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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.

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.  In addition, certain of these stations, as detailed below, must submit their two most recent EEO Public File Reports along with FCC Form 2100, Schedule 396 as part of their license renewal applications due by August 2. 

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.  As discussed below, nonexempt SEUs must submit to the FCC their two most recent Annual EEO Public File Reports when they file their license renewal applications.

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, August 1, 2021 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 August 1, 2020 through July 31, 2021.  However, Nonexempt SEUs may “cut off” the reporting period up to ten days before July 31, 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 August 1, 2020 through July 21, 2021 for this year’s report (cutting it off up to ten days prior to July 31, 2021), then next year, the Nonexempt SEU must use a period beginning July 22, 2021 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, regardless of market size, 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 located in the “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.

Because the filing date for license renewal applications varies depending on the state in which a station’s community of license is located, the time period in which Menu Option initiatives must be completed also varies.  Radio and television stations licensed to communities in the states identified above should review the following to determine which current two-year segment applies to them:

  • Nonexempt radio station SEUs licensed to communities in California, North Carolina, and South Carolina must earn at least the required minimum number of Menu Option credits during the two year “segment” between August 1, 2019 and July 31, 2021, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt radio station SEUs licensed to communities in Illinois and Wisconsin must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between August 1, 2020 and July 31, 2022, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in Illinois and Wisconsin must earn at least the required minimum number of Menu Option credits during the two-year “segment” between August 1, 2019 and July 31, 2021, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in California, North Carolina, and South Carolina must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between August 1, 2020 and July 31, 2022, as well as during the previous two-year “segments” of their license terms.

Additional Obligations for Stations Whose License Renewal Applications Are Due by August 2, 2021 (Radio Stations Licensed to Communities in California, and Television Stations Licensed to Communities in Illinois and Wisconsin)

August 2, 2021 is the date by which radio stations in California and television stations in Illinois and Wisconsin must file their license renewal applications.  In conjunction with that filing, these stations must submit Schedule 396 of FCC Form 2100.  Nonexempt SEUs must include in their Schedule 396 filing their two most recent EEO Public File Reports and a narrative discussing their EEO Program over the past two years.

Recommendations

It is critical that every SEU maintain adequate records of its performance under the EEO Rule and that it practice overachieving when it comes to earning the required number of Menu Option credits.  The FCC will not give credit for Menu Option initiatives that are not duly reported in an SEU’s Annual EEO Public File Report or that are not adequately documented.  Accordingly, before an Annual EEO Public File Report is finalized and made public by posting it on a station’s website or placing it in the Public Inspection File, the draft document, including supporting material, should be reviewed by communications counsel.

Finally, note that the FCC is continuing its program of EEO audits.  These random audits check for compliance with the FCC’s EEO Rule, and are sent to approximately five percent of all broadcast stations each year.  Any station may become the subject of an FCC audit at any time.  For more information on the FCC’s EEO Rule and its requirements, as well as practical advice for compliance, please contact any of the attorneys in Pillsbury’s Communications Practice.

[1] In light of the significant layoffs and workforce reductions caused by the COVID-19 pandemic, the FCC has waived the requirement that broadcasters engage in broad outreach when rehiring employees that were laid off in connection with the COVID-19 pandemic, but only where the employee is rehired within nine months of being laid off.  Additional information on this limited waiver of EEO obligations can be found in our CommLawCenter article on this subject.

A PDF of this article can be found at EEO Public File Deadline

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This advisory is directed to television stations with locally-produced programming whose signals were carried by at least one cable system located outside the station’s local service area or by a satellite provider that provided service to at least one viewer outside the station’s local service area during 2020. These stations may be eligible to file royalty claims for compensation with the United States Copyright Royalty Board. These filings are due by August 2, 2021.

Under the federal Copyright Act, cable systems and satellite operators must pay license royalties to carry distant TV signals on their systems. Ultimately, the Copyright Royalty Board divides the royalties among those copyright owners who claim shares of the royalty fund. Stations that do not file claims by August 2, 2021 will not be able to collect royalties for carriage of their signals during 2020. While claims are typically due July 31, that date falls on a Saturday this year. Stations will therefore have until the first business day in August to file.

