February 2012 Archives

FCC Enforcement Monitor

Scott R. Flick Christine A. Reilly

Posted February 29, 2012

By Scott R. Flick and Christine A. Reilly

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:

  • Inadequate Sponsorship ID Ends with $44,000 Fine
  • Unattended Main Studio Fine Warrants Upward Adjustment
  • $16,000 Consent Decree Seems Like a Deal

Licensee Fined $44,000 for Failure to Properly Disclose Sponsorship ID
For years, the FCC has been tough on licensees that are paid to air content but do not acknowledge such sponsorship, and an Illinois licensee was painfully reminded that failing to identify sponsors of broadcast content has a high cost. In a recent Notice of Apparent Liability ("NAL"), the FCC fined the licensee $44,000 for violating its rule requiring licensees to provide sponsorship information when they broadcast content in return for money or other "valuable consideration."

Section 317 of the Communications Act and Section 73.1212 of the FCC's Rules require all broadcast stations to disclose at the time the content is aired whether any broadcast content is made in exchange for valuable consideration or the promise of valuable consideration. Specifically, the disclosure must include (1) an announcement that part or all of the content has been sponsored or paid for, and (2) information regarding the person or organization that sponsored or paid for the content.

In 2009, the FCC received a complaint alleging a program was aired without adequate disclosures. Specifically, the complaint alleged that the program did not disclose that it was an advertisement rather than a news story. Two years after the complaint, the FCC issued a Letter of Inquiry ("LOI") to the licensee. In its response to the LOI, the licensee maintained that its programming satisfied the FCC's requirements and explained that all of the airings of the content at issue contained sponsorship identification information, with the exception of eleven 90-second spots. In these eleven spots, the name of the sponsoring organization was identified, but the segment did not explicitly state that the content was paid for by that organization.

Though the licensee defended its program content and the disclosure of the sponsor's name as sufficient to meet the FCC's requirements, the FCC was clearly not persuaded. The FCC expressed particular concern over preventing viewer deception, especially when the content of the programming is not readily distinguishable from other non-sponsored news programming, as was the case here.

The base forfeiture for sponsorship identification violations is $4,000. The FCC fined the licensee $44,000, which represents $4,000 for each of the eleven segments that aired without adequate disclosure of sponsorship information.

Absence of Main Studio Staffing Lands AM Broadcaster a $10,000 Penalty
In another recently released NAL, the FCC reminds broadcasters that a station's main studio must be attended by at least one of its two mandatory full-time employees during regular business hours as required by Section 73.1125 of the FCC's Rules. Section 73.1125 states that broadcast stations must maintain a main studio within or near their community of license. The FCC's policies require that the main studio must maintain at least two full-time employees (one management level and the other staff level). The FCC has repeatedly indicated in other NALs that the management level employee, although not "chained to their desk", must report to the main studio on a daily basis. The FCC defines normal business hours as any eight hour period between 8am and 6pm. The base forfeiture for violations of Section 73.1125 is $7,000.

According to the NAL, agents from the Detroit Field Office ("DFO") attempted to inspect the main studio of an Ohio AM broadcaster at 2:20pm on March 30, 2010. Upon arrival, the agents determined that the main studio building was unattended and the doors were locked. Prior to leaving the main studio, an individual arrived at the location, explained that the agents must call another individual, later identified as the licensee's Chief Executive Officer ("CEO"), in order to gain access to the studio, and provided the CEO's contact number. The agents attempted to call the CEO without success prior to leaving the main studio.

Approximately two months later, the DFO issued an LOI. In the AM broadcaster's LOI response, the CEO indicated that the "station personnel did not have specific days and times that they work, but rather are 'scheduled as needed.'" Additionally, the LOI response indicated that the DFO agents could have entered the station on their initial visit if they had "push[ed] the entry buzzer."

In August 2010, the DFO agents made a second visit to the AM station's main studio. Again the agents found the main studio unattended and the doors locked. The agents looked for, but did not find, the "entry buzzer" described in the LOI response.

