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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 Fines FM Broadcaster an Extra $5,000 For Inaction
  • Inaccurate Tower Ownership Information Ends in $3,000 Fine

Failure to Heed an FCC Warning Regarding Public Inspection File Violations Results in $15,000 Fine
Following a routine inspection in April 2010, the Enforcement Bureau’s Pennsylvania Field Office issued a Letter of Inquiry (“LOI”) regarding the contents of a Pennsylvania FM station’s public inspection file. According to a recently released Notice of Apparent Liability (“NAL”), all of the station’s issues/programs lists for the current license term, a total of 15 quarters, were unaccounted for in the station’s public inspection file at the time of the inspection. Section 73.3526(e)(12) of the FCC’s Rules requires broadcasters to place in their public inspection file each quarter a list of programs that have provided the station’s most significant treatment of community issues. The base forfeiture for violations of Section 73.3526 is $10,000.

In its response to the LOI, the FM broadcaster admitted that the quarterly issues/programs lists were unavailable on the day of the inspection. The FM broadcaster indicated that it was evident “a person or persons had gone through the file and that some of the items had been removed” and was “committed” to bringing the station’s public inspection file into compliance.

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As I wrote in April, the FCC decided after much delay to ask the U.S. Supreme Court to review a pair of lower court rulings seriously challenging the FCC’s prohibition on indecent programming that airs before 10pm. Today the Supreme Court announced that it has agreed to hear the matter, setting up what could be the most important broadcast content case in decades.

The lower court decisions being challenged by the FCC involve the unintentional airing of isolated expletives on Fox during live awards programs, and an episode of NYPD Blue on ABC that showed a woman’s buttocks (the FCC-approved term for that part of the anatomy). That the underlying facts of these cases are so different (an accidental expletive on live TV versus scripted nudity in a dramatic program) increases the likelihood of a relatively broad indecency decision by the Court, as opposed to a narrow finding that the FCC was or wasn’t justified in pursuing a particular case based on the facts of that case.

The Court could ultimately support the government’s general right to police indecency while finding fault with the FCC’s current interpretation of how that should be done. However, the elephant in the room is whether it still makes sense for the government to assert that broadcasters have lesser First Amendment rights than all other media. The implications of the Court finding that broadcasters, a major source of news and information for most Americans, have First Amendment rights equivalent to newspapers would create regulatory ripples far beyond indecency policy. For that reason, the Court will likely think long and hard before making such a sweeping pronouncement.

Still, it is increasingly true that most audiences in the U.S. have ceased to draw a distinction between, for example, broadcast channels and cable/satellite channels. As they flip through the growing number of programming channels on their flat screen TVs, or increasingly watch Internet content over those same TVs, the government’s case for regulating the content of a small number of those channels grows more tenuous. The Supreme Court will now tell us whether it has grown too tenuous to continue.

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By Glenn S. Richards and Christine A. Reilly

In a series of actions within the last five days, the FCC has focused its enforcement attention on cramming — the unauthorized placement of fees onto a consumer’s monthly phone bill by its own phone provider or an unaffiliated third party. These charges could be for telecommunications products and services but could also be for cosmetics or diet products. At an event in Washington, DC on June 20th, FCC Chairman Julius Genachowski announced the launch of a major new effort to educate consumers about cramming and plans for a proceeding that will empower consumers to better protect themselves from cramming. The FCC estimates that up to 20 million Americans may be victims of cramming each year.

In a series of Notices of Apparent Liability (NAL) released last week, the FCC issued fines between $1.5 and $4.2 million against four telephone service providers for cramming. These charges usually range from $1.99 to $19.99 per month and may go undetected for months. To reinforce its concerns about cramming, the FCC also released an Enforcement Advisory stating that “it has acted on four major investigations involving cramming” which it said is an “unjust and unreasonable” practice under Section 201(b) of the Communications Act. The Advisory also stated that the telecom providers “had apparently engaged in constructive fraudulent activity as part of a plan to place charges on consumers’ phone bills for services that the consumers neither requested nor authorized.”