In order to file a cable royalty claim, a television station must have aired locally-produced programming of its own and had its signal carried outside of its local service area by at least one cable system in 2020. Television stations with locally-produced programming whose signals were delivered to subscribers located outside the station’s Designated Market Area in 2020 by a satellite provider are also eligible to file royalty claims. A station’s distant signal status should be evaluated and confirmed by communications counsel.

Cable and satellite claim forms can no longer be filed in paper form through mail or courier, and instead must be filed electronically via eCRB, the Copyright Royalty Board’s online filing system. Prior to filing electronically, claimants or their authorized representatives must register for an eCRB account. First-time electronic filers should register for an account as soon as possible, as there is a multiple day waiting period between initial registration and when a user may submit claims. Also, because accounts can become locked due to inactivity, filers who already have an eCRB account should confirm that their login credentials still work.

To submit claims, stations are required to supply the name and address of the filer and of the copyright owner, and must provide a general statement as to the nature of the copyrighted work (e.g., local news, sports broadcasts, specials, or other station-produced programming). Claims must be submitted by 11:59 pm ET on August 2, and claimants should keep copies of all submissions and confirmations of delivery.

Please contact any of the group’s attorneys for assistance in determining whether your station qualifies to make a claim and in filing the claim itself.

A PDF version of this article can be found here.

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Full power commercial and noncommercial radio, LPFM, and FM Translator stations, licensed to communities in California and full power TV, Class A TV, LPTV, and TV Translator stations licensed to communities in Illinois and Wisconsin, must file their license renewal applications by August 2, 2021.

August 2, 2021 is the license renewal application filing deadline for commercial and noncommercial radio and TV broadcast stations licensed to communities in the following states:

Full Power AM and FM, Low Power FM, and FM Translator Stations:
California

Full Power TV, Class A, LPTV, and TV Translator Stations:
Illinois and Wisconsin

Overview

The FCC’s state-by-state license renewal cycle began in June 2019 for radio stations and in June 2020 for television stations.  Radio and TV stations licensed to communities in the respective states listed above should be moving forward with their license renewal preparation.  This includes becoming familiar with the requirements for the filing itself, as well as being aware of changes the FCC has made to the public notice procedures associated with the filing (discussed below).

The license renewal application (FCC Form 2100, Schedule 303-S) primarily consists of a series of certifications in the form of Yes/No questions.  The FCC advises that applicants should only respond “Yes” when they are certain that the response is correct.  Thus, if an applicant is seeking a waiver of a particular rule or policy, or is uncertain that it has fully complied with the rule or policy in question, it should respond “No” to that certification.  The application provides an opportunity for explanations and exhibits, so the FCC indicates that a “No” response to any of the questions “will not cause the immediate dismissal of the application provided that an appropriate exhibit is submitted.”  An applicant should review any such exhibits or explanations with counsel prior to filing.

When answering questions in the license renewal application, the relevant reporting period is the licensee’s entire 8-year license term.  If the licensee most recently received a short-term license renewal, the application reporting period would cover only that abbreviated license term.  Similarly, if the license was assigned or transferred via FCC Form 314 or 315 during the license term, the relevant reporting period is just the time since consummation of that last assignment or transfer.

Schedule 303-S: Application for Renewal of Radio and TV Broadcast Station Licenses

Parties to the Application

Some of the certifications an applicant is asked to make in Schedule 303-S relate solely to the station, and some—such as character certifications—relate to any “party to the application.”  A party to the application is any individual or entity that has an attributable interest in a station.  This includes all parties whose ownership interest, positional interest (i.e., an officer or director), or other relation to the applicant confers on that party a sufficient degree of influence or control over the licensee to merit FCC attention.

