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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:

Headlines:

  • FCC Fines Kentucky Men $144,344 for Illegally Operating LPTV Station for 18 Years
  • North Carolina Radio Station Settles With FCC Over Decades of Unauthorized Transfers
  • Connecticut Radio Station Warned for Inspection and Antenna Violations

Pay Up: FCC Fines Two Kentucky Men for Illegally Operating LPTV Station for 18 Years

The FCC issued a Forfeiture Order imposing a $144,344 penalty against the operators of a Kentucky unlicensed low-power television (“LPTV”) station.  The station had been operating without FCC authorization since 1998.  The Communications Act prohibits the operation of a broadcast station without FCC authorization.  As we reported in 2017, the FCC previously adopted a Notice of Apparent Liability (“NAL”) against the individuals.  This Forfeiture Order affirms the NAL.

The first individual (“Individual 1”) initially applied for and was granted the LPTV license in 1990, as well as a subsequent renewal term that ran from July 1993 through August 1998.  By the time that term expired, however, the individual licensee had failed to file a license renewal application or seek special temporary authorization to operate the station, and by August 1998, the station was operating without any FCC authorization.  In 2004, the FCC’s Media Bureau sent a letter to the individual asking whether he had filed a license renewal application.  Receiving no response, the Media Bureau sent a letter notifying the licensee that the station’s license had been cancelled.

Fast forward eight years, to 2016, when the Media Bureau learned that the station might still be operating.  The matter was referred to the Enforcement Bureau, which confirmed that the station was still on the air.  During the investigation, Enforcement Bureau field agents interviewed Individual 1 as well as a second individual who identified himself as the station’s studio manager and operations manager (“Individual 2”).  During their meeting with Individual 2 at the station, the agents issued a Notice of Unlicensed Radio Operation (“NOUO”) demanding the station cease operations and warning of possible further enforcement action.  In Individual 2’s response to the NOUO, he argued that the station was actually still licensed and referred to the NOUO as only a “request” to shut down.

Field agents returned a few months later to find the station still operating.  The Enforcement Bureau subsequently issued the NAL.

Both men responded individually to the NAL.  Individual 1 claimed, among other things, that the license should still be in effect because he filed a license renewal application in 2004 and included $1,155 to cover license renewal fees for three of his stations through 2022.  He further claimed that the station should remain on air because of the benefits it provides to local residents.  At the same time, however, Individual 1 also claimed to have “never operated a TV station” in the area and had not visited the station in over 15 years.  Finally, Individual 1 sought a reduction in the proposed penalty due to an inability to pay.

The FCC outright rejected all of Individual 1’s claims.  Regarding the late license renewal application, besides filing the application six year late, the filing would only have covered the preceding license term.  Further, the Media Bureau could not have accepted the application because while the funds could have covered the stations’ accumulated annual regulatory fees, Individual 1 did not include application processing fees, without which the Media Bureau cannot review an application.

In response to the claims about benefiting the local community, the FCC stated that any alleged benefit from operations “does not absolve [the operator] from liability.”  The FCC also rejected Individual 1’s claim that he never operated the station, noting that the claim conflicted with the evidence, which included filings and statements made by both individuals to the contrary.

Individual 2’s response to the NAL similarly did not gain much traction with the FCC, despite a few novel theories.  In his response, Individual 2 claimed that the FCC lacks jurisdiction over the station because its signal was not intended to reach beyond the state of Kentucky.  Further, Individual 2 included a petition signed by over 100 local residents urging the FCC to allow the station to continue operating.  Individual 2 also claimed that he lacked the financial resources to pay the penalty.

The FCC rejected Individual 2’s federalism argument as contradicting the plain language of the Communications Act, which prohibits making unauthorized intrastate or interstate transmissions.  Further, the Commission gave no weight to the station’s “community support,” as it had no bearing on the unlicensed operation of a broadcast station.

The FCC also declined to reduce the penalty amount for either party, who it found jointly and individually liable.  Beyond a lack of evidence of inability to pay, the FCC determined that the severity of the violation warranted the penalty, which was calculated by multiplying the $10,000 per day base penalty amount by 22 days of unauthorized operations.  In fact, the Forfeiture Order states that the only reason the penalty was not greater is because $144,344 is the statutory maximum permitted under the Communications Act for a continuing violation.  The FCC also reminded the parties that an ability to pay is only one consideration in adjusting a penalty amount.  Here, the violation lasted over 18 years, and the parties were notified or directly warned at several points over that period about the consequences of operating without a license.

History of an Error: North Carolina Licensee Settles with FCC Over Decades of Unauthorized Transfers and Missing Ownership Reports

The Media Bureau entered into a Consent Decree with the licensee of a North Carolina AM radio station and FM translator station for violating the FCC’s rules governing transfers of control and the filing of ownership reports.

