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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:

  • FCC Proposes $116,156,250 Robocalling Fine for Over 20,000 Calls to Toll Free Numbers
  • Illinois Class A TV Station Pays Nearly Six-Figure Penalty for FCC Violations
  • FCC Proceeds with $4,000 Civil Penalty Against Alaska Broadcaster Following Investigation

Robocaller Fined Over $116 Million for TCPA Violations

The FCC issued a Forfeiture Order imposing a $116,156,250 penalty against one individual and three related companies (the Companies) for making 9,763,599 illegal robocalls to toll free numbers without the called party’s prior express consent.  The robocalls claimed to be a “Public Service Announcement” warning toll free customers about the dangers of illegal robocalls, and would repeat for up to ten hours unless the receiving party terminated the call.  This is one of the largest Telephone Consumer Protection Act (TCPA) robocall fines ever issued by the FCC.

As we discussed here, in July 2022 the FCC adopted a Notice of Apparent Liability for Forfeiture (NALF) in which it proposed a $116 million penalty.  The individual contested it, stating that he struggled to find anything in the NALF that is accurate, but offering no counterarguments to the FCC’s findings.  The individual asserted that he was not the party the FCC was after, that the calls were permissible because they were made in good faith, that he did not violate the TCPA “with intent” because he was purportedly advised by a lawyer that the robocalling operation did not violate the TCPA, and that the FCC should have issued a warning prior to releasing the NALF.

When the FCC assesses fines, it considers the “nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.”  After fully considering the individual’s responses to the NALF, the FCC affirmed the fine, stating that it was in accordance with Section 503(b) of the Communications Act of 1934 (the Act), Section 1.80 of the Commission’s Rules, and the FCC’s Forfeiture Policy Statement (Forfeiture Policy).

The TCPA, Section 227(b)(1)(A)(iii) of the Act, and Section 64.1200(a)(1)(iii) of the FCC’s Rules prohibit making prerecorded voice calls to numbers for which the called party is charged for the call (including toll free numbers) unless there is an emergency, or the recipient has given prior express consent to receive the call.  The FCC found that the Companies made 9,763,599 illegal robocalls to toll free numbers, and the FCC’s Enforcement Bureau (the Bureau) staff verified at least 20,650 of those calls were violations of the TCPA.

The FCC dismissed the individual’s ‘mistaken identity’ argument as meritless, explaining that its investigation identified the Companies as the source of the 20,650 verified robocalls.  In October 2020, an industry group tasked by the Bureau with tracing illegal robocalls alerted the Bureau that a caller was apparently targeting toll free services with robocalls.  The calls were traced to a competitive local exchange carrier (CLEC) which identified the sources of the calls as two of the Companies.  The CLEC supplied records showing that the individual signed a service agreement with the CLEC in July 2020 for several thousand direct inward dial telephone numbers and VoIP service.  Additionally, call records produced by the CLEC showed millions of calls to toll free numbers originating from the Companies’ account between January and March 2021.  The CLEC paid one of the Companies $0.0001 (one ten thousandth of a cent) for each minute of outbound calls that it made to toll free numbers.  The individual then used the revenue from the robocalls to fund telephone denial of service (TDoS) attacks against other companies. The individual offered no evidence to refute these findings, and the FCC concluded that the Companies made the calls identified in the NALF.

The FCC also dismissed the argument that the calls were permissible because the toll free customers receiving them were not charged for calls.  The FCC reviewed a number of the toll free service providers’ publicly available billing practices, and found that the providers do indeed charge their toll free customers on a per call basis or in bundles of minutes.  Thus, the robocalling scheme resulted in actual financial losses to the toll free customers receiving the calls.  Finally, the FCC explained that there is no “good faith” or “public safety doctrine” exception in the TCPA that would permit the calls, rejecting the individual’s claim that he “acted in good faith.”

Section 227(b)(4)(E) of the Act provides that the statute of limitations is four years (rather than one year) if the violation was committed “with the intent to cause such violation.”  In the NALF, the FCC stated that the Companies made prerecorded calls with the intent to violate the TCPA because the Companies (1) targeted protected toll free numbers; and (2) had no reasonable basis to believe they had consent for the calls.  The FCC noted that the individual’s response refuted neither of those findings, as he did not contest that he targeted toll free numbers, and merely argued that reliance on legal advice constituted a defense against liability.  The FCC disagreed, and cited the Companies’ complex calling scheme as further evidence of intentionality.