For a corporation, this typically includes all officers, directors, and shareholders with a 5% or greater voting interest; for an LLC, its officers and members; and for a partnership, all partners.  However, each form of entity comes with its own caveats, limitations, and unique rules for determining attributable interest holders.  For example, limited partners are normally attributable interest holders unless they have been “insulated” from partnership decisions pursuant to very specific FCC requirements.  Filers should reach out to counsel prior to filing if there are any questions about who the FCC would consider a party in interest to the license renewal application.

Character Issues, Adverse Findings and FCC Violations

Pursuant to the FCC’s statutory obligation to consider any serious rule violations or patterns of abuse, each licensee must certify that neither it nor any party to the application has had “any interest in or connection with an application that was or is the subject of unresolved character issues.”  Where the applicant is unable to make this certification, it must include an exhibit identifying the party involved, the call letters and location of the station (or file number of the FCC application or docket), and describe the party’s connection to the matter, including all relevant dates.  The applicant must also explain why the unresolved character issue “is not an impediment” to grant of the license renewal application.

Applicants must also certify whether the licensee or any party to the application has been the subject of an adverse finding in any civil or criminal proceeding involving a felony, a mass-media related antitrust or unfair competition charge, a false statement to another governmental entity, or discrimination.  The applicant must report adverse findings from the past ten years and include an exhibit explaining the matter in detail and why it should not be an impediment to a grant of the license renewal application.  Note, however, that a station does not need to report an adverse finding that was disclosed to the FCC in the context of an earlier station application where it was subsequently found by the FCC to be not disqualifying.

The application form also asks the applicant to certify that “there have been no violations by the licensee of the Communications Act of 1934, as amended, or the rules or regulations of the Commission during the preceding license term.”  The instructions to the form make clear that this question is only asking the applicant to certify that there have been no formal findings of a violation by the FCC or a court, such as a Notice of Apparent Liability, Notice of Violation, or similar finding of a rule violation.  Applicants should not use this section to self-disclose any violations not previously identified by the FCC.

Foreign Ownership and Control

The applicant must also certify that the licensee has complied with Section 310 of the Communications Act regarding foreign influence over the station.  Section 310 generally prohibits the FCC from issuing a license to an alien, a representative of an alien, a foreign government or the representative thereof, or a corporation organized under the laws of a foreign government. It also prohibits a license being issued to an entity of which more than 20% of the capital stock is owned or voted by aliens, their representatives, a foreign government or its representative, or an entity organized under the laws of a foreign country, or, absent a special ruling from the FCC, to an entity whose parent company  has more than 25% of its capital stock owned or voted by aliens, their representatives, a foreign government or its representative, or an entity organized under the laws of a foreign country.

Station Operations

The license renewal application also requires stations to certify that they are currently operational, as the FCC will not renew the license of a station that is not broadcasting.

In a similar vein, Section 73.1740 of the FCC’s Rules sets forth the minimum operating hours for commercial broadcast stations, and Section 73.561 of the Rules establishes minimum operating hours for noncommercial educational FM stations.  In the license renewal application, stations must certify that they were not silent or operated less than the required minimum number of hours for a period of more than 30 days during the license term.  If they cannot, they must include an exhibit disclosing the relevant details and explaining why it should not adversely affect the station’s license renewal.

Stations must also certify as to several statements regarding Radiofrequency Electromagnetic (RF) exposure of the public and workers at the transmitter site.  Stations that were previously renewed and which have had no changes at their transmitter site since their last renewal application will generally be able to certify compliance with this statement.  Stations that have had a material change in the RF environment at their transmitter site must assess the impact of that change before certifying RF compliance and may need to submit an exhibit demonstrating the station’s compliance with RF requirements.

Related Filings and Materials

 Other Certifications

Successfully navigating the license renewal application also requires stations to certify that the rest of their regulatory house is in order.  For example, applicants must also certify that they have timely made other regulatory filings, such as the Biennial Ownership Report on FCC Form 2100, Schedule 323 or 323-E, and confirm that their advertising agreements do not discriminate on the basis of race or gender and contain non-discrimination clauses.   Applicants must also certify that they have placed all items required to be in the station’s Public Inspection File in the File, and that they have done so on a timely basis.  Public File violations have traditionally been a significant cause of fines at license renewal time.  As the Public Inspection File is now online, stations are reminded that third-parties are now able to easily review and confirm the timeliness of Public File documents.  As with all other certifications in the application form, stations must accurately respond and be prepared to provide documentation supporting their certifications if later requested by the FCC.

