August 2012 Archives

FCC Enforcement Monitor

Scott R. Flick

Posted August 30, 2012

By Scott R. Flick and Lauren A. Birzon

July 2012
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 is a special issue regarding recent FCC actions that provide a detailed (and expensive) look at Section 73.1206, the prohibition on recording telephone calls for broadcast.

FCC Issues a Total of $41,000 in Fines for Broadcaster Airing Prank Telephone Calls

The close of August in Washington, D.C. has brought with it a surge of beautiful weather, baseball excitement (for the first time in recent memory), and ... forfeiture orders related to the improper recording of telephone calls for broadcast. On August 22nd, the FCC issued two forfeiture orders assessing a combined $41,000 in fines against licensees owned by the same parent company for violations of the telephone broadcast rule.

The telephone broadcast rule, Section 73.1206 of the Commission's Rules, requires that, "[b]efore recording a telephone conversation for broadcast, or broadcasting such a conversation simultaneously with its occurrence, a licensee shall inform any party to the call of the licensee's intention to broadcast the conversation, except where such party is aware, or may be presumed to be aware from the circumstances of the conversation, that it is being or likely will be broadcast." While the rule language only talks about providing notice to the calling party, the FCC has reiterated many times that when a station employee intends to record a call for broadcast or broadcasts the call live, the employee must also obtain the party's consent before recording the call or going live.

Both orders released on August 22nd involved a finding that the licensee had violated this rule. The first order involved prank calls made in April 2006 by radio personalities to members of the public during a comedy segment of the station's morning show. In one conversation, the caller pretended to be an intruder hiding under the bed of the person receiving the call; in another, the caller pretended to be a loan shark bent upon collecting a debt.

The FCC began investigating the prank calls after receiving a complaint from a station listener. During the investigation, the licensee indicated it was unable to confirm or deny whether the prank calls aired on its morning show, and could not provide a recording or transcript of the program. The licensee acknowledged, however, that the program identified in the complaint was aired on the station and was simulcast on two co-owned stations.

The second forfeiture order released on the 22nd also involved the broadcast of an alleged prank call in which the caller pretended to be a hospital employee who then informed the call recipient that the recipient's husband had been in a motorcycle accident and died at the hospital. When questioned about the incident, the licensee told the FCC that its parent company had contracted with an outside vendor who made and recorded the call. The licensee admitted that it broadcast the call on multiple occasions.

In the first case, the FCC had proposed a $25,000 fine. In the second case, the FCC had proposed a $16,000 fine. In both cases, the licensee urged cancellation of the proposed fines, to no avail. In batting down a myriad of arguments raised by the licensees, the FCC affirmed not only its broad investigative powers to enforce Section 73.1206, but also the licensees' responsibility to both adhere to and demonstrate their adherence to the Commission's Rules.

These two decisions provide an excellent primer for broadcasters on the FCC's enforcement of the telephone broadcast rule, as between them, the FCC addressed a multitude of defenses raised by the licensees, ultimately concluding that none of those defenses could prevent the imposition of very substantial fines. More specifically, the FCC shot down each of the following licensee arguments:

Continue reading "FCC Enforcement Monitor"

FCC Adopts Equipment-Related Consent Decree With Guitar Manufacturer to the Tune of a Quarter Million Dollars

Tony Lin

Posted August 21, 2012

By Tony Lin

Last week the Federal Communications Commission (FCC) adopted a Consent Decree involving a "voluntary contribution" of more than a quarter of a million dollars by a well-known guitar manufacturer, Fender Musical Instruments Corporation, relating to claims of unauthorized marketing of bass amplifiers, pre-amplifiers, tuners, audio mixers, and wireless microphones. While one might be puzzled by the FCC's interest in regulating musical equipment, the fact is that these devices, like virtually all modern day products, incorporate digital circuitry and generate (intentionally or unintentionally) radio-frequency signals that can cause interference to other spectrum users. The FCC's action is a reminder to all types of businesses that digital devices are regulated and must comply with the FCC's Part 2 and Part 15 rules regarding equipment authorization, including certification, verification, and declarations of conformity.

The FCC's investigation into Fender's products began in June 2010, when the FCC sent the company a letter of inquiry. While the content of the letter is not publicly available, it appears that the FCC sought information about when Fender received equipment authorizations for certain products, the labeling of such products, and the information disclosed in the user manuals for those products.

Over the course of the next two years, Fender, through its legal counsel, submitted a number of filings responding to the FCC's inquiry, and executed tolling agreements that permitted the FCC to extend its investigation. Ultimately, Fender reached an agreement with the FCC terminating the investigation. In the agreement, Fender did not acknowledge any wrongdoing (nor did the FCC reach any such conclusion), but the company voluntarily agreed to contribute $265,000 to the U.S. Treasury and institute an internal program to ensure future compliance with the FCC's rules. While this is nowhere close to being the most expensive equipment-related contribution or fine the FCC has received or assessed for unlicensed devices (in one case the FCC assessed a $1 million dollar forfeiture), it does send a loud message to manufacturers and importers of almost all modern day electronic devices that the FCC polices its equipment authorization rules and treats potential violations seriously.