Despite the individual’s claim that he was entitled to a warning, the Commission noted that the TRACED Act allows the FCC to issue a Notice of Apparent Liability for violations of Section 227(b) of the Act without first issuing a warning citation.  The FCC affirmed its decision in the NALF, concluding that the $116,156,250 fine was warranted due to the Companies’ egregious conduct.  After considering the relevant factors and its Forfeiture Policy, the FCC found that the proposed base fine and upward adjustments applied in the NALF were consistent with the FCC’s rules.  The Commission therefore found the individual and Companies jointly and severally liable, and the $116,156,250 fine must be paid within 30 calendar days after the release of the Forfeiture Order.

Rule Violations by Illinois Class A TV Station Result in Consent Decree and $97,000 Penalty

In the course of processing the license renewal application of an Illinois Class A TV station, the FCC’s Media Bureau determined that (1) the license renewal application was filed nearly a month after the filing deadline; (2) the applicant certified that there had been no violations by the licensee of the Act or the rules or regulations of the FCC during the preceding license term; and (3) the applicant certified that all required documentation had been uploaded to the station’s Public Inspection File when required.  According to the Media Bureau, however, the licensee failed to timely upload 28 issues and programs lists, all of its records concerning commercial limits compliance in children’s programming, 23 children’s television programming reports, and copies of documents related to a 2014 forfeiture order issued to the licensee.

Section 73.3526 of the FCC’s Rules lists the materials a Class A TV station must upload to its Public Inspection File and the deadlines for making those submissions.  Under Sections 73.3514(a) and 1.65(a) of the FCC’s Rules, applications filed with the FCC must include all information called for by the application form, and the applicant must ensure the continuing accuracy and completeness of its application by making any necessary amendments within 30 days of a response becoming inaccurate.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ Public Inspection Files by October 10, 2023, reflecting information for the months of July, August, and September 2023.

Content of the Quarterly List

The FCC requires each broadcast station to air a reasonable amount of programming responsive to significant community needs, issues, and problems as determined by the station.  The FCC gives each station the discretion to determine which issues facing the community served by the station are the most significant and how best to respond to them in the station’s overall programming.

To demonstrate a station’s compliance with this public interest obligation, the FCC requires the station to maintain and place in the Public Inspection File a Quarterly List reflecting the “station’s most significant programming treatment of community issues during the preceding three month period.”  By its use of the term “most significant,” the FCC has noted that stations are not required to list all responsive programming, but only that programming which provided the most significant treatment of the issues identified.

Given that program logs are no longer mandated by the FCC, the Quarterly Lists may be the most important evidence of a station’s compliance with its public service obligations.  The lists also provide important support for the certification of Class A television station compliance discussed below.  We therefore urge stations not to “skimp” on the Quarterly Lists, and to err on the side of over-inclusiveness.  Otherwise, stations risk a determination by the FCC that they did not adequately serve the public interest during their license term.  Stations should include in the Quarterly Lists as much issue-responsive programming as they feel is necessary to demonstrate fully their responsiveness to community needs.  Taking extra time now to provide a thorough Quarterly List will help reduce risk at license renewal time.

The FCC has repeatedly emphasized the importance of the Quarterly Lists and often brings enforcement actions against stations that do not have complete Quarterly Lists in their Public Inspection File or which have failed to timely upload such lists when due.  The FCC’s base fine for missing Quarterly Lists is $10,000.

Preparation of the Quarterly List

The Quarterly Lists are required to be placed in the Public Inspection File by January 10, April 10, July 10, and October 10 of each year.  The next Quarterly List is required to be placed in stations’ Public Inspection Files by October 10, 2023, covering the period from July 1, 2023 through September 30, 2023. Continue reading →

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Today the Federal Communications Commission released its annual Public Notice setting the deadline for paying annual regulatory fees.  Payments can be made via the FCC’s Commission Registration System (CORES) beginning today through 11:59 p.m. Eastern Time on September 20, 2023.