EEO

Depending on staff size, one of the items stations must certify is that they have timely placed in their Public Inspection File, as well as on their website, the annual Equal Employment Opportunity (“EEO”) Public File report.  Certain stations must also certify that they filed their EEO Mid-Term Report with the FCC.

Generally, a station that is part of a Station Employment Unit that employs fewer than five full-time employees is exempt from these requirements.  However, at license renewal time, all stations, regardless of staff size, must file FCC Form 2100, Schedule 396, the Broadcast EEO Program Report.  Stations in a Station Employment Unit with fewer than five full-time employees will only need to complete part of the form before filing it.  As a practical matter, because of the mechanics of the FCC’s filing system, an applicant will generally be unable to file its license renewal application until it can provide in that form the file number generated by the FCC when the station’s completed Schedule 396 is filed.

Certifications for Full Power TV and Class A TV Stations Only

While there is significant overlap between the certifications included in both the radio and TV license renewal applications, an important portion of the form specific to full power TV and Class A TV stations concerns certifications regarding the station’s children’s television programming obligations.

The Children’s Television Act of 1990 requires commercial full power TV and Class A TV stations to: (1) limit the amount of commercial matter aired during programming designed for children ages 12 and under, and (2) air programming responsive to the educational and informational needs of children ages 16 and under.  While stations have been required to submit Children’s Television Programming Reports and commercial limits certifications demonstrating their compliance with these requirements on a quarterly or annual basis,[1] the license renewal application requires applicants to further certify that these obligations have been satisfied and documented as required over the entire license term and to explain any instances of noncompliance.  Stations can find additional information on the children’s television programming and reporting obligations in our most recent Children’s Television Programming Advisory.

Although noncommercial TV stations are not subject to commercial limitations or required to file Children’s Television Programming Reports, such stations are required to air programming responsive to children’s educational and informational needs.  In preparation for license renewal, such stations should therefore ensure they have documentation demonstrating compliance with this obligation in the event their license renewal is challenged.

For Class A television stations, in addition to certifications related to children’s television programming, the application requires certification of compliance with the Class A eligibility and service requirements under Section 73.6001 of the FCC’s Rules.  Specifically, such stations must broadcast a minimum of 18 hours a day and average at least three hours per week of locally produced programming each quarter to maintain their Class A status.  Applicants must certify that they have and will continue to meet these requirements.

Post-Filing License Renewal Announcements

In prior license renewal cycles, stations were required to give public notice of a license renewal application both before and after the filing of that application. For the current cycle, the FCC eliminated the pre-filing public notices and modified the procedures for post-filing notices.  These changes modify the timing and number of on-air announcements required, replace newspaper public notice requirements with an online notice, and revise the text of the announcements themselves.

As such, full power commercial and noncommercial radio and LPFM stations, and full power and Class A TV stations, as well as LPTV stations capable of local origination, must broadcast a total of six post-filing license renewal announcements over four consecutive weeks, with at least one airing each week and no more than two airing in any week (each of which must air on different days).  The first such announcement must air within five business days after the FCC has issued a Public Notice announcing its acceptance of the application for filing.

On-air post-filing announcements must be broadcast on a weekday (Monday through Friday) between 7:00 am and 11:00 pm local time based on the applicant station’s community of license.  The text of the announcement is as follows:

On [date], [applicant name], licensee of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license.  Members of the public wishing to view this application or obtain information about how to file comments and petitions on the application can visit publicfiles.fcc.gov, and search in [station call sign’s] public file.