For an overview of the FCC's Part 2 and Part 15 rules, you can check out our Client Advisory on the subject.

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

August 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 June 30, 2012.

Client Alert: FCC Sets September 13, 2012 Deadline for Payment of FY 2012 Annual Regulatory Fees

Paul A. Cicelski

Posted August 13, 2012

By Paul A. Cicelski

The FCC has announced that full payment of all applicable Regulatory Fees for Fiscal Year 2012 (FY 2012) must be received no later than 11:59 PM, ET, on September 13, 2012. As of today, the Commission's automated filing and payment system, the Fee Filer System, is now available for filing and payment of FY 2012 regulatory fees.

As we reported last month, the FCC released a Report and Order containing final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for FY 2012. The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

These annual regulatory fees are owed for most FCC authorizations held as of October 1, 2011 by any licensee or permittee which is not otherwise exempt from such fees. As has been the case since 2009, the FCC requires that licensees use the Commission's online Fee Filer System to submit their regulatory fees. In order to do so, parties must have a valid FCC Registration Number (FRN) and password. Payment can be made with a credit card, online payment from a bank account, check (after receiving an electronic voucher via Fee Filer), or wire transfer. More information regarding submitting a payment can be found here at the FCC's Regulatory Fees website. Note that, effective June 30, 2012, the U.S. Treasury is no longer accepting credit card payments greater than $49,999.99.

For more information on annual regulatory fees, including assistance in preparing and filing them with the FCC, please contact any of the lawyers in the Communications Practice Section.

Scott Flick of Pillsbury to Speak at the Texas Association of Broadcasters 59th Annual Convention & Trade Show, August 8 - 9, 2012

Scott R. Flick

August 9, 2012

Scott R. Flick will speak during this seminar on "DC Regulatory Update," taking place on August 9th from 11:00 am - 12:15 pm in Austin.

The discussion will focus on latest compliance issues for broadcasters, including public/political files online, video descriptive rules, LPFM/translators, among others

For more information and to register, please click here.

TAB/SBE 59th Annual Convention & Trade Show: August 8-9, 2012: Renaissance Austin Hotel

August 8, 2012

For more information on the Texas Association of Broadcasters/Society of Broadcast Engineers 59th Annual Convention & Trade Show, visit http://www.tab.org/convention-and-trade-show/.

Online Public File for TV Launches and Stations Need to Adapt; Particularly Those with August 16th License Renewal Announcements

Paul A. Cicelski Lauren Lynch Flick

Posted August 6, 2012

By Lauren Lynch Flick and Paul A. Cicelski

On Thursday, the much anticipated Online Public Inspection File for television stations launched more or less successfully. To complete the task in the short time given them, the FCC staff put forth an Olympic effect, and while they were subject to some point deductions for a few stumbles in the regulatory gymnastics involved, they largely "stuck the dismount" as the system went live.

To its credit, the FCC clearly listened to the many voicemails and emails sent to FCC staff, as well as the comments and questions raised during the FCC's online demonstrations prior to launch. Some potentially nasty pitfalls for stations were ironed out via the FAQs, and the system will hopefully continue to be refined in the weeks and months ahead.

In the meantime, here is what stations need to do now that the system is operational:

1. Be sure you can log in. The FCC's staff reports that there were a considerable number of stations that had lost or forgotten their FRN (Federal Registration Number) and password or otherwise had trouble with the log in process. The FRN has become an all-access pass to a station's records with the FCC and anyone who has it can file applications on the station's behalf in any number of FCC filing systems. The potential for mischief that the FRN and password presents is worthy of another blog post, but for now, know that stations that have used multiple FRNs and passwords may find it hard to get access to their online public inspection files and need the staff's assistance in straightening the problem out.

2. Input your station address. On the Authorizations page and again on the Letters and Emails From the Public page, stations need to fill in the station's main studio address, telephone number and email contact information. Stations should also verify that their closed captioning contact is listed correctly.

3. Cross-reference the online public file on the station's home page. Stations that have websites must include a link on their home page to their online public inspection file and provide the public with contact information for a station employee that can assist the disabled in accessing the public file.

4. Remove out of date documents automatically uploaded by the FCC. Since the FCC simply linked its CDBS public view to the new online public files, there may be numerous items that can safely be discarded as no longer relevant. The FCC did not do this automatically because the retention periods for the various categories of documents that seem straightforward at first blush actually vary considerably depending on a station's individual circumstances. The FCC has given stations enough rope to hang themselves here, so care should be taken before documents are removed. Nevertheless, for most stations, a lot of material is being put out there that need not be.