Section 310 of the Communications Act and Section 73.3540 of the FCC’s Rules prohibit the transfer of control of broadcast licenses from one individual, entity, or group to another without prior FCC approval.  In the case of full-power broadcast stations, parties must file FCC Form 315 applications and receive FCC consent before a transfer of control can be consummated.

The transfer of control applications ultimately leading to the Consent Decree were filed with the FCC in April 2018, but the licensee’s problems began over thirty years earlier, shortly after the FCC approved an assignment of the AM station’s license.  The FCC believes that, in 1986, the licensee had five attributable shareholders (the FCC states in a footnote that it is unable to locate the licensee’s original assignment application).  However, over the next few years, over 50% of the licensee’s stock changed hands without FCC consent.  Again, in 1992, more than 50% of the licensee’s stock was transferred without consent, and new directors were appointed to control the licensee.  In 1994, another unauthorized transfer transpired when a minority shareholder acquired a 66% interest in the licensee without prior Commission approval. Continue reading →

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At its February 14th meeting, the FCC gave a rather significant Valentine’s Day gift to broadcasters, eliminating the requirement that larger radio and television stations submit the EEO Mid-Term Report (FCC Form 397) at the midpoint of their license terms.  While the FCC will continue to conduct EEO mid-term reviews, it determined that filing the EEO Mid-Term Report was no longer necessary, as most of the information required for an EEO mid-term review is already available in a broadcaster’s Online Public Inspection File.

Specifically, the EEO Mid-Term Report required broadcasters to provide three pieces of information: (i) the number of full-time employees; (ii) the point of contact for the station(s) that is responsible for compliance with the EEO rules; and (iii) the two most recent Annual EEO Public File reports.  In eliminating the obligation to file the EEO Mid-Term Report, the FCC reasoned that the point of contact information and the Annual EEO Public File reports are already kept in a broadcaster’s Online Public Inspection File.  As such, the additional requirement of filing an EEO Mid-Term Report with the FCC was unnecessary.

To gather the third piece of information requested in the EEO Mid-Term Report—the current number of full-time employees—the FCC will require that radio station employment groups indicate when uploading their Annual EEO Public File Reports whether or not they have 11 or more full-time employees (the number which triggers the need for an EEO mid-term review in radio).  Because TV licensees are subjected to EEO mid-term reviews when the station employment group only has five or more full time employees—the same number that triggers the requirement to file Annual EEO Public File Reports—the FCC deemed such a requirement for TV licensees unnecessary (i.e., if a TV station is filing Annual EEO Public File Reports, the FCC already knows the station employment group is large enough to qualify for an EEO mid-term review).

The change in rules will be effective on May 1, 2019.  The FCC noted that television stations in Delaware and Pennsylvania will therefore still be required to file their EEO Mid-Term Reports on April 1, 2019.

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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:

Headlines:

  • Alabama FM Licensee Admits to On-Air Contest and Unauthorized Transfer of Control Violations
  • Silicon Valley Start-Up Agrees to Pay $900,000 Penalty for Unauthorized Satellite Launches
  • Michigan AM Licensee Faces Proposed $18,000 Fine and Reduced License Term for a Variety of Violations

No-Win Situation: FM Licensee Settles with FCC Over On-Air Contest and Unauthorized Transfer of Control Violations

The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Alabama FM radio station for violating the FCC’s rules governing on-air contests and transfers of control.

The FCC regulates licensee-conducted contests in order to protect the public against deceptive and misleading practices.  Section 508 of the Communications Act (“Act”) prohibits a licensee from knowingly deceiving the public by manipulating or predetermining the results of a contest.  Section 73.1216(a) of the FCC’s Rules requires a licensee to “fully and accurately disclose the material terms of the contest” and the contest must be conducted in accordance with those announced terms.

Section 310 of the Act and Section 73.3540 of the FCC’s Rules prohibit the transfer of control of a broadcast license without prior FCC approval.  A de facto transfer occurs when a licensee no longer retains ultimate control over vital aspects of a station’s operations, including its programming, personnel, and finances.

In August 2016, the FCC received a complaint alleging that the licensee “prematurely ended” an on-air contest and failed to award the advertised prizes. According to the complaint, the station instead kept the prizes and provided them to its own employee.

The Enforcement Bureau responded nearly a year later by issuing a Letter of Inquiry (“LOI”) to the licensee seeking information about the contest. In its response, the licensee denied any knowledge of the contest nor was it was able to find any records related to the contest.  According to the Consent Decree, the licensee’s professed lack of knowledge about the contest “raised questions about the Licensee’s control over the Station.”  As a result, in July 2018, the Enforcement Bureau issued a supplemental LOI to the licensee investigating the apparent de facto unauthorized transfer of control to the third party that conducted the contest, who had a time brokerage agreement with the station.  According to the FCC, it had not approved, nor had the licensee applied for, a transfer of control of the license.