The NAL stated that the AM broadcaster's "deliberate disregard" for the FCC's rules, as evidenced by its continued noncompliance after the DFO's warning, warranted an upward adjustment of $3,000, resulting in a total fine of $10,000. The FCC also mandated that the licensee submit a statement to the FCC within 30 days certifying that its main studio has been made rule-compliant.

Continue reading "FCC Enforcement Monitor"

Scott R. Flick and Lauren Lynch Flick of Pillsbury to Speak on "Playing by the Rules: A Broadcaster's Guide to Contests and Sweepstakes," February 29, 2012

February 29, 2012

Scott R. Flick and Lauren Lynch Flick of Pillsbury will review the FCC rules governing on-air contests and sweepstakes during this Executive Briefing Webinar presented by Texas Association of Broadcasters on February 29th from 2-3:30 pm Central Time. Learn the best practices and pitfalls when it comes to airing contests on your station and why to be wary of "boiler plate" contest rules.

Click here for more information and to register for this FREE informative session.

TV Stations' Class A Status on the Chopping Block

Scott R. Flick

Posted February 28, 2012

By Scott R. Flick

This morning the FCC released copies of 16 Orders to Show Cause sent to licensees of low power TV stations that have Class A status. Class A status protects such stations from being displaced by modifications to full-power stations and, with the recent enactment of the spectrum auction legislation, qualifies them to participate in the auction (for a share of the auction revenues) while protecting them from being spectrum repacked out of existence as part of the auction preparations.

Each of the Orders is surprisingly similar, noting that the FCC sent letters to the licensee in March and August of last year asking why it had not been regularly filing its FCC Form 398 Children's Television Reports with the Commission. The Orders note that the licensees failed to respond to either of the FCC letters, and that the FCC is therefore demanding they now tell the FCC if there is any reason why it should not relieve them of their Class A status, making them regular LPTV licensees with attendant secondary status.

It is possible that these are just the beginning of a tidal wave of FCC orders aimed at thinning the ranks of Class A stations. First, given that these stations were told they had not filed all of their Children's Television Reports and they then failed to respond to the FCC, these are the "easy" cases for the FCC, since it can assert that the licensee effectively defaulted by not responding. Presumably, for each licensee that did not respond at all, there were several that did respond to explain why their Children's Television Reports might not be showing up in the FCC's database. These cases will have more individualized facts, requiring the Media Bureau to write more detailed and diverse responses. Drafting those types of responses will take FCC staff more time than this largely cookie-cutter first batch, and that is why there likely will be more Show Cause Orders being sent to Class A stations in the not too distant future.

Beyond proving once again that "you don't tug on Superman's cape, you don't spit into the wind, you don't pull the mask off that old Lone Ranger, and you don't fail to respond to an FCC letter" (Jim Croce as channeled by a communications lawyer), the Orders are a bit surprising since the FCC had previously taken the position that, like full-power TV stations, the penalty for a Class A station failing to comply with a rule is typically a fine, not the loss of Class A status. While the licensees that failed to respond to the FCC letters in March and August certainly did themselves no favors, it is likely that loss of Class A status is going to be the FCC's favored enforcement tool going forward.

Why? Well, as I explain in a post coming out later this week on the new spectrum auction law, unlike Class A stations, LPTV stations were given no protections under the auction statute, leaving them at risk of being displaced into oblivion, with no right to participate in spectrum auction proceeds and no right to reimbursement for the cost of moving to a new channel during the repacking process (assuming a channel is available).

However, because the statute gives Class A stations rights similar to full-power TV stations, every Class A station the FCC can now eliminate increases the amount of spectrum the FCC can recover for an auction, reduces the amount of spectrum the FCC must leave available for broadcasters in the repacking process, and increases the potential profitability of the auction for the government (since it can just displace LPTV stations rather than compensate them as Class A stations).

