked fence or other enclosure.

Section 303(q) of the Communications Act requires that tower owners maintain painting and lighting of their towers as specified by the FCC. Section 17.50(a) of the Commission's Rules says that towers must be cleaned or repainted as often as necessary to maintain good visibility. Section 73.49 of the FCC's Rules requires "antenna towers having radio frequency potential at the base [to] be enclosed with effective locked fences or other enclosures." The base fine for failing to comply with the lighting and marking requirements is $10,000, and the base fine for failing to maintain an effective AM tower fence is $7,000.

In March of 2010, agents from the Bureau's Philadelphia Office inspected the licensee's tower in New Jersey. The terms of the Antenna Structure Registration required that this particular tower be painted and lit. During their inspection, the agents noticed that the paint on the tower was faded and chipped, resulting in significantly reduced visibility. During their inspection, the agents also found that an unlocked gate allowed unrestricted access to the tower, which had radio frequency potential at its base. The agents contacted the owner of the tower and locked the gate before leaving the site.

In April of 2010, the Philadelphia Office issued a Notice of Violation ("NOV") to the licensee for violating Sections 17.50(a) and 73.49 of the FCC's Rules. The next month, in its response to the NOV, the licensee asserted that it inspects the tower several times each year and had been planning for some time to repair the faded and chipped paint and promised to bring the tower into compliance by August 15, 2010 by repainting the structure or installing white strobe lighting. The licensee also indicated that it had never observed the gate surrounding the tower be unlocked during its own site visits and noted that several tenants, each of whom leased space on the tower, also had keys for the site.

In November of 2010, agents inspected the tower again to ensure that the violations had been corrected. The agents discovered that the licensee had neither repainted the tower nor installed strobe lights and that now a different gate to the tower was unlocked. The agents immediately informed the licensee's President and General Manager about the open gate, which they were unable to lock before leaving the site. The following day, the agents returned to the tower and noted that the gate was still unlocked. The agents again contacted the President, who promised that a new lock would be installed later that day, which did occur. At the beginning of December 2010, agents visited the tower with the President and the station's Chief Engineer. The tower still had not been repainted, nor had strobe lights been installed. On January 7, 2011, the Chief Engineer reported to the FCC that white strobe lighting had been installed.

The Philadelphia Office issued a Notice of Apparent Liability for Forfeiture ("NAL") on October 31, 2011 for failure to repaint the tower and failure to enclose the tower with an effective locked fence or enclosure. In the NAL, the Philadelphia Office adjusted the base fines upward from the combined base fine of $17,000 because the "repeated warnings regarding the antenna structure's faded paint and the unlocked gates . . . demonstrate[ed] a deliberate disregard for the Rules." The Philadelphia Office proposed a fine of $20,000. In its response to the NAL, the licensee requested that the fine be reduced based on its immediate efforts to bring the tower into compliance with the rules and its overall history of compliance.

In response, the FCC declined to reduce the proposed fine because corrective action taken to come into compliance with the Rules is expected and does not mitigate violations. In addition, the FCC rejected the licensee's argument that it had taken "immediate action" to correct the violations because the licensee was first notified about the chipped paint in March 2010 and did not install the strobe lights until January 2011. Finally, the FCC declined to reduce the fine based on a history of compliance because the licensee had violated the FCC's Rules twice before. Therefore, the FCC affirmed the imposition of a $20,000 fine.

Fine Reduced to Base Amount for Good Faith Effort to Have Issues/Programs Lists Nearby

The Western Region of the Enforcement Bureau issued a Forfeiture Order against the licensee of two Colorado stations for failing to maintain complete public inspection files.

Continue reading "FCC Enforcement Monitor"

October 1 Must-Carry/Retrans Elections Drive the Future of Local Broadcast TV

Scott R. Flick

Posted September 18, 2014

By Scott R. Flick

Few dates on the broadcasters' calendar are easier to miss than the deadline for TV stations (and a few fortunate LPTV stations) to send their must-carry/retransmission election letters to cable and satellite providers in their markets. Because it doesn't occur every year, or even every other year, but every third year, the triennial deadline can slip up on you if you don't closely monitor our Broadcast Calendar. For those that haven't been paying attention, October 1, 2014 is the deadline for TV stations to send their carriage election letters to MVPDs. The elections made by this October 1st will govern a station's carriage rights for the three-year period from January 1, 2015 to December 31, 2017, and this will be the first set of election letters that stations must immediately upload to their online public inspection file at the FCC.