To resolve the FCC’s investigation, the licensee entered into a Consent Decree with the Enforcement Bureau.  Under the terms of the Consent Decree, the licensee agreed to (1) admit liability for violations of the FCC’s contest and unauthorized transfer of control rules; (2) pay a $12,000 civil penalty; and (3) develop and implement a compliance plan to prevent further violations of the FCC’s Rules.

Space Oddity: Start-Up Agrees to Pay $900,000 to Settle Investigation into Unauthorized Satellite Operations

After a bizarre string of events involving unauthorized communications satellites, space launches from India, and experimental weather balloons over California, the FCC entered into a Consent Decree with a Silicon Valley satellite start-up.

Section 301 of the Act and Section 25.102 of the FCC’s Rules prohibit the operation of any device for the transmission of energy, communications, or signals by space or earth stations unless in accordance with an FCC authorization.  Section 25.113 of the FCC’s Rules requires FCC authorization before deployment and operation of a space satellite. Continue reading →

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Late today, the FCC released a Public Notice further extending the deadlines for filings that it extended yesterday, which it had already extended by a Public Notice released before the FCC shutdown on January 3 (did you follow that?).  Skipping over those intermediate steps, the final result now boils down to this general rule:  filings that were due between January 3 and January 7 will still be due tomorrow, January 30.  However, filings that otherwise would have been due between January 8 and February 7 are now due by February 8.

HOWEVER, the FCC has established additional deadlines for specific proceedings and classes of proceedings, including:

  • Online Public Inspection File – As an update to our post yesterday,  all public inspection quarterly submissions that were due on January 10, as well as any other filings that were required to be placed in a station’s Online Public Inspection File between January 3 and January 28, are now due by February 11.  Apparently in response to the demo online public file snafu we brought to light a few weeks ago, the FCC cryptically added that any online public file uploads that were made during the shutdown “will need to be resubmitted to the proper Online Public Inspection File site at https://publicfiles.fcc.gov.”
  • EEO Reports – Broadcasters in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma must still place their annual EEO Public File Reports in the Online Public Inspection File by the original due date of February 1.  Because the annual EEO Public File Report is not an FCC “filing” (qualifying for the general filing extension) nor a quarterly report (qualifying for the first type of Public File extension), nor was it required to be placed in the public file by January 28 (qualifying for the second type of Public File extension), it does not fall into any of the further deadline extension categories.  On the other hand, the EEO Mid-Term Report on FCC Form 397 is an FCC filing, and therefore broadcasters in New Jersey and New York will have until February 8 to file it under the general deadline extension described above.
  • ULS Filings – All ULS applications and notifications that were due to be filed between January 3 and February 8 are now due by February 8.  This does not apply to filings related to the incentive auction, which were permitted to be filed during the FCC shutdown and therefore are unaffected by the various deadline extensions.  All ULS filings that were submitted between the commencement of the shutdown and today will be considered received as of today, January 29.

While too voluminous to list here, readers should also be aware that the Public Notice sets additional new deadlines for informal consumer complaints, responsive pleadings, comments in the Carriage Election Notice Modernization proceeding, STA requests, fee filings, and filings in the Tower Construction Notification System and the Antenna Structure Registration System, among other things.  Those potentially affected should review the Public Notice carefully to determine what new deadlines may apply.  In addition, the Public Notice indicates that the FCC will also “consider requests for further extensions in individual matters as appropriate.”  So even now, we may not be done extending the extensions.

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With the partial government shutdown mercifully at an end (for now), broadcasters must hurry to update their Online Public Inspection File and make up for a month’s worth of missed filings.

As we wrote earlier this month, filing deadlines that landed during the shutdown were extended (with a few exceptions) via a January 2 FCC Public Notice. The new deadline was to have been the second day of normal FCC operations (which would have made those filings due tomorrow, Tuesday, January 29).  However, in a Public Notice released a few minutes ago, the FCC extended that deadline an additional day, meaning that FCC filings whose due dates fell from January 3 to January 29 are now due by Wednesday, January 30, 2019.  All public file documents that could not be uploaded to the Online Public Inspection File while it was unavailable during the shutdown should be uploaded as soon as possible, and certainly no later than the January 30 extended deadline for FCC filings.

Backlogged uploads and filings include:  fourth quarter children’s television programming reports on Form 398 (if not already filed in LMS), fourth quarter commercial limits certifications, fourth quarter issues/programs lists, Class A TV continuing eligibility certifications, and NCE fundraising reports.

Because the government is funded for at least the next three weeks, broadcasters in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma will be able (and expected!) to timely upload their annual EEO public file reports in the Online Public Inspection File by Friday, February 1See our recent advisory for more information on this obligation.

Broadcasters should also take stock of any other filings that, but for the shutdown, would have been due earlier this month (e.g., Special Temporary Authority requests and extensions).  As noted in an earlier post, the shutdown did not affect the post-incentive auction broadcast repack, and any filings related to the repack should have been filed as scheduled.