That the FCC seems to now be moving quickly to cull LPTV stations from the Class A herd just a week after Congress cleared the way for a spectrum auction is likely no coincidence. Instead, these Orders represent the first of many actions the FCC is likely to take to simplify the repacking process while reducing the costs inherent in conducting an auction for vacated broadcast spectrum. For the FCC, LPTV stations and "former" Class A stations are the low-hanging fruit in conducting a successful spectrum auction. The question for other television licensees is how much further up the tree the FCC is going to climb to make more spectrum available for an auction at minimal cost to the government.

The FCC's "Stopwatch" Proposal to Evaluate Station Program Content

Richard R. Zaragoza

Posted February 24, 2012

By Richard R. Zaragoza and Lauren A. Birzon

Despite spring-like weather in Washington this winter, broadcasters, with good reason, have been busy filing frosty comments in response to the FCC's Notice of Inquiry (NOI) regarding "Standardizing Program Reporting Requirements for Broadcast Licensees."

Free Press and others are urging the FCC to require television stations to complete and publicly file a "Sample Form" setting forth the number of minutes that a station devoted, during a composite week period, to the broadcast of certain categories of FCC-selected programming. The proposed form (or some version of it) would take the place of the Quarterly Issues/Programs List requirement that was adopted by the Commission nearly thirty years ago after an exhaustive review of many of the same issues that caused the FCC in 2007 to adopt FCC Form 355 ("Standardized Television Disclosure Form"), which the Commission abandoned last year on its own motion.

The 46 State Broadcasters Associations (represented by our firm), three other State Broadcasters Associations, the National Association of Broadcasters, and a coalition of network television station owners, among others, filed comments alerting the FCC that its proposals to adopt new and detailed program reporting requirements raise serious questions about the Commission's authority to do so under the First Amendment. The 46 State Associations noted that "substitut[ing] a chiefly quantity of programming measure for public service performance, which is the focus of Free Press' Sample Form, would, in the State Associations' view, inappropriately, (i) elevate form (quantity of minutes) over substance (treatment of specific issues), (ii) place other undue burdens on stations, and (iii) intertwine the government for years to come in the journalistic news judgments of television broadcast stations throughout the country."

According to the State Associations and the NAB, the FCC's failure to address the clear constitutional questions raised is peculiar in light of First Amendment case law. They are referring to the Commission's proposed adoption of a quantity of programming approach to measure station performance, which would introduce the same type of "raised eyebrow" regulatory dynamic that the U.S. Court of Appeals for the D.C. Circuit in Lutheran Church found unlawfully pressured stations to hire based on race. According to that same court in the more recent MD/DC/DE Broadcasters case, the FCC has "a long history of employing...a variety of sub silentio pressures and 'raised eyebrow' regulation of program content...as means for communicating official pressures to the licensee." In Lutheran Church, the court concluded that "[n]o rational firm--particularly one holding a government-issued license--welcomes a government audit." The court also concluded that no rational broadcast station licensee would welcome having to expend its resources, and suffer any attendant application processing delays in having to justify their actions to the FCC, regardless of whether in response to a petition to deny an application, a complaint, or other objection filed by a third party.

The network television station owners also pressed the First Amendment issue by pointing out that it is well established that the First Amendment precludes the FCC from requiring the broadcast of particular amounts and types of programming. The network owners also noted that few broadcasters, confronted with a Commission form asking them to list all of their programming related to certain content categories, will not feel pressure to skew their editorial judgments in a conforming manner.

These comments reveal the difficult position in which the FCC places itself when it attempts to craft rules that relate to specific programming content. Having launched itself down that path, the question becomes whether the Commission will attempt to face these issues and address them in any resulting rule, or merely downplay them, requiring an appeals court to address them at a later date. Only after we know the answer to that question will we know whether the term "stopwatch review" refers to a new regime of FCC content regulation, or is merely a reference to how long it takes a court to find that such rules can't coexist with the First Amendment.