For those types of stations that do not have Public Inspection Files, the on-air post-filing announcement should instead be:

On [date], [applicant name], licensee of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license.  Members of the public wishing to view this application or obtain information about how to file comments and petitions can visit www.fcc.gov/stationsearch, and search in the list of [station call sign’s] filed applications.

For television broadcast stations, when these on-air announcements are presented aurally, the public notice text must also be presented visually onscreen.

Special rules apply to noncommercial educational stations that do not normally operate during any month when their announcements would otherwise be due to air, as well as to other silent stations. These stations should contact counsel regarding how to give the required public notice.

Certification of Compliance

Within seven days of the broadcast of the last required announcement, full power radio and TV station and Class A TV station license renewal applicants should complete the attached Statement of Compliance and place it in the station’s Public Inspection File.  LPFM and LPTV license renewal applicants should complete the attached Statement of Compliance and place it in their station records file.

Online Public Notice Required for FM Translator, TV Translator, and Certain LPTV Stations

FM translator, TV translator, and LPTV stations not capable of local origination are not required to broadcast post-filing announcements, and have typically been required to publish public notices in a local newspaper instead.  The FCC has eliminated the newspaper publication requirement in favor of online notices, requiring such stations to publish written notice on a station-affiliated website upon filing a license renewal application.

A prominently displayed link or tab that reads “FCC Applications” must be posted on the station website homepage, and link to a separate page containing the following notice:

On [date], [applicant name], [permittee / licensee] of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license. Members of the public wishing to view this application or obtain information about how to file comments and petitions on the application can visit [insert hyperlink to application link in applicant’s online Public Inspection File or, if the station has no online Public Inspection File, to application location in the Media Bureau’s Licensing and Management System].

This separate page must also include the date the page was last revised.  The notice and corresponding link to the renewal application must be posted within five business days after the FCC has issued a Public Notice announcing its acceptance of the application for filing and remain on the station’s website for 30 consecutive days.  At the end of the 30-day period, the notice can be removed, and if no other applications requiring online notice are pending, the webpage should be updated to include the following text instead:

There are currently no applications pending for which online public notice is required.

The rules contain specific requirements as to where station applicants that do not have websites should post their announcement. These stations should consult with counsel on the proper online notice procedures.

After publishing the notice, the licensee should complete and execute a Statement of Compliance regarding that publication and place the Statement of Compliance in its Public Inspection File.  While FM translator, TV translator, and LPTV station licensees are not required to keep a Public Inspection File, they are required to maintain and make available to FCC representatives a station records file that contains their current authorization and copies of all FCC filings and correspondence with the Commission.  For them, the completed Statement of Compliance should be included in their station records file.

[1] Note that in 2019, the FCC changed the obligation to file the Children’s Television Programming Report and place the commercial limits certification in the Public Inspection File from a quarterly requirement to an annual obligation.

The full article, along with examples of compliance statements, can be found at License Application Renewal Reminder.

 

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ Public Inspection Files by July 10, 2021, reflecting information for the months of April, May, and June 2021.

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 July 10, 2021, covering the period from April 1, 2021 through June 30, 2021.

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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:

  • Online Drone Retailer Fined Nearly $3 Million for Marketing Unauthorized Devices
  • FCC Denies Motion to Quash Letter of Inquiry Concerning Unauthorized Operation of Nevada LPFM Station
  • Unauthorized License Transfers Lead to $104,000 Consent Decree for New Jersey Water Service Company

FCC Affirms $2.8 Million Fine for Marketing Unauthorized Drone Transmitters

The FCC denied a petition asking it to reconsider a $2.8 million fine it issued to an online company for marketing and selling audio/visual (A/V) transmitters for use with drones that did not comply with FCC rules. The FCC found that dozens of the devices transmitted in unauthorized radio frequency bands and some transmitters were operating at excessive power levels.