I noted in a post here three years ago that the impact of these elections is becoming more significant with each three-year cycle. In particular, that post focused on the fact that network-affiliated stations can no longer consider retrans revenue to be "found" money, but instead as revenue essential to both short-term and long-term survival. Short-term, in that stations must compete for programming and advertising against cable and satellite programmers that have long had two revenue streams--advertising and subscriber fees. Long-term, in that there was little doubt that networks were looking to charge affiliates more for network programming by taking an ever larger share of retrans revenue, and that it was only a matter of time before networks began selecting their affiliates based not upon past performance, but upon which station could bring the best financial package to the network going forward.

As we've learned over the past year in particular, that means not just negotiating the best retransmission deals possible, but sending an increasing portion of those revenues to the network. Wells Fargo analyst Marci Ryvicker, who will be one of our speakers at the 2014 Pillsbury Trends in Communications Finance event in New York next month, noted that pattern just a few weeks ago. Using CBS's recent projections on the overall revenue it expects to receive from affiliates, she was able to calculate the monthly affiliate cost for CBS programming at $1.30 per subscriber by 2020. Add to that the station's costs for negotiating retrans deals, as well as the increasing cost of producing local programming and securing attractive syndicated content, and it is clear that no network affiliate can afford to be cutting substandard retrans deals and hope to survive in the long term. MVPDs may grumble about those "greedy stations" during retrans negotiations, but generating the revenue necessary to retain the programming that attracts cable, satellite, and over-the-air viewers (not to mention advertisers) is not an optional activity for local TV stations.

The impact of this is not, however, limited to purely matters of retransmission. Yes, broadcasters can no longer afford to enter into amateur retrans deals that threaten to alienate their networks by providing below-market rates, or which sloppily authorize retransmission or streaming rights far outside the local broadcaster's market (this mistake becoming even more consequential if the FCC moves forward in eliminating the network non-duplication rule). The bigger trend is that these economic forces are driving consolidation in the TV industry.

Building large broadcast groups allows co-owned TV stations the critical mass necessary to negotiate difficult retrans deals against the much-larger cable and satellite operators, and, where necessary, to withstand the economic impact of a retrans impasse when it happens. Similarly, larger TV groups are better positioned to negotiate the best possible programming deals with their networks (keeping in mind that "best possible" isn't necessarily the same as "good").

Single stations and small station groups routinely have to punch well above their weight by employing smart executives and counsel with deep experience in retrans negotiations to survive in this increasingly harsh environment. That is what makes the FCC's prohibition earlier this year on certain joint retrans negotiations, as well as current efforts on Capitol Hill to broaden that prohibition, so perverse. By eliminating one of a small broadcaster's best options for cost-effectively negotiating viable retransmission agreements, the government is pushing those broadcasters to sell their stations to a larger broadcaster (or some would say, to the government itself). In the current environment, a station that fails to sell to a larger broadcaster possessing the skill and mass necessary to effectively negotiate retransmission agreements risks losing its network affiliation to just such a station group, precisely because that group can frequently deliver better retrans results.

So as you send out your elections this year, keep in mind that while the election process itself hasn't changed, what you will need to do afterwards has changed dramatically. More to the point, think hard about what you need to be doing with your retrans negotiations if you still want to be around in three years to send out that next batch of election letters.

FCC Moves Quickly to Reject Political Ad Sponsorship ID Complaints

Scott R. Flick

Posted September 2, 2014

By Scott R. Flick

Broadcasters let out a small sigh of relief today when the FCC made clear there is no requirement that TV stations have private investigators on staff.

With TV stations' political files now available online, three political activist organizations have been jointly filing complaints against TV stations alleging various errors and omissions in online public file paperwork relating to political ad buys by third-party advertisers. These three organizations, the Campaign Legal Center, Sunlight Foundation, and Common Cause, expanded their campaign (no pun intended) substantially in mid-July, when they filed complaints against a Washington, DC and a Portland, Oregon TV station. Rather than paperwork problems, however, these complaints claimed that the stations had failed to accurately disclose on-air the true identity of the sponsor behind certain "Super PAC" political ads. In both cases, the complainants asserted that their own research indicated the PACs were mostly or entirely funded by a single individual, and that the stations should have therefore identified that individual rather than the PAC as the sponsor of the political spot.