FCC Enforcement and the Five-Percent Solution

Scott R. Flick

Posted February 15, 2012

By Scott R. Flick

According to the The Sign of Four, Sir Arthur Conan Doyle's second Sherlock Holmes novel, Holmes preferred a seven-percent solution (a reference that would serve as the basis for another Holmes novel and movie some seventy years later). The FCC, on the other hand, has shown a regulatory fondness for relying on a five-percent solution. For example, a five-percent voting interest triggers application of the FCC's multiple ownership rules, and when the FCC announced it would conduct random annual EEO audits, it decided that it would audit five percent of radio stations, five percent of TV stations, and five percent of cable systems each year for EEO compliance.

Further evidence of the FCC's five-percent fondness arose this week in the context of a proceeding we first wrote about in the December FCC Enforcement Monitor. That story discussed a South Carolina AM station which, in an unusual twist, was fined twice for failing to file a license renewal application on time.

Section 73.3539(a) of the FCC's Rules requires license renewal applications to be filed four months prior to the expiration date of the license. The AM station's license was set to expire in December 2003, but no license renewal application was filed. The station licensee later explained that it did not file a license renewal application because it did not realize its license had expired. In May of 2011, seven years later, the FCC notified the station that its license had indeed expired, its authority to operate had been terminated, and its call letters had been deleted from the FCC's database.

After receiving this letter, the station filed a late license renewal application and a subsequent request for Special Temporary Authority to operate the station until the license renewal application was granted. Because so much time had passed since the station failed to timely file its 2003 license renewal application, however, the deadline for the station's 2011 license renewal application (for the 2011-2019 license term) also passed without the station filing a timely license renewal application. As a result, the FCC found the station liable for an additional violation of its license renewal filing obligations.

The base fine for failing to file required forms is $3,000. Thus, the FCC found the station liable for a total of $6,000 relating to these two violations, and an additional $4,000 for violating Section 301 of the Communications Act by continuing to operate for seven years after license expiration. The base forfeiture for the latter offense is $10,000, but the FCC reduced its proposed forfeiture to $4,000 because the station was not a pirate, and had previously been licensed. Combining all of the various proposed fines, however, still left the station holding a Notice of Apparent Liability for $10,000. On the good news side, the FCC did elect to renew the station's license, holding that the station's alleged rule violations did not evidence a "pattern of abuse."

This week brought an additional chapter to the tale when the FCC released a decision on Valentine's Day responding to the licensee's request to have the $10,000 fine reduced or cancelled. The licensee presented two grounds for modifying the FCC's original order. First, the licensee noted that one of the station's co-owners had been in very poor health, and it was because of this that the station had missed the license renewal filing deadline (the decision fails to make clear whether it was the first or second license renewal application that the illness caused to be missed). The FCC indicated that it was sympathetic to the co-owner's health issues, but it made clear that illness does not excuse the failure to timely file a license renewal application, particularly where the person in poor health was not the sole owner of the station.

The second ground presented was that the $10,000 fine was excessive for a small town AM station, particularly given the station's financial status. As required by the FCC for those pleading financial hardship, the licensee turned over its tax returns for the past three years, showing annual gross revenues of $86,437, $88,947, and $103,707. Applying its five-percent solution, the FCC concluded that the licensee was entitled to a reduction in the fine, stating that "the Bureau has found forfeitures of approximately 5 percent of a licensee's average gross revenue to be reasonable," and that the "current proposed forfeiture of $10,000 constitutes approximately 11 percent of Licensee's average gross revenue from 2008 to 2010." The FCC therefore reduced the forfeiture to $4,600, stating that it would "align this case with the 5 percent standard used in prior cases."

While few licensees would be pleased to hand over five percent of their annual gross revenue to the FCC, all should be aware that five percent marks the FCC's threshold for assessing when a fine moves from being big enough to ensure future rule compliance, to instead causing undue financial hardship. For those facing an FCC fine, that is an important distinction.