According to a News Release issued last week, the four telecom providers, all headquartered in Pennsylvania, defrauded consumers by billing them for unauthorized dial-around services (a form of long distance service that allows a customer to use a different carrier than the one presubscribed to the telephone number). According to the News Release, 99.9% of the billing charges levied by the alleged violators were bogus. In one NAL, the FCC stated that one of the telecom providers billed “as many as 18,571 consumers monthly, during which time no more than 22 consumers (or 0.1 percent) ever actually used its service.”

According to the NALs, all four telecom providers employed identical Internet-only solicitation and online enrollment for services utilizing the same billing aggregator. The telecom providers practiced the same method of customer verification, which did not include sending “reply required” confirmation e-mails. When consumers later challenged the monthly charges, the telecom provider stated that as part of its customer verification process, it merely confirmed that the consumer’s name and/or address contained on the online enrollment form matched the telephone number provided on the online enrollment form, or confirmed that the IP address provided on the online enrollment form was within a 100 mile radius of the name, address and telephone number included in the online registration.
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As I wrote back in February, the federal government has decided to conduct the first-ever national test of the Emergency Alert System. Today, FEMA and the FCC announced that the test will occur on November 9, 2011, at 2pm Eastern Standard Time. On that date, the public will hear a message indicating “This is a test,” but FEMA and the FCC indicate that the entire test could last up to three and a half minutes.

Because the test is a presidential EAS test, it must be retransmitted by radio and television broadcasters, cable operators, satellite radio service providers, direct broadcast satellite service providers, and wireline video service providers. In the announcement, FEMA took pains to note that the test will not simply be a pass/fail exercise, but an opportunity to find out what is working and what isn’t, so that the system can be tweaked and improved.

It is likely that the national EAS test will become an annual event following this initial test. One issue that was not discussed in the announcement, however, is how the current September 30, 2011 deadline for EAS participants to install EAS equipment compatible with the Common Alerting Protocol (CAP) could affect the test. The FCC had originally said that the intent of a national test was to assess the existing EAS operation, as opposed to testing the implementation and functionality of the new CAP-compliant EAS equipment soon to being purchased and installed by broadcast, cable, and satellite operators.

As the FCC just last week announced the commencement of a rulemaking to adopt rules and processes for the implementation of CAP, there is a growing feeling that the September 30, 2011 CAP implementation deadline may need to be extended in order to prevent a situation where EAS participants are required to immediately purchase and install new EAS equipment that may or may not comply with the CAP requirements ultimately adopted by the FCC. Whether intended or not, a national EAS test just six weeks after the CAP deadline will likely end up being more about the teething pains of CAP implementation than about how reliably the current EAS infrastructure functions.

As a result, preventing the national test from being sidelined by the inevitable implementation glitches of CAP may be the strongest reason yet for extending the CAP implementation deadline to a date beyond November 9, 2011. It will be good to know how the never-before-tested national EAS infrastructure functions before adding the additional complexities of CAP-compliant EAS equipment to it.

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Last week, the FCC released its long-awaited Third Further Notice of Proposed Rulemaking, the goal of which is to modify Part 11 of the FCC’s Rules in order to allow for Common Alerting Protocol (CAP) delivery of the “next generation” Emergency Alert System (EAS). A copy of the NPRM can be found here.

EAS Participants (e.g., radio and television stations, wired and wireless cable television systems, DBS and SDARS services) have been anxiously waiting for the FCC to release this NRPM since at least the end of last year. The primary reason for this, as we previously reported here and here, is that CAP-compliant EAS encoders/decoders must be purchased, installed and operational by September 30 of this year. The hope of EAS Participants has been that this proceeding will provide them with much needed guidance to make informed decisions regarding what equipment they should obtain and install to ensure compliance with CAP and the revised Part 11 rules. The NPRM also gives EAS Participants the opportunity to comment on the proposed rules and to provide input regarding how CAP and next generation EAS will impact their operations going forward.

The NPRM is a lengthy 203 paragraphs (with an additional 18 pages of proposed new rules) and it asks for public comment on many items related to revising and streamlining the FCC’s Part 11 rules and how the FCC should codify the requirements for processing emergency alerts using CAP. A few of the NPRM’s highlights are summarized below.

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