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November 2013

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:

  • Multiple Indecency Complaints Result in $110,000 Payment
  • $42,000 in Fines for Excessive Power, Wrong Directional Patterns and Incomplete Public Inspection Files
  • Cable Operator Fined $25,000 for Children’s Programming Reports

Broadcaster Enters Into $110,000 Consent Decree Involving Allegations of Indecent Material

The FCC recently approved a consent decree involving a broadcaster with TV stations in California, Utah and Texas accused of airing indecent and profane content.

Section 73.3999 of the FCC’s Rules prohibits radio and television stations from broadcasting obscene material at all times and prohibits indecent material aired between 6:00 a.m. and 10:00 p.m.

The FCC received multiple complaints about the television show in question and sent Letters of Inquiry to the broadcaster asking it to provide a copy of the program and to answer questions about possible violations of the FCC’s indecency rule. The licensee complied with the requests but maintained that the program did not contain indecent content.

Earlier this month, the FCC entered into a consent decree with the broadcaster and agreed to terminate its investigation and dismiss the pending indecency complaints. Under the terms of the consent decree, the broadcaster is required to (a) designate a Compliance Officer within 30 days, and (b) create and implement a company-wide Compliance Plan within 60 days, which must include: (i) creating operating procedures to ensure compliance with the FCC’s restrictions on indecency, (ii) drafting a Compliance Manual, (iii) training employees about what constitutes indecent content, and (iv) reporting noncompliance to the FCC within 30 days of discovering any violations. The consent decree also requires the filing of a compliance report with the FCC in 90 days and annually thereafter for a period of 3 years. The requirements imposed under the consent decree expire after three years.

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A few minutes ago, the FCC released an Order extending the December 2, 2013 deadline for commercial broadcast stations to file their biennial ownership reports to December 20, 2013. The extension is meant to respond to the fact that the FCC took its website (including the Consolidated Database System used for preparing and filing reports and applications) offline during the October government shutdown. Because of this, broadcasters were prevented from preparing their voluminous ownership reports until the FCC reopened and the website was reactivated.

Since the biennial ownership report requires filers to provide their ownership information as it existed on October 1, 2013, broadcasters normally have sixty days after the October 1 reporting date to prepare and submit their reports. By extending the deadline to December 20, the FCC is seeking to maintain that sixty day preparation period.

Noncommercial broadcasters whose biennial ownership reports are due on December 2, 2013 (radio stations licensed to communities in Alabama, Connecticut, Georgia, Massachusetts, Maine, New Hampshire, Vermont, and Rhode Island and noncommercial television stations licensed to communities in Colorado, Minnesota, Montana, North Dakota, and South Dakota) should be aware that this extension does not apply to noncommercial ownership reports. Barring further action by the FCC, noncommercial stations in the listed states should continue to plan on filing their ownership reports by the current December 2, 2013 deadline.

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This morning, the FCC’s proposal to eliminate the UHF Discount was published in the Federal Register, establishing the comment and reply comment dates for that proceeding. Comments are due December 16, 2013, and reply comments are due January 13, 2014.

Under current law, no individual or entity is permitted to hold an interest in broadcast TV stations that, in the aggregate, reach more than 39 percent of U.S. television households. While this if often shorthanded as “no broadcast group can reach more than 39% of the population”, the rule is actually more restrictive than that. Since it applies not just to broadcast groups but to individuals, the rule prohibits an investor from holding 5% of the voting stock of two different TV groups if those otherwise unconnected groups’ stations together reach more than 39% of the population. Similarly, the rule would be violated if an individual served as a director for both companies.

Fortunately, the rule’s impact on broadcast investment has been lessened by the FCC’s UHF Discount, under which the FCC counts only half of the population in a station’s market towards the 39% cap if the station operates on a UHF channel (14-51) rather than on a VHF channel (2-13). Because most digital television stations operate on UHF channels, the practical effect has been to permit a group or individual to hold interests in TV stations located in markets representing more than 39% of the population (note, however, that the rule still counts every TV household in the market against the 39% cap, even where the station does not actually serve those households with an over-the-air signal).