Copyright Royalty Fee: Monthly Usage Statement of Account Form and Quarterly Report of Use Form Due

February 14, 2012

Commercial and noncommercial webcasters and those simulcasting radio programming over the Internet must by this date submit the Monthly Report of Use and Monthly Usage Statement of Account forms to SoundExchange for the month ending December 31, 2011.

Increase in HSR Thresholds Makes More Room for Larger Communications Transactions

Miles S. Mason

Posted February 9, 2012

By Miles S. Mason

While the FCC gets to have a say in nearly every sale or merger in the communications industry, no matter how small, the Department of Justice and the Federal Trade Commission will also be called upon if a transaction is large enough. The test for when a transaction is large enough to require a filing with the DOJ or the FTC is whether it exceeds the minimum financial thresholds of the Hart-Scott-Rodino ("HSR") Act.

Because of inflation and other factors, however, the HSR thresholds must be annually adjusted to accurately separate small deals from big deals. This separation is critical because the DOJ and the FTC have limited resources to investigate transactions, and therefore only require advance notification of transactions that involve companies or transactions above a certain minimum size. Transactions that fall below the HSR reporting thresholds, however, are not immune from antitrust scrutiny even after they are consummated if they are likely to have an anticompetitive effect in any relevant market.

On February 27, 2012, the HSR thresholds will increase significantly, with the "minimum size-of-transaction test" threshold increasing from $50 million to $68.2 million. If the value of the proposed transaction is above $68.2 million but below $272.8 million (up from $200 million), reporting is required only if the ultimate parents of the acquiring and acquired entities meet certain "size-of-person" tests, the thresholds for which will also increase on February 27, 2012. Subject to a myriad of exemptions, transactions valued at over $272.8 million under the HSR regulations must generally be reported. If that sounds complicated (and it can be), Pillsbury's Antitrust lawyers recently published an Advisory with more details on these changes.

While transactions that meet these thresholds must be reported whether or not they are communications-related, the thresholds can be particularly relevant to large broadcasters, since broadcasters that enter into a transaction requiring an HSR filing need to be aware that they may not be able to implement a local marketing agreement or similar cooperative arrangement in conjunction with an anticipated acquisition until the HSR filing has been made and the mandatory post-filing waiting period has either passed without action by the DOJ/FTC, or the DOJ/FTC have agreed to terminate the HSR waiting period early.

With communications transactions starting to heat up again, the increase in the HSR thresholds is welcome, and may simplify transactions that fall above the current HSR thresholds, but below the new ones.

When Is a Coordinate Correction Just a Coordinate Correction?

Christine A. Reilly

Posted February 6, 2012

By Christine A. Reilly

Last Thursday, the FCC's Media Bureau issued a Letter Decision involving two disputed coordinate correction applications for a station's main and auxiliary antennas that, at least on paper, proposed to increase the short spacing to another radio station. In the Letter Decision, the Media Bureau spelled out the circumstances under which a requested coordinate correction, absent an actual change in facilities, will be approved by the Media Bureau.

Certain FCC applications and registrations require parties to specify the geographic coordinates for the site that is the subject of the filing. Examples of such FCC filings include applications for modifications to an AM or FM broadcast station on FCC Form 301 or 302, antenna and tower registrations on FCC Form 854, and applications seeking authorization to operate studio transmitter links on FCC Form 601. The Letter Decision emphasized that the coordinates supplied to the FCC should be accurate not only to prevent interference among stations, but also to avoid unanticipated and potentially costly disputes like the one discussed in this decision.

As detailed in the Letter Decision, a California broadcaster filed applications seeking to correct its main and auxiliary transmitter site coordinates on FCC Form 302-FM pursuant to the FCC rule that allows a station to correct its coordinates by no more than three seconds of latitude and/or longitude without requesting a new construction permit. The applications in question were opposed by a broadcaster in an adjacent market who argued that the applications to correct the coordinates would impermissibly increase the existing short spacing between the applicant's station and its station. While the correction of coordinates did technically reduce the stated distance between the stations, it did so by only 304 feet.