Pursuant to Section 302(b) of the Communications Act of 1934, “[n]o person shall manufacture, import, sell, offer for sale, or ship devices or home electronic equipment and systems, or use devices, which fail to comply with regulations promulgated pursuant to this section.” Section 2.803(b) of the Commission’s Rules prohibits the marketing of radio frequency devices unless the device has first been properly authorized, identified, and labeled in accordance with the FCC’s rules. Any electronic device which intentionally emits radio frequency energy must be authorized before it can be marketed within the United States. The FCC noted in its Forfeiture Order that these technical and authorization requirements are designed to prevent interference.

The FCC’s Enforcement Bureau, Spectrum Enforcement Division, received complaints about the company’s equipment marketing and began investigating in 2016. After the investigation, the Enforcement Bureau issued a Citation and Order for violations of Section 302 of the Communications Act and Sections 2.803 and 2.925 of the FCC’s Rules. The Citation and Order stated that the company had been illegally marketing noncompliant and unauthorized drone transmitters. The FCC then received more complaints about the company’s marketing of the transmitters and began a further investigation.

After the company failed to respond, the Enforcement Bureau issued a second Citation and Order to compel the company to respond. The company again did not answer. In June 2018, a Notice of Apparent Liability for Forfeiture for over $2.8 million was issued to the company for its violations of the Communications Act and the FCC’s rules, and for its failure to respond to the FCC’s two orders. The company responded in July 2018, arguing that the Notice of Apparent Liability for Forfeiture should be cancelled, or the amount of the proposed fine should be reduced.

As we covered in detail here, the FCC released a Forfeiture Order in July 2020 issuing the proposed $2.8 million fine, declining to reduce the amount. In the Forfeiture Order, the FCC considered and rejected the company’s response, which did not dispute any of the factual allegations. Among its arguments, the company asserted that it lacked fair notice of its legal obligations. The FCC rejected this argument, explaining that the company had sufficient notice of the long-standing equipment authorization rules which apply to radio frequency devices. The FCC also explained that it twice put the company on notice when it issued citations warning the company of those requirements.

The FCC also rejected the company’s argument that the rules say nothing about authorization for devices that operate on both amateur and other frequencies, explaining that the rules are clear that any device emitting radio frequency energy is subject to the authorization requirements unless an exception applies. As it stands, the only current exception is for devices operating solely on amateur frequencies.

In August 2020, the company filed a Petition for Reconsideration asking the FCC to reconsider the Forfeiture Order. In June 2021, the FCC released an Order stating that upon review of the Petition for Reconsideration and the entire record, the Petition presented no new information and there was no basis for reconsideration. The FCC affirmed the Forfeiture Order and the fine.

The FCC strictly enforces its rules surrounding unauthorized devices, with a statement issued by Acting Chairwoman Rosenworcel’s office noting that this fine should serve as “notice to all others that we take our policies protecting our airwaves seriously.” The company will have 30 days from release of the June Order to pay the fine. If the fine is not paid within that time, the FCC may refer the matter to the Department of Justice for enforcement of the forfeiture.

FCC Rejects Nevada LPFM’s Motion to Quash a Letter of Inquiry Regarding Unauthorized Operation

The FCC’s Enforcement Bureau recently released an Order dismissing a low power FM (“LPFM”) licensee’s Motion to Quash a Letter of Inquiry (“LOI”) and denying the licensee’s Motion for Stay.

In November 2019, the Enforcement Bureau sent a letter to the licensee of the LPFM station notifying it that its license had expired pursuant to Section 312(g) of the Communications Act. The letter explained that the station had been operating from a site that was 256 feet from the station’s licensed coordinates. Pursuant to Section 73.875(b)(2) of the FCC’s Rules, any change in a station’s geographic coordinates, including corrections to the coordinates or a move of the antenna to another site, may only be made after the FCC grants a construction permit application. Though the licensee filed a request for authority to make the coordinate change, this request came only after it had already been operating at the new site for over a year.

The FCC noted in its 2019 letter to the licensee that Section 312(g) is clear that “[i]f a broadcasting station fails to transmit broadcast signals for any consecutive 12-month period, then the station license granted for the operation of that broadcast station expires at the end of that period.” FCC caselaw also makes clear that stations cannot avoid this 12-month deadline by operating from unauthorized facilities, as was the case here. The FCC found that the license had therefore expired, and the facts did not support reinstatement of the license.