In addition to marking this deadline on their calendars, broadcasters should note with some satisfaction that despite the FCC’s overall budget increasing by more than $8,000,000, regulatory fees for broadcasters decreased by between 5 and 8%.  That decrease results from years of effort by broadcasters’ state and national trade associations, who have repeatedly argued that the FCC’s methodology for allocating regulatory fees does not accurately reflect how the work of the FCC has changed since the regulatory fee regime was instituted more than 30 years ago.

The FCC’s fee-setting methodology divides its workforce into what it calls direct and indirect FTEs (“Full Time Employees” or “Full Time Equivalents”).  Direct FTEs are those who work directly for one of the four “core” licensing bureaus: the International Bureau, the Wireless Telecommunications Bureau, the Wireline Competition Bureau, and the Media Bureau.  (The core bureaus will be updated next year to reflect the creation of the new Space Bureau.)  Indirect FTEs are all other FTEs of the FCC, which are treated the same as FCC “overhead” (e.g., rent) in setting fees.

The FCC allocates its budget among the regulatees of each of the four core licensing bureaus in proportion to the number of direct FTEs working in that particular bureau.  Since the Media Bureau houses approximately 32% of all the direct FTEs, its regulatees, including broadcasters, have to pay 32% of all agency overhead (which includes indirect FTEs) as well.

In recent years, only about one-quarter of the agency’s total FTEs have been considered direct, while the remaining three-quarters are considered indirect.  As a result, the determination as to which regulatees must pay the lion’s share of the FCC’s total budget is based on the categorization of those relatively few direct FTEs.  This impact is further exacerbated by the existence of indirect FTEs that are housed outside of the four core licensing bureaus, but whose work benefits specific industries.  Since they do not work in one of the core bureaus, they are not treated as a direct cost of the industries their work actually benefits, but as just more FCC overhead to be paid for by broadcasters and other industries that do not benefit from their work.

So, what changed this year?  In response to an influx of comments the FCC received in response to a Notice of Inquiry and a Notice of Proposed Rulemaking, the FCC reexamined the work performed by FTEs in certain of its indirect bureaus and offices, including the Office of Economics and Analytics, the Office of General Counsel, and the Public Safety and Homeland Security Bureau.  Based on this review, the FCC reallocated a large number of these previously indirect FTEs to direct FTE status. Continue reading →

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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:

  • FCC Proposes $12,500 Fine for False Certification That FM Translator was Constructed as Authorized
  • Telecommunications Company Warned Over Apparent Transmission of Illegal Robocalls
  • Station Licenses in Danger Over Lack of Candor and Intentional Misrepresentation Claims Before the FCC

False Certification Brings $12,500 Proposed Fine for Louisiana FM Translator Station

The FCC issued a Notice of Apparent Liability for Forfeiture (NAL) to the licensee of a Louisiana FM translator for falsely certifying to construction as authorized (but without intent to deceive), failing to file a required form to obtain consent to change antennas, and for constructing and operating with an unauthorized antenna for approximately two months.  The violations alleged were raised by a third party Petition for Reconsideration (Petition) asking the FCC to reconsider the grant of a license to the new FM translator station.  The Commission found that the station apparently violated its rules and proposed a $12,500 fine.

In April 2018, the licensee applied for a permit to construct a new FM translator, proposing to use a directional antenna mounted 150 meters above ground level.  The FCC granted a construction permit in May 2018, requiring completion by May 2021.  The licensee completed construction in time and filed a license application in August 2019 certifying that the translator had been constructed as authorized.  Fifteen days after the FCC issued a public notice for the application, the license was granted in September 2019.  However, the Petition was filed in October, alleging that material in the license application was false, and that the translator had been constructed with an omnidirectional (rather than directional) antenna, and mounted at a height of 145 meters above ground level (5 meters lower than authorized).