The Media Bureau stated in the Letter Decision that it is an "undisputed fact" that the coordinate changes proposed would increase the short spacing, but it decided to approve the applications because the increase in short spacing was negligible, or "de minimis." In doing so, the Media Bureau relied on a 1998 case involving a coordinate correction that proposed a "paper" change in coordinates of a similar distance (less than a tenth of a kilometer).

However, the Media Bureau also concluded that in assessing the distances between transmitter sites to determine whether a short-spacing is increased under the FCC's Rules, it will round distances to the nearest kilometer. Using this rounding methodology, the distance between the stations in the Letter Decision remained unchanged by the correction, since both the old and the new distances rounded to 221 kilometers, and therefore created no "change" in the short spacing between the stations.

The take away from the Letter Decision is that the Media Bureau will likely approve applications to correct coordinates that increase an existing short spacing where (i) the application is for correction of site data that does not involve an actual facility change; (ii) the correction raises no environmental or international (or other) issues; (iii) the difference between the authorized and corrected spacing involved is de minimis (keep in mind the only clear line even after the Letter Decision is that a tenth of a kilometer, or less, will be considered de minimis by the FCC); and (iv) a change of more than a tenth of a kilometer may be permissible where rounding to the nearest kilometer would indicate no change in the distance between stations.

FCC Rejects Randall Terry Political Complaint in Illinois

Scott R. Flick

Posted February 3, 2012

By Scott R. Flick

As a follow up to my earlier post today, the FCC has just released a decision rejecting a political advertising complaint filed by Randall Terry against WMAQ-TV in Chicago.

The FCC ruled that Terry failed to meet his burden to demonstrate to the station that he is a bona fide candidate for the Democratic Presidential Primary in Illinois. The FCC also ruled that even if Terry were a bona fide candidate, it was reasonable for the station to reject his request for ad time during the Super Bowl, since a station could reasonably conclude that "it may well be impossible, given the station's limited spot inventory for that broadcast, including the pre-game and post-game shows, to provide reasonable access to all eligible federal candidates who request time during that broadcast."

One aspect of the decision that is particularly interesting is the FCC's conclusion that the mere fact that some stations may have aired the spots did not make another station's decision not to air them unreasonable. The FCC assessed the degree to which Terry demonstrated he had broadly campaigned in Illinois, concluding that "[r]eview of the information provided by Terry to the station regarding his substantial showing demonstrates that much of it is either incomplete or without specific facts to support his claims regarding particular campaign activities" and that "the few locations in which he mentions campaigning fail to demonstrate that he has engaged in campaign activities throughout a substantial part of the state, as required by Commission precedent."

While it is unlikely this decision marks the end of the controversy, it will certainly allow broadcasters to breathe easier for the moment. Unavoidably, however, the decision provides a road map to those seeking to exploit the rules in the future, detailing the type of showing they will need to make "next time" to establish a right to reasonable access, equal opportunity, and lowest unit charge (although probably not during the Super Bowl). While the FCC today set the bar appropriately high for establishing a bona fide candidacy, the benefits conveyed to candidates by the Communications Act are sufficiently attractive that it likely won't be long before we see an effort by another "candidate" to clear that hurdle.

Federal Candidates Have Much to Fear From Randall Terry Ads

Scott R. Flick

Posted February 3, 2012

By Scott R. Flick

If you are a television broadcaster, count yourself fortunate if you have not heard from the ad agency for Randall Terry. In a self-proclaimed effort to exploit the laws requiring broadcasters to give federal candidates guaranteed access to airtime as well as their lowest ad rates, Terry has announced he is running for President and wishes to air anti-abortion ads containing graphic footage of aborted fetuses during Super Bowl coverage and elsewhere.