The FCC then sent an LOI in April 2021 asking the Licensee if it continued to operate the station after the license expired. The licensee responded by filing a Motion to Quash the Letter of Inquiry and filing a Motion for Stay of the FCC’s investigation into whether it had continued to operate the station. In June 2021, the FCC issued an Order dismissing the licensee’s Motion to Quash the Letter of Inquiry, explaining that the LOI was issued pursuant to Sections 4(i), 4(j) and 403 of the Communications Act, not under its subpoena power in Section 409(e). The FCC said that because the licensee brought its Motion to Quash under Section 1.334 of the FCC’s Rules, which only applies to subpoenas, and because the LOI is not a subpoena, the Motion to Quash was “procedurally defective” and therefore dismissed it.

The FCC also denied the arguments laid out in the Motion to Quash for independent reasons. Among other arguments, the licensee had contended it has the right to operate its station pending the outcome of its appeal before the United States Court of Appeals for the District of Columbia Circuit. The FCC rejected this claim, explaining that it is premature. The FCC noted that it lacks sufficient information to determine whether the station indeed operated after the expiration of its license, and should it take a position regarding that argument it would pre-judge its own investigation. The FCC also dismissed the licensee’s argument that granting the Motion to Quash would serve the public interest. The FCC stated that granting the Motion would set a precedent allowing all appellants to avoid investigation while an appeal is pending.

Finally, the FCC denied the Motion for Stay because the licensee based its motion on its likelihood of prevailing on the Motion to Quash and the pending appeal. The FCC explained that not only did it dismiss the Motion to Quash, rendering moot any argument the licensee would prevail on that motion, but a pending appeal does not preclude the FCC from continuing its investigation into whether the station operated after the expiration of its license. 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 Fines Colorado Wireless Operators for Use of Unauthorized Equipment and Unauthorized Operations
  • VoIP Provider Enters Into Consent Decree With $180,000 Penalty Over Failure to Meet FCC Filing Requirements
  • FCC Investigates Colorado Manufacturer’s Unauthorized Signal Booster

Two Colorado Wireless Operators Fined for Unauthorized Equipment and Unauthorized Operations

The FCC fined two Colorado-based wireless operators for intentionally altering settings on equipment so as to operate it in a manner not authorized by the FCC’s rules.  The operators, licensed to provide radiolocation services (such as radar services), instead operated a GPS vehicle tracking service using the unauthorized equipment on unauthorized frequencies.

Under Section 301 of the Communications Act of 1934 and Section 1.903(a) of the FCC’s Rules, the operation of any device that transmits radio signals, communications, or energy without an FCC authorization is prohibited.  Additionally, Section 302(b) of the Communications Act requires that radio frequency devices operate in accordance with their associated FCC authorization.  While a radiolocation service licensed under subpart F of Part 90 of the FCC’s Rules permits operations that “determine distance, direction, speed or position by means of radiolocation services, for purposes other than navigation,” GPS services rely on satellite communications to determine the location of an object, typically to allow the owner of a GPS receiver to navigate based upon triangulation of the satellite GPS signals.

The FCC began investigating the two operators in April 2017 after receiving a complaint alleging that the companies were providing non-radiolocation wireless data transmission services rather than the radiolocation services for which they were licensed.  The Enforcement Bureau issued Letters of Inquiry (LOI) to both operators, and FCC agents followed up with an investigation of the companies’ shared facilities in Denver, Colorado.  This investigation led the FCC to issue a second set of LOIs seeking additional information from the companies regarding the equipment used.

In October 2017, the companies filed requests for Special Temporary Authority (STA) acknowledging their unauthorized use of the equipment and seeking authority to migrate their radiolocation services to an affiliated non-radiolocation licensee authorized to operate on a different frequency.  The FCC denied the STA requests, as well as a subsequent Petition for Rulemaking filed jointly by the companies, noting that the services proposed would still be prohibited on the newly-requested frequencies, and that the transmission of GPS coordinates is not a radiolocation service as defined by the FCC’s rules.