In opposing the Petition, the licensee acknowledged it used an omnidirectional antenna for approximately two months in 2019, explaining that the authorized directional antenna had arrived damaged, and it was eager to commence operations.  The licensee explained that it operated the facilities at a much lower power level than authorized to minimize any potential for interference from using an omnidirectional antenna.  It further explained that it had no intent to deceive but did not know the significance of the antenna substitution, so it did not mention this to legal counsel who prepared the license application.  In October 2019, the translator began operating with the repaired authorized antenna, but it was mounted at 146.6 meters.  In December 2019, the Licensee filed an application for a minor modification, proposing to operate the antenna 143 meters above ground level and changing the translator’s community of license.  The Commission granted a construction permit for this modification, and an application to license the modified facilities was filed in January 2020.  The license was granted in February 2020.

Among other requirements, petitioners filing a petition for reconsideration must have either participated in the initial proceeding or show good reason why it was not possible for them to have participated earlier.  In this case, the FCC found that the Petitioner had ample time to file an informal objection during the 15-day period that the license application was on public notice before it was granted.  As such, the Commission dismissed the Petition as unacceptable under § 1.106(b) of its Rules.  Nevertheless, the FCC acknowledged the licensee’s admissions and considered on its own motion an appropriate response.

Section 74.1251(b)(2) requires FM translator licensees to request and receive permission prior to making any changes to their antenna systems.  Section 1.17(a)(1) of the FCC’s Rules prohibits individuals from intentionally providing incorrect “material factual information” or intentionally omitting “material information.”  The Commission explained that “intent to deceive” is an essential element of “misrepresentation” and “lack of candor,” and thus submitting inaccurate information due to carelessness or gross negligence is not misrepresentation or lack of candor.  However, Section 1.17(a)(2) of the Rules prohibits submission of incorrect information, even without deceptive intent.

The FCC found no evidence of deceptive intent and thus no misrepresentation or lack of candor.  However, the FCC determined that the licensee acted negligently when it failed to tell its legal counsel that the antenna was not constructed as authorized and when it failed to review the application thoroughly before filing.  The FCC found that the licensee apparently violated Section 1.17(a)(2) of the Rules because it had no reasonable basis to certify that the translator was constructed as authorized, Section 74.1251(b) by failing to file an application to alter an antenna system, and Section 74.1251(b)(2) by constructing and operating with an unauthorized antenna at an unauthorized height.

Section 1.80(b) of the Rules sets a base fine of $3,000 for failure to file a required form and $10,000 for construction or operation without an instrument of authorization.  The guidelines do not list a base fine amount for a false certification.  Thus, the FCC considers the relevant statutory factors in Section 503(b)(2)(E) of the Communications Act, including “the nature, circumstances, extent and gravity of the violation, and with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.”  In previous cases of false certifications by secondary stations without intent to deceive, the FCC has found a $5,000 fine appropriate.  Taking into consideration all relevant factors, especially that the translator is providing secondary service, the FCC decided to reduce the combined fine here for failing to file an application and unauthorized operation from $13,000 ($3,000 + $10,000 base fines) to $7,500.  With respect to false certification, the FCC proposed an additional fine of $5,000, consistent with the prior cases involving secondary stations.  Thus, the total proposed fine is $12,500 ($7,500 + $5,000). Continue reading →

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This Pillsbury Broadcast Station Advisory is directed to radio and television stations in the areas noted above, and highlights upcoming deadlines for compliance with the FCC’s EEO Rule.

October 1 is the deadline for broadcast stations licensed to communities in Alaska, American Samoa, Florida, Guam, Hawaii, Iowa, the Mariana Islands, Missouri, Oregon, Puerto Rico, the Virgin Islands, and Washington to place their Annual EEO Public File Report in their Public Inspection File and post the report on their station website. 

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment.

In addition, those SEUs with five or more full-time employees (“Nonexempt SEUs”) must also comply with the FCC’s three-prong outreach requirements.  Specifically, Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening, except in exigent circumstances,[1] (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term.  These Menu Option initiatives include, for example, sponsoring job fairs, participating in job fairs, and having an internship program.

Nonexempt SEUs must prepare and place their Annual EEO Public File Report in the Public Inspection Files and on the websites of all stations comprising the SEU (if they have a website) by the anniversary date of the filing deadline for that station’s license renewal application.  The Annual EEO Public File Report summarizes the SEU’s EEO activities during the previous 12 months, and the licensee must maintain adequate records to document those activities.