Open Meeting “Lite”

On a related note, now that the FCC is open for business again, the January 30 Open Meeting will take place in person instead of via teleconference.  Of course, most of the staff that normally prepare the agenda items and assist the commissioners are just now getting back to work after having been furloughed for several weeks.  The show must go on, given the FCC’s statutory obligation to hold a meeting at least once a calendar month, but instead of reviewing the items announced on the Tentative Agenda, the FCC will use this meeting to go over what it calls “Commission announcements.”

The decision to delay votes on matters originally on the FCC’s meeting agenda for January affects two items of interest to broadcasters.  First, broadcasters are going to have to wait even longer before they can cease thinking about the now-redundant EEO Mid-Term Report on Form 397.  The FCC was prepared to vote on a Report and Order that would have eliminated this reporting requirement.  The impact of the delay will be fairly limited, however.  According to an advance draft of the Report and Order, the substantive changes would not have gone into effect until May 1, 2019.  Given that the last round of EEO Mid-Term Reports for this license renewal cycle are due on April 1, 2019, and the cycle does not resume until 2023, the delay in voting on the item will have no practical impact on stations unless the delay drags on for years.

Also originally up for a vote at the January meeting was a Notice of Proposed Rulemaking seeking several changes in the way the FCC currently processes competing (also known as “mutually exclusive”) license applications for noncommercial educational (“NCE”) FM and television stations and low power FM (“LPFM”) stations.  In this proceeding, the FCC is seeking to improve its review process by eliminating certain requirements for NCE applicants, amending its rules governing the “holding period” during which licensees must maintain certain station characteristics, and generally updating rules that are deemed confusing or unnecessarily time-consuming.  With this item now off the January meeting agenda, action on it will also have to wait, likely until the February Open Meeting (assuming the federal government remains open through then).

Until then, broadcasters should work on meeting their accrued regulatory obligations that couldn’t be fulfilled during the shutdown, and might do well to expedite any planned future filings.  You never know when the next FCC shutdown will occur.

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One of the intriguing aspects of posting on CommLawCenter is the level of interest a particular post generates.  Posts announcing something of vital importance to broadcasters will sometimes make hardly a ripple, while more mundane posts attract surprising interest.

Indeed, one of CommLawCenter’s most-read posts in its early years was a discussion of the first national EAS test.  It wasn’t that non-broadcasters had suddenly become infatuated with EAS; it was because the first national EAS test happened to coincide with a near-miss between Earth and what was described as a “huge asteroid”.  There apparently was a sizable contingent of conspiracy theorists who thought that a national EAS test being held at the same time as the asteroid’s arrival indicated a government cover-up of the asteroid’s imminent collision with Earth.  I never understood the logic of that claim, but a four-month-old post on CommLawCenter announcing the national EAS test date suddenly became red hot in web readership until the asteroid peacefully passed by Earth.

So it was when we recently reported that shortly after the FCC shut down, some stations were getting calls claiming to be on behalf of the FCC and asking for payment of “FCC fees”.  When stations pressed for more information, the callers became belligerent or hung up.  In response, we alerted stations to be wary of such calls and to be especially leery of any caller that requested payment by gift card, which is the most common form of payment demanded by scammers (because they can’t be traced).

That brief alert received a lot of trade press coverage afterwards, and I certainly hope it saved a few stations some headaches.  We subsequently sought more information to see if there was anything that could be learned about the calls (were they all actually scams, were there multiple approaches, or just one unified effort?).  Unfortunately, there wasn’t much more information available, as it seemed most stations had just hung up and moved on with their lives.  However, we did get an interesting tidbit from one station—the callback number the caller had left on voicemail.  While that may seem odd, it’s common for phone scammers to leave a toll-free number behind so that those called can run out, obtain the necessary gift cards to make payment, and have a number they can call back to relay the gift card payment information to the scammer.

This particular number didn’t generate any useful information from a web search, but the way this particular call had been described seemed more formal and organized than you would expect the typical scam call to be (although the caller apparently still became belligerent when pressed).  As noted in the original post, the FCC (particularly when shut down) doesn’t make collection calls itself, but it does typically send a written “Past Due Notice” to licensees when a debt has stayed unpaid for 30 days.

I checked my files for a Past Due Notice a client received a few years ago, and sure enough, at the very bottom of the Notice was the phone number the station had provided.  Now we were getting somewhere.  As it turns out, despite being on a piece of FCC correspondence, it was not an FCC telephone number, but one associated with the Department of Treasury.  While the FCC does refer past due amounts to Treasury for collection (a questionable practice given that when you want to sell your station or renew its license, the FCC already has all the leverage it needs to get paid), the Treasury Department shut down long before the FCC.  Since the FCC doesn’t make collection calls, and both the FCC and Treasury were closed when this particular call was made, who was doing the calling?