While there is ample precedent for requiring broadcasters to be comfortable that the sponsorship information in a political spot is accurate, the most recent complaints concerned broadcasters for two reasons. First, there apparently was no question that the PACs had indeed been the ones to write the check for the ads and were valid legal entities, so a TV station altering the sponsorship identification text to specify the station's opinion as to who the "real" sponsor is raises numerous legal issues, not the least of which is that the station could well get it wrong. For example, it would be a pretty brazen station that would change the sponsorship identification on Microsoft ads to "paid for by Bill Gates" on the theory that Bill Gates was the main "person" behind the organization that wrote the check. Of course, in this example the station would be doubly wrong, as Bill Gates ceased being the largest shareholder of Microsoft in May of this year, demonstrating the risk a station takes in attempting to be the arbiter of who is "behind" an advertiser.

This example also demonstrates the second issue that concerned broadcasters about the complaints. If, in the absence of an obvious sham advertiser, broadcasters had an obligation to ignore the "name on the check" and attempt to discern the actual source of the check writer's income, they would need a full-time staff of researchers doing nothing but verifying the structure of advertisers. In addition, the airing of political ads would be perpetually delayed while stations seek adequate certainty that they have discerned the true source of all ad funds.

The result would be a no-win situation for broadcasters, who would have to expend enormous resources trying to determine where an advertiser's money comes from, and having done that, expose themselves to both private liability (from the advertiser who wasn't credited as the sole sponsor of the spot, as well as from the individual who was) and regulatory liability (if the government disagrees with the licensee's sponsorship conclusions).

Today, the FCC wisely avoided placing broadcasters in that conundrum, ruling in a letter decision that:

We conclude that the complaints do not provide a sufficient showing that the stations had credible evidence casting into doubt that the identified sponsors of the advertisement were the true sponsors. As the Commission has stated previously, "unless furnished with credible, unrefuted evidence that a sponsor is acting at the direction of a third party, the broadcaster may rely on the plausible assurances of the person(s) paying for the time that they are the true sponsor." While the complaint against [the station] presented some evidence that station employees may have come across facts in the course of news reporting on political issues that could have raised questions in their minds concerning the relationship of NextGen Climate Action Committee and Tom Steyer, we exercise our discretion not to pursue enforcement in this instance, given the need to balance the "reasonable diligence" obligations of broadcasters in identifying the sponsor of an advertisement with the sensitive First Amendment interests present here.

While it is reassuring that the FCC moved quickly to reject the complaints, today's action leaves the political sponsorship identification waters somewhat murky. In addition to the less than comforting "we exercise our discretion not to pursue enforcement in this instance" language, the FCC proceeded to state that "[o]ur approach might have been different if the complainants had approached the stations directly to furnish them with evidence calling into question that the identified sponsors were the true sponsors." In using this language, the FCC suggests that the only problem with the complaints "might have been" that the complainants didn't present their evidence to the stations while the spots were still airing so that the stations could have assessed the evidence at the time and decided whether to modify the sponsorship identification.

While that ruling is generally consistent with past FCC rulings, in that a broadcaster must be presented with "credible, unrefuted evidence that a sponsor is acting at the direction of a third party," the FCC sidestepped the equally important issue of when a PAC's sponsorship identification may be deemed adequate, or if PAC contributors must be listed instead. As a result, broadcasters are left wondering if a sponsorship identification will be second-guessed when 80%, 90%, 95%, 99%, or some other percentage of the sponsor's income comes from one source. Similarly, what if only 50% comes from one individual, but the other 50% comes from another individual, and the two are say, brothers? Once again, broadcasters are being asked, on pain of liability, to make disclosure decisions for PACs that are more correctly the province of the Federal Election Commission.

Of course, the sponsorship identification requirement is not limited to political ads, and the flaws in the approach suggested by the complainants seem jarringly obvious when applied in the context of a business advertiser. For example, should ads for every Mom and Pop business disclose that the real sponsor is not the business, but Mom and Pop, who gave up their vacation this year in order for the business to be able to afford broadcast advertising? Similarly, if it is not the entity writing the check for advertising that is relevant, but the principal source of its income, shouldn't all ads placed by defense contractors need to disclose the U.S. government as the actual sponsor of their ads?

On the other hand, if, as the FCC has suggested in past sponsorship decisions, the real issue is the identity of the decision maker for that advertiser, how could a broadcaster ever know that information with adequate certainty to reject the assurances of the advertiser and take on the liability of unilaterally changing sponsorship identifications in ads?

To be clear, no one is suggesting that a sponsor should be able to avoid on-air attribution by creating a phony front organization whose faux nature is obvious to all, including the broadcaster. However, a Political Action Committee is an entity legally recognized under the law, which is also regulated by law. If more information about its contributors is deemed a public good, Congress and the Federal Election Commission have the authority and the responsibility to take action to accomplish that result. In the absence of such action, the task should not fall to broadcasters by default.