For a detailed description of the EEO Rule and practical assistance in preparing a compliance plan, broadcasters should consult The FCC’s Equal Employment Opportunity Rules and Policies – A Guide for Broadcasters published by Pillsbury’s Communications Practice Group.

Deadline for the Annual EEO Public File Report for Nonexempt Radio and Television SEUs

Consistent with the above, October 1, 2023 is the date by which Nonexempt SEUs of radio and television stations licensed to communities in the states identified above, including Class A television stations, must (i) place their Annual EEO Public File Report in the Public Inspection Files of all stations comprising the SEU, and (ii) post the Report on the websites, if any, of those stations.  LPTV stations are also subject to the broadcast EEO Rule, even though LPTV stations are not required to maintain a Public Inspection File.  Instead, these stations must maintain a “station records” file containing the station’s authorization and other official documents and must make it available to an FCC inspector upon request.  Therefore, if an LPTV station has five or more full-time employees, or is otherwise part of a Nonexempt SEU, it must prepare an Annual EEO Public File Report and place it in its station records file.

These Reports will cover the period from October 1, 2022 through September 30, 2023.  However, Nonexempt SEUs may “cut off” the reporting period up to ten days before September 30, so long as they begin the next annual reporting period on the day after the cut-off date used in the immediately preceding Report.  For example, if the Nonexempt SEU uses the period October 1, 2022 through September 20, 2023 for this year’s report (cutting it off up to ten days prior to September 30, 2023), then next year, the Nonexempt SEU must use a period beginning September 21, 2023 for its report.

Deadline for Performing Menu Option Initiatives

The Annual EEO Public File Report must contain a discussion of the Menu Option initiatives undertaken during the preceding year.  The FCC’s EEO Rule requires each Nonexempt SEU to earn a minimum of two or four Menu Option initiative-related credits during each two-year segment of its eight-year license term, depending on the number of full-time employees and the market size of the Nonexempt SEU.

  • Nonexempt SEUs with between five and ten full-time employees, or that are located in “smaller markets,” must earn at least two Menu Option credits over each two-year segment.
  • Nonexempt SEUs with 11 or more full-time employees and which are not located in “smaller markets” must earn at least four Menu Option credits over each two-year segment.

The SEU is deemed to be located in a “smaller market” for these purposes if the communities of license of the stations comprising the SEU are (1) in a county outside of all metropolitan areas, or (2) in a county located in a metropolitan area with a population of less than 250,000 persons.

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  • The Federal Trade Commission (FTC) and Federal Communications Commission (FCC) are partnering in “Operation Stop Scam Calls,” a multijurisdictional effort to stop illegal telemarketing calls.
  • Recent actions by the FCC expand robocall prevention efforts and step up enforcement of its rules.
  • Additionally, a Notice of Proposed Rulemaking seeks to clarify consumer consent requirements for receiving robocalls and text messages.

With an estimated four billion robocalls per month, it’s not surprising that unwanted and illegal robocalls are the FCC’s top consumer-protection priority, generating about 119,000 complaints in 2022 alone. Unwanted and illegal text messages—estimated at 225 billion in 2022—are increasingly prevalent and uniquely harmful to consumers by including legitimate-looking links designed to fool the recipient into providing personal and financial information. All of us experience on a daily basis the awkwardness of receiving a phone call or text message from an unknown telephone number and deciding whether to answer or reply. Unfortunately, some of these calls and texts are from bad actors and will result in fraud costing consumers billions of dollars.

Recent actions by the FCC are designed to decrease the number of unwanted and illegal phone calls and text messages that reach you. Below is a summary of recent developments in robocall and robotext regulation and open FCC proceedings that seek to eliminate harmful calls and texts. The FCC’s authority to regulate robocalls and robotexts stems from the Telephone Consumer Protection Act (TCPA), enacted in 1991, the Truth in Caller ID Act of 2009, enacted in 2010, and the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), enacted in 2019. The Federal Trade Commission (FTC), through its authority under the Federal Trade Commission Act and Telemarketing and Consumer Fraud and Abuse Prevention Act, also plays a role in robocall reduction and enforcement. The FTC administers the National Do Not Call Registry and has brought more than 150 enforcement actions for “Do Not Call,” robocall and spoofed caller ID violations. The FTC and FCC are partners in “Operation Stop Scam Calls”—a multi-agency, multi-jurisdictional effort by federal and state law enforcement entities to stop illegal telemarketing calls.