Making the circumstances even more curious is the fact that the FCC actually pays Treasury to handle the collection of overdue FCC accounts.  If the FCC and Treasury are both shut down because they have no appropriated funds to operate, then the obvious question is: Who is paying a Treasury employee to do FCC collections if neither agency has funding to operate in the first place?

So I called the number to ask.  A very pleasant person (not belligerent at all, at least to me) answered the phone and indicated that she wasn’t sure exactly how the contract between the FCC and Treasury worked, but that money was apparently available for their continued operations, as they had not been informed they were at risk of being furloughed anytime soon.  She also said that any of the calls to stations in which the caller hung up when pressed would not have come from Treasury, as they are used to people thinking they are a scam caller and therefore work hard to persuade people that the call is a legitimate one.

I told her that with the FCC shut down, stations couldn’t access the FCC’s Fee Filer or Red Light systems to determine the validity of any claimed debt, so there were some serious concerns about which callers were scammers and which might be legitimate outreach from Treasury.  She responded that they were was unaware the FCC had taken the Fee Filer and Red Light systems down, and appreciated knowing that.  She added that she certainly understood why a broadcaster might be skeptical of a call given the shutdown and the inability to verify the existence of a debt until the FCC reopens.  I suggested Treasury might want to focus its collection efforts on other types of debts until the FCC reopens, but in any event, that Treasury should be aware that their calls might be viewed with more than the typical amount of skepticism until the government reopens.

As we finished the conversation, she confirmed that Treasury only takes traditional forms of payment, so again, if a caller asks to be paid in gift cards, the call is a scam.

But what if the call successfully passes that first test?  How do you tell if the call is legitimate, and equally important, whether you actually owe the amount claimed?  Under normal circumstances, the first thing you should do is log into the FCC’s Fee Filer and Red Light systems to determine whether any debt is outstanding and the amount of it (if there are amounts due, you’ll be able to pull up a “Remittance Advice – Bills for Collection (Form 159B) for the amounts owed).  Since those systems are currently unavailable during the shutdown, if you aren’t aware of any outstanding payment due, you may want to wait until the FCC reopens and the debt can be confirmed before sending any payment.

Alternatively, if you get a call from someone claiming to be with the Department of Treasury, ask them to send you their copy of your Form(s) 159B, which is also used by Treasury as the basis for their collection process.  Once you are satisfied that you owe the debt (and interest), they will walk you through the payment options (again, no gift cards).  If you believe the debt claim to be an error, you can challenge it, but be aware that if you earlier received a Past Due Notice from the FCC and did not challenge it within 30 days of the date on the Notice, the government may take the position that you waived your right to challenge it.

So if you get a suspicious call claiming you owe FCC fees, whether you think it is a scam or not, it’s wise to check the FCC’s Fee Filer to make sure you are all paid up.  If not, the call might be legitimate, particularly if the amount the caller is saying you owe is similar to the amount the Fee Filer is indicating.  Note that the amounts may not be identical, as the Fee Filer indicates the initial amount owed plus any payment penalty (for example, missing a regulatory fee payment results in an immediate 25% penalty), but may not include all accrued interest, which Treasury will also insist on collecting.

But what happens if you still don’t pay?  Well, you will continue to have “Red Light” status at the FCC, which means the FCC will place a hold on processing your applications.  You won’t be able to sell your station, get its license renewed, etc., until the Red Light status is removed.  Also, once the FCC refers the debt to the Department of Treasury, if Treasury fails to collect it within a certain period of time, it will actually hand the bill to private debt collection agencies for collection.  Those entities are renowned for their skill at harassing debtors (sometimes legally, sometimes not) into paying.  If you have the misfortune to reach that state of affairs, you’ll dream of the days when you were only getting calls from scammers.

 

 

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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.

*A Note About the Government Shutdown

Due to the ongoing partial government shutdown, the online Public Inspection File database is not currently accessible.  As a result, the filing date for stations required to file their Annual EEO Public File Report has been extended until after the Commission reopens.  However, the Commission still requires stations to “maintain” these documents until they can be uploaded.  As we discussed in a recent CommlawCenter article, stations should therefore proceed as usual in the timely creation of these materials and upload them once the Public Inspection File database becomes available.  

Stations that are required to upload an EEO Mid-Term Report can still do so if they choose.  This is because the FCC has left the LMS filing system operating for incentive auction-related filings (which are excluded from the shutdown).  However, the Commission has made clear that, other than auction filings and those necessary for the protection of life and property, filings at the FCC during shutdown “will not be reviewed or processed and will be considered accepted on the day following the day of return to normal operations.”

February 1, 2019 is the deadline for broadcast stations licensed to communities in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma to place their Annual EEO Public File Report in their Public Inspection File and post the report on their station website.  In addition, certain of these stations, as detailed below, must also electronically file an EEO Mid-Term Report on FCC Form 397 by February 1.