5. Check the station's Section 73.1212(e) and BCRA (Bipartisan Campaign Reform Act) folders. Chances are good that confusion has surrounded your station's 73.1212(e) folder for years, with the result that many stations' Section 73.1212(e) folders are empty. Section 73.1212(e) is the rule requiring stations to maintain a list of the executive officers of organizations that buy time to discuss political matters or controversial issues of public importance, and to place that list in the public inspection file. Most stations have treated these types of spots no differently than they do spots purchased by candidates for elective office. As a result, often when we visit a station's public file, we find neatly labeled folders for each candidate and each issue in the same section of the file cabinet and an empty folder labeled "Section 73.1212(e) Sponsorship Identification" at the very end of the drawer. When BCRA was implemented (requiring stations to maintain more detailed information about third-party political and issue ad buys involving controversial national issues), stations simply labeled more folders and added the BCRA materials to the political file right next to the materials on candidate ads. In addition, many stations found it difficult to distinguish between controversial national issues versus controversial state or local issues, and simply collected and maintained the same disclosure information for all ads that seemed "political" in nature, even if placing that information in the file was not actually required.

Technically (and here's where we separate the real communications lawyers from people who have interesting lives), the paperwork kept for non-BCRA issue ads was never part of a station's "political file", and the BCRA paperwork, which is nowhere mentioned in either the FCC's political or public file rules, is part of the political file. This distinction could have meant that stations that are not network affiliates located in the Top 50 markets would have been exempt from uploading candidate and BCRA paperwork until July 2014, but would still have to upload state and local issue ad paperwork immediately. Fortunately, the FCC appears to have sidestepped this problem by including in its FAQs a statement acknowledging that, because many stations simply lump all these "political" documents together, they can treat them all as part of the "political file" and only start uploading them in July 2014 (unless they are a Big 4 network affiliate in a Top 50 market).

6. Decide when to start uploading the station's pre-August 2 documents. The FCC is giving stations six months to upload their required pre-August 2 documents to the website. While the original Report and Order only gave stations five months from the rule's effective date to get this done, which would make final compliance due over the New Year's holiday, the FCC through its FAQs and its staff's advice is granting stations until February 2, 2013 to finish the upload process. Given the continuous "Recent Station History" feed on the FCC's website notifying the public of the most recent filings, however, stations might want to time their uploading activities to times when other filings are also taking place (i.e, October 1 EEO Public File Reports or October 10 Quarterly Issues/Programs Lists). That way, their recently filed documents are likely to be moved off the front page more quickly.

7. Stations airing pre- or post-filing license renewal announcements must update the language of the spots, while understanding that the public might not appreciate the change. The FCC has now updated the language of the pre- and post-filing license renewal announcements so that, on the one hand, it directs the public to find the station's license renewal application at www.fcc.gov, but, on the other hand, tells the public to come to the station's main studio or to the FCC to learn more about the license renewal process. The problem is that stations which filed their license renewal applications on June 1 or August 1 have been telling their viewing public for months that their applications are available at the main studio. This may lead to some disgruntled visitors to the studio, and stations will also need to think about exactly what they can offer members of the public that show up in their lobbies asking for "further information concerning the FCC's broadcast license renewal process." As a matter of good public relations, stations going through license renewal may want to consider keeping a hard copy of their license renewal application and the FCC's "The Public and Broadcasting" publication available to pacify members of the public who trek to their stations in response to the public notices. Of course, stations that have not transitioned all of the required elements of the public file into the FCC's system must still make the public file available upon request in the traditional manner, and stations will always have to make letters and emails from the public available at the studio even after the transition has ended.

Finally, broadcasters have long noted that visitors to the public file are few and far between. As a result, it has been all too easy for stations to become rusty on the procedures for making the file immediately available to the public, despite the many fines that have been assessed by the FCC for failure to do so. It is likely that visits will become even less frequent now that much of the file will be available online. However, stations must continue to prepare their staffs to receive the public and respond to questions about what is at the station and what is online. The upcoming months will likely be a learning process for all.

Pre-filing Renewal Announcements for Radio and Television Stations

August 1, 2012

Full-power AM and FM radio broadcast stations licensed to communities in Iowa or Missouri, and television stations and Class A television stations, as well as LPTV stations capable of local origination, licensed to communities in Florida, Puerto Rico or the Virgin Islands, must on this date begin to air their pre-filing renewal announcements in accordance with the FCC's regulations. Additional announcements must air on August 16, September 1 and September 16.

Post-filing Renewal Announcements for Radio and Television Stations

August 1, 2012

Full-power AM and FM radio broadcast stations licensed to communities in Illinois or Wisconsin, and television stations and Class A television stations, as well as LPTV stations capable of local origination, licensed to communities in North Carolina or South Carolina, 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 August 16, September 1, September 16, October 1 and October 16. FM Translator stations and TV translator stations, as well as LPTV stations not capable of local origination, 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 and Television Stations

August 1, 2012

Full-power AM and FM radio broadcast stations, as well as FM Translator stations, licensed to communities in Illinois or Wisconsin, and television, Class A, LPTV and TV Translator stations licensed to communities in North Carolina or South Carolina, 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

August 1, 2012

Noncommercial radio stations licensed to communities in Illinois or Wisconsin and noncommercial television stations licensed to communities in California, North Carolina or South Carolina (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

August 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 California, Illinois, North Carolina, South Carolina or Wisconsin 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 August 1, 2011 through July 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.