As part of its most recent robocall prevention efforts, the FCC has acted to, among other things:

  • Require intermediate voice service providers to authenticate calls that are not authenticated by originating voice service providers;
  • Require all voice service providers to take reasonable steps to mitigate illegal robocalls and file their mitigation plans in the Robocall Mitigation Database by a to-be-announced date ;
  • Give its Enforcement Bureau enhanced tools to penalize bad actors, including the ability to revoke section 214 and other authorizations, licenses and certifications of repeat offenders and expel providers that commit certain rule violations from the Robocall Mitigation Database on an expedited timeline;
  • Adopt a maximum $23,727 per-call penalty for failure to block illegal calls;
  • Established STIR/SHAKEN obligations of satellite providers (STIR/SHAKEN is a framework adopted by the FCC and implemented by voice service providers to authenticate an originating caller’s right to use the telephone number displayed on caller ID and is meant to protect against spoofed robocalls);
  • Expand to all voice service providers its requirements to respond to call traceback requests within 24 hours and block illegal traffic when notified by the FCC; and
  • Expand to all voice service providers the “know your upstream provider” requirement.

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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:

  • Foreign Ownership Violation by Telecommunications Provider Leads to $50,000 Penalty and Four-Year Compliance Plan
  • Arizona LPFM Station Hit with $20,000 Penalty and $41,500 Suspended Penalty for Underwriting Violations
  • Unauthorized Station Transfers Result in $8,000 Consent Decree

Telecommunications Provider to Pay $50,000 and Implement Four-Year Compliance Plan After Foreign Ownership Violations

A Guam-based telecommunications provider (Telecom Provider) settled an investigation by the Federal Communications Commission (FCC) into its ownership structure by entering into a consent decree that requires a $50,000 payment to the government and implementation of a 48-month compliance plan.  The Telecom Provider holds domestic and international Section 214 authorizations, 84 wireless licenses, three submarine cable licenses, and an earth station satellite license.  The FCC’s investigation concerned the Telecom Provider’s ownership, which includes two foreign corporations and a foreign government’s finance ministry.

Section 310(b)(4) of the Communications Act of 1934, as amended (Act), places a 25 percent limit on ownership by foreign individuals, corporations, and governments in U.S.-organized entities controlling common carrier licensees.  Under the Act, the FCC may permit higher levels of foreign ownership of an FCC licensee if it determines it is not contrary to the public interest.  Since 2013, FCC approval has also been required for any foreign individual or entity not previously approved by the FCC to acquire more than a five percent equity or voting interest in the entity.  These public interest determinations by the FCC incorporate input from a federal Executive Branch review of national security, law enforcement, foreign policy, and trade policy concerns conducted by a multi-agency group known as Team Telecom.

In 2015, the FCC granted an application that allowed the Telecom Provider to have 100 percent foreign ownership consisting of a parent entity two steps up in the ownership chain (Indirect Parent Entity) (owning up to 65.15 percent of the equity and voting interests) and the finance ministry (owning up to 26.95 percent of the equity interests and 41.53 percent of the voting interests).  Five years later, the Indirect Parent Entity commenced a tender offer for outstanding shares in the parent entity directly above the telecom provider (Direct Parent Entity).  Two months later, the Indirect Parent Entity acquired the tendered shares, which increased its indirect ownership interests in the Telecom Provider to 91.46 percent.  At the end of 2020, the Indirect Parent Entity also acquired all shares of the Direct Parent Entity’s common stock held by the remaining minority shareholders, resulting in it owning 100 percent of the equity and voting interests of the Telecom Provider.  These transactions led to the finance ministry having an indirect ownership interest in the Telecom Provider (held through Indirect Parent Entity) of 33.93 percent equity and voting.  The result was higher levels of foreign ownership in the Telecom Provider than had previously been approved by the FCC.