The FCC’s Notice of Proposed Rulemaking (NPRM) proposes to eliminate the UHF Discount on the theory that while UHF stations had weaker coverage than VHF stations in an analog world, VHF frequencies are not well suited to digital transmissions, and it is now VHF stations that are suffering from poor coverage. That is accurate, but it would seem to be an argument for also creating a VHF Discount rather than eliminating the UHF Discount. While it is true that the FCC provided UHF stations with an opportunity to increase their operating power in transitioning to digital television if they could do so without creating interference to other stations, the guiding principal of making channel allotments in the DTV transition was replicating analog service areas, meaning that UHF analog stations were given digital allotments replicating their flawed analog coverage.

Oddly, however, the NPRM looks past that history, focusing instead on the fact that UHF stations and VHF stations are now much more equivalent because of VHF’s digital woes. While the 39% ownership cap, and how it is calculated, may well merit revisiting, the NPRM explicitly makes the decision to forego an examination of the 39% cap and how compliance with that cap should be calculated, and instead limits the FCC’s review to whether the UHF Discount should be eliminated.

In his dissent to the NPRM, FCC Commissioner Pai noted this fact, chiding the FCC for putting on its regulatory blinders while plunging ahead on the UHF Discount:

[B]ecause we are proposing to end the UHF discount, we should ask whether it is time to raise the 39 percent cap. Indeed, this step is long overdue notwithstanding any change to the UHF discount. The Commission has not formally addressed the appropriate level of the national audience cap since its 2002 Biennial Review Order, and it has been nearly a decade since the 39 percent cap was established. The media landscape has changed dramatically in the many years since. I’ve spoken a lot about the importance of reviewing our rules to keep pace with changes in technology and the marketplace, and I wish today’s item had done so with respect to this issue in a comprehensive manner.

Like the story of the blind men and the elephant, the FCC’s NPRM thrusts out its hand, touching only one aspect of the FCC’s ownership rules, and risks discovering later that there is much more to the elephant than its tail.

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Over the years, I’ve written a number of times of the FCC’s concern about airing emergency sounds, from the siren blare telling you that Indiana Wants Me, to Emergency Alert System tones promoting the movie Skyline, to an actual EAS alert warning of the Zombie Apocalypse.

Section 11.45 of the FCC’s Rules states that “[n]o person may transmit or cause to transmit the EAS codes or Attention Signal, or a recording or simulation thereof, in any circumstance other than in an actual National, State or Local Area emergency or authorized test of the EAS.” As a result, every time that annoying EAS digital squeal slips onto the airwaves during a commercial rather than in an EAS test, it is guaranteed that the employee charged with screening ads is going to have a very bad day.

Fortunately, most broadcasters and cable operators are well aware of the restriction and go to great lengths to screen out such content. Unfortunately, advertisers and ad agencies are often not so attuned, and given the sheer amount of ad content being aired, an EAS-laden ad will slip through sooner or later.

Aggravating the situation is that while airing the tone from the old Emergency Broadcast System could cause public confusion, the EAS squeal contains digital information that is relayed to other media entities, whose EAS equipment then reads that data and automatically transmits the alert on down the alert chain. The farther the alert travels from the original source (where observant viewers or listeners might have figured out it was just part of a commercial), the greater the likelihood of public confusion and panic.

While the FCC certainly takes EAS false alerts seriously, it has seemed to recognize that the media entity airing the ad is usually as much a victim of the false alert signal as anyone, and as long as prompt action was taken to prevent a recurrence, has not been particularly punitive in its enforcement actions. Its strongest reaction to false EAS alerts up till now has been to issue an Urgent Advisory after the Zombie Apocalypse telling EAS participants to change the default password on their EAS equipment to prevent hackers from commandeering the equipment over the Internet to send out false alerts.