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, (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.  Nonexempt SEUs must submit to the FCC the two most recent Annual EEO Public File Reports when they file their license renewal applications.

In addition, all TV station SEUs with five or more full-time employees and all radio station SEUs with 11 or more full-time employees must submit to the FCC the two most recent Annual EEO Public File Reports at the mid-point of their eight-year license term along with FCC Form 397—the Broadcast Mid-Term EEO Report.

Exempt SEUs—those with fewer than five full-time employees—do not have to prepare or file Annual or Mid-Term EEO Reports.

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.  This publication is available at: http://www.pillsburylaw.com/publications/broadcasters-guide-to-fcc-equal-employment-opportunity-rules-policies.

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

Consistent with the above, February 1, 2019 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 the station records file.

These Reports will cover the period from February 1, 2018 through January 31, 2019.  However, Nonexempt SEUs may “cut off” the reporting period up to ten days before January 31, so long as they begin the next annual reporting period on the day after the cut-off day used in the immediately preceding Report.  For example, if the Nonexempt SEU uses the period February 1, 2018 through January 21, 2019 for this year’s report (cutting it off up to ten days prior to January 31, 2019), then next year, the Nonexempt SEU must use a period beginning January 22, 2019 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. Continue reading →

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Sometimes it seems the world really is out to get you.

Being in a highly regulated business, broadcasters are quite dedicated to meeting regulatory obligations.  More specifically, being subject to fines (or worse) for every shortcoming makes the average broadcaster not just diligent, but justifiably paranoid in ensuring that every regulatory requirement has been met and checked off the list.  Events like government shutdowns therefore give broadcasters particular angst as they throw the normal processes and routines for compliance into disarray.

We discussed this in a post last week, which parsed obligations that must be met even while the FCC is closed from those for which a broadcaster has no option but to wait until the FCC reopens.  As detailed in that post, the distinction is not always a commonsense one.  For example, we noted that stations must still prepare various quarterly reports for placement in the Public Inspection File by January 10th, but that those reports cannot actually be uploaded to the online Public File until the FCC reopens, as the FCC took its Public Inspection File database offline when it closed on January 3rd, making it impossible for stations to upload those reports.

I therefore listened with interest when a broadcaster indicated last night that after four days of being dark, the FCC’s online Public Inspection File database was suddenly working again.  That seemed unlikely, and sure enough, when I tried to access the database, I was redirected to a page announcing the FCC’s closure during the federal shutdown.  When I noted this, the broadcaster responded that not only was he successfully uploading his Public File documents, but that the “ticker” on the FCC’s website listing recent Public File uploads indicated stations from all over the country were uploading reports at a frantic pace.

I asked for the link he was using, and it took me to what appeared to be the opening page of the FCC’s shuttered online Public File database, including the familiar “Sign in” link and recent uploads ticker on the right side of the screen.  I could successfully sign in on behalf of clients, and on my first visit, the ticker indicated that eight different stations had filed more than a dozen documents in just the past six minutes.  Each time I went back to the page, the ticker had updated, listing more recent uploads by a totally different batch of stations.  Since the ticker only shows the most recent dozen or so uploads, it was impossible to know how many stations had recently uploaded documents to the site, but I counted more than 50 different radio and TV call signs in an hour.

The website looked like the online Public File database in every respect.  It included Public Files for, as best as I could tell, every station in the country that has a Public File, and most convincingly of all, listed all of the uploaded Public File documents for each and every station.  In other words, it did indeed look like the FCC had restored access to the Public File database or that stations had found a backdoor way into it.

Upon closer inspection, however, it took on the appearance of a movie set—all facades without anything behind them.  It listed the various documents in a station’s Public File, including the time of uploading and the precise file size, but clicking on those documents revealed only dead links.  Also suspicious was that it was only up-to-date through September 2018.  The Third Quarter filings stations would have made by October 10th, 2018 were missing across the board with one exception—those stations that had uploaded them in the past few days after apparently spotting them as being missing from the database.  Indeed, the only links to documents that actually took you to a document seemed to be those uploaded in the past few days; older document listings were just dead links.

Given the eerie accuracy of these station Public Files and their odd shortcomings, it seemed clear that they represented a snapshot of stations’ Public Files as they existed in the latter part of September 2018—doppelgangers of stations’ real Public Files, but definitely not the genuine article.  When I asked where the broadcaster had obtained the link, I was told “Google”, and sure enough, when you search for “public inspection file” on Google, it is the first search result listed.  Those interested can find the site here.  Just don’t waste your time uploading any documents to it.