Stations seeking not to air the ads have been the recipients of angry messages from the Terry campaign arguing that stations have no choice but to carry the ads under federal law, and they are not permitted to modify the ads in any way to delete the graphic content. That would be a generally accurate statement of the law if Terry is indeed a qualified "bona fide" candidate for President. The Terry campaign has already lodged at least one complaint at the FCC against a Chicago station for refusing to run the ads, and has sent messages to stations threatening a license renewal challenge if they don't run his ads.

To say the least, this puts stations in an awkward position. If the FCC rules that Terry is a bona fide candidate, then stations that refused to air the ads are in violation of the political ad provisions of the Communications Act. If they air the ads and the FCC rules that Terry is not a bona fide candidate, then the stations are potentially liable for the content of those ads (since the "no censorship" rule on political ads wouldn't apply). Either way, they risk license renewal challenges, either from Terry or from offended viewers. Even after the FCC rules, it's a fair bet that the decision will be appealed, meaning that it may be a while before broadcasters have any clarity as to their legal obligations.

What has been absent from the discussion so far, however, is that the issue may loom far larger over other federal candidates than it does over broadcasters. The Communications Act grants federal candidates rights that no commercial advertiser has--a guaranteed right of access to a station's airtime and, during the 45 days preceding a primary and the 60 days preceding a general election, a guarantee of paying the lowest available rate for ad time. Stated differently, broadcasters are required to air political speech they may disagree with, and to economically contribute to the candidate by selling airtime at prices below what they would be charging other short-term advertisers. An argument can be made that the former violates a broadcaster's First Amendment rights, and that the latter violates both a broadcaster's First Amendment rights (by requiring it to subsidize a candidate's political speech), and its Fifth Amendment rights (via a government "taking" of its airtime and ad revenue).

Because broadcasters have always seen the carriage of candidate ads as part of their civic duty, they have carried them with a smile and not seriously challenged the statute that imposes these obligations. However, episodes like the Terry ads expose what we have always known about these rules, and that is simply the fact that they could easily be gamed. Some of the media have described the Terry ads as attempting to exploit a "loophole" in the law, but that is of course not really accurate, since a loophole suggests the law is working in a way other than intended when in fact, guaranteed carriage and lowest unit charge for bona fide federal candidates is the very purpose of the law.

Given the number of comedians and others over the years that have taken steps to run for President, I am frankly surprised that we have not yet seen the political ad that says "I'm George Smith and I'm running for President. I hope you'll vote for me, but whether you do or don't, I think you'll find that the trip to the voting booth goes well with a nice cold Smith-brand beer." Such ads could well qualify for guaranteed placement and the lowest possible ad rates.

If broadcasters find themselves increasingly forced to carry and subsidize "candidate" ads that cause their viewers to tune out while the advertiser avoids paying normal ad rates, the unspoken agreement between broadcasters and the federal government to live with the political advertising rules may come to an end, leading to a constitutional challenge of those rules. Sound farfetched? Not really. For decades, the FCC enforced an EEO rule that went beyond what was constitutionally permissible, but the FCC had perfected the art of fining stations an amount large enough to ensure future compliance, but low enough that it wasn't worth the expense of challenging the rule in court. That "truce" between broadcasters and the FCC ended when the FCC upped the ante and sought to take a station's license away for alleged EEO rule violations. At that point, our firm was hired to defend the station's license at hearing. We let both the FCC and the petitioner that had raised the challenge know that the station was ready to vigorously defend its license, and that pursuing the case could well result in a court invalidating the FCC's decades-old EEO rule. They pursued the case anyway, and the U.S. Court of Appeals for the DC Circuit did indeed toss out the EEO rule as unconstitutional.

Broadcasters are now faced with a somewhat similar situation, where their licenses are being threatened because a potential petitioner is arguing that they must forgo their First Amendment right to select their content, and instead air content (at a discount) that they find visually repugnant, regardless of their own political views on the abortion issue. If they are forced to do so, they have a beautiful set of facts with which to challenge the political ad provisions of the Communications Act, potentially resulting in a finding that those provisions are not constitutional in the current media environment, much to the detriment of candidates everywhere.