That changed late today, when the FCC issued a News Release and an FCC Enforcement Advisory warning against “False, Fraudulent or Unauthorized Use of the Emergency Alert System Attention Signal and Codes”, along with a Notice of Apparent Liability (NAL) for $25,000 against Turner Broadcasting System, Inc. and a $39,000 consent decree against a Kentucky TV station.

According to the NAL, Turner aired a promo for the Conan show that contained a simulated EAS tone in connection with an appearance by comic actor Jack Black. The FCC was not amused. While the base fine for violating Section 11.45 is $8,000, the FCC found that the seriousness of the violation, particularly given the nationwide transmission of the false alert signal, as well as Turner’s ability to pay, justified increasing the proposed fine to $25,000. While not specifically addressed in the NAL, the fact that Turner produced the promo itself, rather than this being a case of a third party advertiser slipping it past Turner, appears to have drawn the FCC’s ire.

More interesting still is the $39,000 consent decree, where the Kentucky station did not contest that it aired an ad for a sports apparel store that “stops in the middle of the commercial and sounds the exact tone used for the Emergency Alert warnings.” Besides the eye-opening $39,000 payment, the consent decree requires extensive further efforts by the licensee, including implementing a Section 11.45 compliance program for its staff, creating and distributing a compliance manual to its staff, implementing a compliance training program, filing annual compliance reports for the next three years, reporting any future violations to the FCC, and developing and implementing a program to “educate members of the public about the EAS alerts, the limits of public warning capabilities, and appropriate responses to emergency warning messages.” With regard to this last requirement, the educational program must include:

  • Airing 160 public service announcements (80 on the station’s primary channel and 80 on its multicast channel).
  • Interviewing local emergency preparedness officials and including vignettes on emergency awareness topics at least twice a month on the station’s morning program.
  • Expanding the station’s website to include links to local emergency agencies, banner messages with emergency-related information, and video messages from the Federal Emergency Management Agency and local emergency preparedness agencies.
  • Installing an additional SkyCam at its tower site and using “special radio equipment” to communicate with local emergency management officials and which will relay alerts to the station’s master control personnel.
  • Leasing tower space to the local emergency management agency for a “new modernized communications system” linking local agencies and organizations.
  • Using social media and digital technologies to promptly disseminate emergency alerts, including posting information culled from the station’s public service announcements, vignettes, and the local emergency management agency on the station’s Facebook page weekly, and including timely late-breaking news coverage of severe weather conditions and forecasts on the station’s smartphone app.
  • Utilizing specific computer hardware and software to render weather data and maps for use on-air, online, and in mobile applications, as well as to track severe weather events.
  • Periodically reviewing and revising the station’s educational program to improve it and ensure it is current and complete, including conferring with the National Weather Service and state, county and federal emergency preparedness managers and public safety officials.

The consent decree does not indicate how many times the offending ad aired, or if the station produced it, but the severity of the consent decree terms is startling. Also noteworthy is the FCC Enforcement Advisory’s admonition that not just broadcast stations and multichannel video programming distributors are on the hook, but that “[t]he prohibition thus applies to programmers that distribute programming containing a prohibited sound regardless of whether or not they deliver the unlawful signal directly to consumers; it also applies to a person who transmits an unlawful signal even if that person did not create or produce the prohibited programming in the first instance.”

The FCC has therefore decided that it is time to crack down on violations, and ominously, today’s FCC Enforcement Advisory notes that “[o]ther investigations remain ongoing, and the Bureau will take further enforcement action if warranted.” Given today’s actions by the FCC, everyone whose job it is to review ad content before it airs is having a very bad day.

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Yesterday, the FCC released a Notice of Proposed Rule Making setting forth a number of potential changes to its technical rules governing AM radio designed to revitalize AM stations and enhance the quality of AM service.