The Telecom Provider attempted to correct the problem by filing a Petition for Declaratory Ruling seeking approval for the Indirect Parent Entity and finance ministry to exceed their previously approved foreign ownership limits.  In late 2021, the International Bureau granted the Petition, but the FCC’s Enforcement Bureau pursued the prior foreign ownership violation, resulting in a Consent Decree with the Telecom Provider.

In addition to paying a $50,000 civil penalty for exceeding the foreign ownership levels approved by the FCC, the Telecom Provider must implement a plan to ensure compliance with the terms of the Consent Decree, including developing a compliance manual, administering employee compliance training, and submitting compliance reports to the Commission for four years regarding foreign ownership compliance.  During that time, the Telecom Provider must also report instances of noncompliance with the FCC’s foreign ownership rules and the terms of the Consent Decree within 15 days of discovering them.

Violations of Noncommercial Broadcast Underwriting Laws Result in $20,000 Penalty and a $41,500 Suspended Penalty for Low Power FM Station

The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Arizona LPFM station to resolve an investigation into violations of the FCC’s rules regarding underwriting.  Under the Consent Decree, the licensee agreed to implement a compliance plan and pay a $20,000 civil penalty, with a suspended civil penalty of $41,500 to be levied in the event of default. Continue reading →

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August 1 is the deadline for broadcast stations licensed to communities in California, Illinois, North Carolina, South Carolina, and Wisconsin to place their Annual EEO Public File Report in their Public Inspection File and post the report on their station website. 

Under the FCC’s EEO Rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal opportunity to all qualified persons and practice nondiscrimination in employment. Continue reading →

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Pillsbury’s communications lawyers have published the 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:

  • Sports Entertainment Company’s Malfunctioning Microphone Interferes with Public Safety Communications
  • Florida Radio Application Dismissed Over Disclosure Issues
  • Late Issues/Programs Lists and Children’s Television Programming Reports Causes $18,000 Proposed Fine for Maryland Television Station

Notice of Violation Issued After Malfunctioning Wireless Microphone Transmits on Wrong Frequency

A sports entertainment company with dozens of locations across the country received a Notice of Violation from the FCC for causing interference to a city’s licensed wireless operations. FCC field agents investigating interference complaints using direction finding techniques located “drifting” radio emissions in the area and determined that the source was a malfunctioning wireless microphone used by the sports entertainment company in its local operations.

The microphone was causing interference to the city’s 800 MHz communication system, and as noted by the Enforcement Bureau, the sports entertainment company did not hold a license to operate the microphone on that frequency. The city used the 800 MHz facilities for public safety operations, making the interference particularly concerning.

Under the Notice of Violation, the company must respond within twenty days and (1) fully explain each violation, including all relevant surrounding facts and circumstances, (2) include a statement of the specific action(s) taken to correct each violation and prevent recurrence, and (3) include a timeline for completion of any pending corrective action(s). The Notice of Violation also indicated the possibility of further enforcement action “to ensure compliance.”

Applicant Loses Chance at Noncommercial Radio Station After Failing to Make Required Disclosures

An applicant seeking to build a new noncommercial educational (NCE) station in Florida saw its application dismissed after a petition to deny raised disclosure issues with it. The company filed the application in November 2021 during the most recent filing window for new NCE applications. Applicants with applications deemed to be mutually exclusive (MX) are given an opportunity to work together to resolve technical conflicts through settlement arrangements. If the conflicts are not resolved, the FCC compares and analyzes the competing applications and tentatively selects a winning application.

The FCC’s comparative analysis of MX NCE applications generally consists of three main components. When NCE FM applicants in an MX group propose service to different communities, the FCC performs a threshold fair distribution analysis under Section 307(b) of the Communications Act of 1934 to determine if one of the applicants is proposing service to an underserved area. Application conflicts that are not resolved under this “fair distribution” analysis are next compared by the FCC under an NCE point system, which is a simplified, “paper hearing” process. If necessary, the FCC then makes a tie-breaker determination, based on applicant-provided data and certifications. Continue reading →

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This past Friday, the FCC released a Third Report and Order and Fourth Further Notice of Proposed Rulemaking (Multicast Licensing Order), setting forth rules regarding Next Gen multicast hosting arrangements and seeking further comment on ATSC 3.0-related patent issues.

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