It is therefore not surprising that steps are being taken to avoid this "high noon" constitutional showdown between broadcasters and the Communications Act. The Democratic National Committee attempted to take some of the pressure off of broadcasters by releasing a letter stating, among other things, that "Mr. Terry's claims to be a Democratic candidate for President are false. Accordingly, he should not be accorded the benefits of someone conducting a legitimate campaign for public office." This letter gives the FCC ammunition to support broadcasters that do not wish to air the ads, and it is in no one's interest to force broadcasters into a corner where challenging the constitutionality of the political rules is their least objectionable option. If that happens, future candidates could well find that they will no longer be "accorded the benefits of someone conducting a legitimate campaign for public office."

Scott Flick and Richard Zaragoza of Pillsbury to Speak to Illinois and Wisconsin Radio Broadcasters on "A Sense of Renewal: Navigating the FCC's Broadcast License Renewal Process," February 2, 2012

February 2, 2012

Scott R. Flick and Richard R. Zaragoza of Pillsbury will review the FCC's Broadcast License Renewal Process during this Webinar presented by the Illinois Broadcasters Association and Wisonsin Broadcasters Association on February 2nd at 2:00 pm Central Time.

Glenn Richards to Speak on "Regulatory 2.0: The New Rules are Here"

Glenn S. Richards

February 2, 2012

Glenn S. Richards will be moderating this panel at the 4GWE Conference in Miami Beach on Thursday, February 2 from 2-2:45 PM. The complete conference agenda can be found at http://www.mobilitytechzone.com/4gwe/east-12/agenda.aspx.

Pre-filing Renewal Announcements for Radio Stations

February 1, 2012

Full-power AM and FM radio broadcast stations licensed to communities in Indiana, Kentucky or Tennessee must on this date begin to air their pre-filing renewal announcements in accordance with the FCC's regulations. Additional announcements must air on February 16, March 1 and March 16.

Post-filing Renewal Announcements for Radio Stations

February 1, 2012

Full-power AM and FM radio broadcast stations licensed to communities in Arkansas, Louisiana or Mississippi must begin on this date to air their post-filing license renewal announcements in accordance with the FCC's regulations. Additional announcements must air on February 16, March 1, March 16, April 1 and April 16. FM Translator stations licensed to communities in these states must arrange for the required newspaper public notice of their license renewal application filing.

Filing of Applications for Renewal of Licenses for Radio Stations

February 1, 2012

Full-power AM and FM radio broadcast stations, as well as FM Translator stations, licensed to communities in Arkansas, Louisiana or Mississippi must electronically file their applications for renewal of license on FCC Form 303-S, along with their Equal Opportunity Employment Reports on FCC Form 396 by this date, and commercial stations must promptly submit their FCC license renewal application filing fee. FCC Forms 303-S and 396 as filed must be placed in stations' public inspection files.

FCC Form 323-E Biennial Ownership Report Due

February 1, 2012

Noncommercial radio stations licensed to communities in Arkansas, Louisiana, Mississippi, New Jersey, or New York, and noncommercial television stations licensed to communities in Kansas, Nebraska or Oklahoma (other than sole proprietorships or partnerships composed entirely of natural persons) must electronically file by this date their biennial ownership reports on FCC Form 323-E, unless they have consolidated this filing date with that of other commonly owned stations licensed to communities in other states. FCC Form 323-E does not require a filing fee. The form as filed must be placed in stations' public inspection files.

Annual EEO Public File Report Required

February 1, 2012

Station employment units that have five or more full-time employees and are comprised of radio and/or television stations licensed to communities in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, or Oklahoma must by this date place in their public inspection file and post on their station website a report regarding station compliance with the FCC's EEO Rule during the period February 1, 2011 through January 31, 2012. A more detailed review of station EEO obligations and the steps for implementing an effective EEO program can be found in our most recent EEO Advisory.