In the past several years, the Commission has instituted several changes to its AM rules and policies in hopes of improving AM radio and reducing the regulatory burdens on AM broadcasters. Among these are:

  • 2005 and 2008 – Announced simplified AM licensing procedures for KinStar (2005) and Valcom (2008) low-profile and streamlined AM antennas, which provide additional siting flexibility for non-directional stations to locate in areas where local zoning approval for taller towers cannot be obtained;
  • 2006 – Adopted streamlined procedures for AM station community of license changes;
  • 2008 – Adopted moment method modeling as an alternative methodology to verify AM directional antenna performance, reducing the cost of AM proof of performance showings substantially;
  • 2009 – Authorized rebroadcasting of AM stations on FM translators, which has proven to be extremely successful, with over 10% of all AM stations now using FM translators to provide improved daytime and nighttime service to their communities of license;
  • 2011 – Authorized AM stations to use Modulation Dependent Carrier Level (“MDCL”) control technologies, which allow AM stations to cut energy costs through reduced electrical consumption on transmissions and related cooling functions;
  • 2011 – Announced an FM translator minor modification rule waiver policy and waiver standards to expand opportunities for AM stations to provide fill-in coverage with FM translators;
  • 2012 – Authorized all future FM translator stations licensed from Auction 83 to be used for AM station rebroadcasting;
  • 2012 – Granted first Experimental Authorization for all-digital AM operation; and
  • 2013 – Improved protection to AM stations from potential re-radiators and signal pattern disturbances by establishing a single protection scheme for tower construction and modification near AM tower arrays, and designating moment method modeling as the principal means of determining whether a nearby tower affects an AM radiation pattern.

Now, with the introduction of yesterday’s Notice of Proposed Rule Making, the FCC is considering yet more changes to its rules to help AM radio. Among the proposals in the Notice of Proposed Rule Making are:
(1) Open an FM translator filing window exclusively for AM licensees and permittees during which AM broadcasters may apply for a single FM translator station in the commercial FM band to be used solely to rebroadcast the AM station’s signal to provide fill-in and/or nighttime service. The window, as proposed, would have the following limitations:

  • Applications filed during this window must strictly comply with the existing restrictions on fill-in coverage governing AM use of FM translators (e.g., they must be located so that no part of the 60 dBu contour of the FM translator will extend beyond the smaller of a 25-mile radius from the AM station’s transmitter site, or the AM station’s daytime 2 mV/m contour; and
  • Any FM translator station authorized though this filing window will be permanently linked to the licensee or permittee of the primary AM station acquiring the authorization, and the FM translator authorization may not be assigned or transferred except in conjunction with that AM station.

(2) Modify the daytime community coverage standards for existing AM stations contained in Section 74.24(i) of the FCC’s Rules to require only that stations cover either 50% of the population or 50% of the area of the station’s community of license with a daytime 5 mV/m signal. This proposal would not affect applications for new AM stations, or proposals to change the community of license of an existing AM station, both of which will continue to require that 100% of the community of license receive at least a 5 mV/m signal during the day, and cover at least 80% of the community of license at night with a nighttime interference-free signal.

(3) Modify nighttime community coverage requirements for existing AM stations by (i) eliminating the nighttime coverage requirement for existing licensed AM stations, and (ii) in the case of new AM stations and AM stations seeking to change their community of license, modify the rules so the station would be required to cover either 50% of the population or 50% of the area of the community of license with a nighttime 5 mV/m signal or a nighttime interference-free contour, whichever value is higher.

(4) Delete the AM “Ratchet Rule,” which currently results in a reduction of nighttime signal coverage for AM stations relocating their licensed facilities.

(5) Permit wider implementation of Modulation Dependent Carrier Level control technologies by amending the FCC’s rules to allow AM stations to commence operation using MDCL control technologies without seeking prior FCC authority, provided that they notify the FCC of the MDCL operation using the Media Bureau’s Consolidated Database System within 10 days of commencing such operation.

(6) Modify AM antenna efficiency standards, and consider whether the minimum field strength values set forth in various technical rules could be reduced by approximately 25%.

While the changes under consideration are significant, AM broadcasters will have a fair amount of time to contemplate them before comments on the proposals are due at the FCC. The comment deadline will be 60 days after Federal Register publication of the Notice of Proposed Rule Making, with reply comments due 30 days after that.