The reason reveals itself when you take a closer look at the link address: https://publicfiles-demo.fcc.gov.  The good news is that it is an actual FCC website and not a phishing website designed to steal station passwords, etc.  The bad news is that it is, as the web address suggests, just a demo site created by the FCC to demonstrate how to use the online Public File database (which all broadcast stations are now required to use).  Its demo nature was confirmed when I found a reference to it in a 2016 post we published here on CommLawCenter.  The FCC launched it on May 12, 2016 for training purposes when it moved TV stations and the first group of radio stations to its new online Public File database.

It is pretty much identical to the real online Public File database in every way, but there is one big difference—the demo site is still functioning, while trying to go to the real database takes you instead to an FCC shutdown notice.

Curiously, there is no hint anywhere on the demo webpage that it is just a demo and not the real online Public File database.  It being a demo does, however, explain why the FCC didn’t bother shutting it down when it shut down many of its other databases.  Unfortunately, when the real database became unavailable, many broadcasters came upon this site through Google or other search engines, and either failed to notice it wasn’t the real Public File database, or thought they had found a way around the FCC’s closed front door to the database.

While it is certainly unfortunate that a lot of stations appear to have wasted a lot of time uploading their Public File documents to a faux database, the far more insidious impact is that these stations have now been misled into believing they have successfully completed their uploads.  As a result, when the FCC eventually reopens and the real online Public File database is made available, these stations won’t know to upload their documents to the correct database, leaving them vulnerable to license renewal challenges and Public File fines (the FCC’s base fine for a Public Inspection File violation is $10,000).  If you hear from any broadcasters claiming that they were able to successfully upload their quarterly Public File reports while the FCC was closed, please disabuse them of that notion.  Let them know that they could not have, and that they need to upload those documents to the correct database no later than the day after the day the FCC reopens.

But that isn’t the end of this already stranger-than-fiction story.  At the beginning of December 2018, the FCC sent emails to over 1,000 radio stations indicating that the FCC had determined from a review of its online Public File database that those stations had failed to populate their online Public Files.  Those emails asked the stations to acknowledge receipt and to respond by providing the FCC with a date by which each station would “complete the upload of all required information.”

At the time the emails went out, I heard from a number of stations that were totally baffled by the FCC’s assertion that they had not uploaded everything, as they were sure they had.  In addition, it seemed incredibly unlikely that such a large number of radio stations could have failed to migrate their Public Files to the FCC’s online database.  It represented a real unsolved mystery, and many of us were intrigued as to what could possibly explain it when the requirement to move radio Public Files online had been so heavily publicized (for example, just here on CommLawCenter, you’ll find it discussed here, here, here, here, here, and here).

Now, however, I’m thinking we may have solved this mystery.  It is indeed possible for the FCC’s assertion that a large number of radio stations have empty online Public Files, and the assertion from many of those stations that they have already uploaded their Public Files, to both be true.  Ironically, in creating the demo site, the FCC was attempting to help broadcasters, but in leaving it up, the FCC has unwittingly set a trap for stations that continues to swallow innocent victims hourly.  I’m betting that a lot of those missing Public Files can be found at the FCC’s online Public File demo site https://publicfiles-demo.fcc.gov—the Bermuda Triangle of online Public File uploads.

[Postscript: In response to the publication of this post, the FCC has taken the demo database offline, preventing more stations from falling into this trap.  While that is obviously a good result overall, it unfortunately means that: (1) communications counsel now cannot determine whether stations they represent mistakenly uploaded to the demo site instead of the real one in order to notify those clients, and (2) stations that mistakenly uploaded their entire Public File to the demo site long before the FCC shutdown have lost the ability to access it in order to demonstrate to the FCC that they made a good faith effort to upload their Public File (albeit to the wrong database).  As a result, stations will need to talk to their employees handling Public File matters and ascertain directly from them what they have uploaded and to where to ensure that, as soon as the FCC reopens, the appropriate Public File documents are uploaded to the correct FCC database.] 

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Proving once again that nature abhors a vacuum, we’ve just learned of another bit of fallout for broadcasters from the federal shutdown—scammers are apparently calling broadcast stations pretending to be calling on behalf of the FCC and seeking to collect “FCC fees” over the telephone.  The first of these calls that we heard about occurred within six hours of the FCC shutting down.

With the FCC largely closed at this point, these callers are likely assuming that it will be very difficult for a broadcaster to ascertain the veracity of a fee claim or to confirm whether a caller is actually connected to the FCC.  As detailed in our earlier post, however, the FCC, along with the rest of the federal government, is operating only at a bare-bones “protecting life and property” level at this point.  While it could certainly use the money given the current absence of congressional funding, a closed FCC is not seeking to collect it from broadcasters, and certainly not over the telephone.

So if you get a call claiming to be on behalf of the FCC and demanding money, be skeptical.  Be even more skeptical if the caller wants you to pay with gift cards—the preferred payment method of phone scammers.  The FCC is really more of a check and credit card operation, and has very complex systems for processing those forms of payment.  It will not allow you to pay your regulatory fees with gift cards, and certainly doesn’t do it over the telephone.

If you do get such a call, one place you can report it to is the Federal Trade Commission, but you may have to wait until the federal shutdown is over, as processing complaints regarding phone scammers is one of the many FTC activities that have ceased due to the government shutdown.

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Broadcasters were spared some of the uncertainty related to the December 22, 2018 government shutdown because the FCC was able to independently fund its operations until January 3, 2019.  Yesterday, those funds ran out, and under the Antideficiency Act, FCC employees are prohibited from continuing to work until funds are available to pay them.  While the Antideficiency Act doesn’t directly affect the FCC’s filing and other databases (being automated, they don’t get paid as FCC employees), some of those systems are incapable of operating without regular human intervention, and some can operate without human intervention only until they “break”, at which point the Antideficiency Act prohibits anyone from maintaining or repairing them.

As a result, it wasn’t clear until the past two days which systems might remain online, and which systems would be preemptively taken down to avoid “breakage”.  The FCC released a Public Notice on Wednesday clarifying that the last normal day of business prior to the shutdown was January 2, 2019 (January 3 being only a half-day), so any FCC filings due on January 3rd or thereafter are now due on the day after the day the Commission eventually reopens.

The Public Notice also listed certain Commission electronic filing and database systems that would remain operational during the shutdown, and certain systems that would be taken offline.  Absent from either list was the FCC’s online Public Inspection File database, and conversations with FCC staff minutes before they were required to leave the building indicated that even they didn’t know for sure whether the public file database would continue operating during the shutdown.

The answer became clear late yesterday afternoon when the online Public Inspection File database ceased to function, redirecting stations trying to upload documents and any members of the public wishing to view them to a webpage describing the shutdown.  The public’s inability to access the online Public File triggers the obligation on the part of broadcasters and cable/DBS systems to make available to the public a back-up copy of the political broadcasting portion of their Public Inspection File (generally referred to as the “Political File”).  At the time the Commission created that obligation, it said stations could keep the Political File either electronically or in paper and make it available either at their main studio or on their website.

With the elimination of the Main Studio rule, however, that obligation was further modified such that Political File documents that are not available via the Commission’s online database must now be made available at an “accessible location” in the station’s community of license during normal business hours.  An accessible location would include a station office, the local library, the office of another broadcaster, or any other business.  Broadcasters are not required to make any other portion of their Public Inspection File beyond the Political File available during the federal shutdown.

Moving beyond the Political File “backup” obligation, the shutdown of the online Public Inspection File database also means that broadcasters cannot upload their Quarterly Issues/Programs List or Children’s Commercial Television Limits compliance documents that would otherwise be due in the online Public Inspection File on January 10, 2019.   Accordingly, while the upload of Public File documents is not considered an FCC “filing”, the date to upload those documents has effectively been extended until after the Commission reopens.

However, the inability to upload materials to the Public File does not relieve stations of their recordkeeping obligations.  As stated in a 2016 Public File Report and Order by the FCC, “[i]f the Commission’s online file becomes temporarily inaccessible for the uploading of new documents, [the FCC] will require entities to maintain those documents and upload them to the file once it is available again for upload.”  These materials do not need to be made available to the public during the shutdown, but stations should proceed as usual in the creation of their January 10th documentation and be prepared to upload those materials once the online Public Inspection File database becomes accessible.

Note also that television stations, while not obligated to, can still file their Children’s Television Programming Reports (that would normally be due on January 10th) with the FCC.  This is because the FCC has left the LMS filing system up and running for incentive auction-related filings (which are excluded from the shutdown because auction-related activities at the FCC are separately funded—see below).  However, the Commission’s Public Notice is clear that, other than auction filings and those necessary for the protection of life and property, filings at the FCC during the lapse in government funding “will not be reviewed or processed and will be considered accepted on the day following the day of return to normal operations.”

Finally, be aware that because the spectrum auction operations of the FCC remain fully funded, they are NOT affected by the government shutdown.  FCC staff will continue to be available to answer questions, grant requests for Special Temporary Authority and process requests for reimbursement from television broadcasters that are transitioning to another channel as a result of the broadcast incentive auction and repack.  Because those FCC operations continue, the FCC left its LMS database up and running, which means that transitioning television stations CAN and MUST make filings related to their transition.  This includes the Quarterly Transition Progress Report due on January 10, which must still be filed by that date.  For stations assigned to Phase 2 of the transition, the obligation to notify cable and satellite TV distributors 90 days prior to a station’s transition to a new channel, and the deadline for filing with the FCC a request for any extension of time to transition, remain unchanged.  In that regard, FCC staff will still be available to provide Phase 2 transition stations with the mailing addresses of the multichannel video programming distributors to which the notices must be sent.

So if upon hearing of the FCC shutdown you thought you could extend that holiday vacation, think again.  Your regulatory obligations didn’t go away, they just became more complicated to fulfill.