In September 2018, the FCC issued a Notice of Apparent Liability (NAL) proposing $534,580 in total fines against the two companies for the use of unauthorized equipment and conducting unauthorized operations.  The companies responded to the notice, presenting several arguments as to why the NAL should be cancelled, but according to the FCC, still failing to explain how the non-radiolocation GPS service could legally operate using noncompliant equipment on a frequency band designated for other services.

The FCC considered and dismissed the companies’ various arguments, upholding the fines it had originally proposed.  Among other arguments, the companies asserted that they had held a reasonable belief that the GPS service was authorized due to prior conversations and assurances from FCC staff.  The FCC rejected that argument and reiterated that “parties who rely on staff advice or interpretations do so at their own risk.”  Critically, the FCC noted that the licenses themselves did not authorize non-radiolocation services, and a license grant is not a blanket authorization to operate any equipment of a party’s choosing.  The FCC also rejected the companies’ request that the fines be cancelled, instead choosing to adjust the fines upward due to both companies’ history of repeated and continuous violations of the FCC’s rules, along with the deliberate nature of these particular violations.

The companies have 30 days from release of the Orders to pay the fines in full.  If the fines are not paid within that time, the FCC noted that it may refer the matter to the Department of Justice to commence collection proceedings.

VoIP Provider Hit With $180,000 Penalty Over Failure to Comply with FCC Filing Requirements

The FCC entered into a Consent Decree with a Voice over IP (VoIP) provider, resolving an investigation into whether the provider violated several of the FCC’s filing requirements.  For purposes of settling the matter, the provider admitted that it failed to timely file its Telecommunications Reporting Worksheets, CPNI Certifications, Advanced Telecommunications Capability Data, and a response to an LOI from the Enforcement Bureau.

Under Section 254(d) of the Communications Act, “[e]very telecommunications carrier [providing] interstate telecommunications services . . . [must] contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service.”  In implementing this directive, the FCC requires interstate telecommunications service providers, including VoIP providers, to contribute a portion of their interstate and international end-user telecommunications revenue to the Universal Service Fund (USF).  To accomplish this, providers must file annual, and in most cases quarterly, Telecommunications Reporting Worksheets (Worksheets) reporting their interstate and international revenue.  Failure to timely file and accurately report this information prevents the FCC from ensuring the provider is contributing its required share to the USF. Continue reading →

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Full power commercial and noncommercial radio, LPFM, and FM Translator stations, licensed to communities in Arizona, Idaho, New Mexico, Nevada, Utah, and Wyoming and full power TV, Class A TV, LPTV, and TV Translator stations licensed to communities in Michigan and Ohio, must file their license renewal applications by June 1, 2021.

June 1, 2021 is the license renewal application filing deadline for commercial and noncommercial radio and TV broadcast stations licensed to communities in the following states:

Full Power AM and FM, Low Power FM, and FM Translator Stations:
Arizona, Idaho, New Mexico, Nevada, Utah, and Wyoming

Full Power TV, Class A, LPTV, and TV Translator Stations:
Michigan and Ohio

Overview

The FCC’s state-by-state license renewal cycle began in June 2019 for radio stations and in June 2020 for television stations.  Radio and TV stations licensed to communities in the respective states listed above should be moving forward with their license renewal preparation.  This includes becoming familiar with the requirements for the filing itself, as well as being aware of recent changes the FCC has made to the public notice procedures associated with the filing (discussed below).

The license renewal application (FCC Form 2100, Schedule 303-S) primarily consists of a series of certifications in the form of Yes/No questions.  The FCC advises that applicants should only respond “Yes” when they are certain that the response is correct.  Thus, if an applicant is seeking a waiver of a particular rule or policy, or is uncertain that it has fully complied with the rule or policy in question, it should respond “No” to that certification.  The application provides an opportunity for explanations and exhibits, so the FCC indicates that a “No” response to any of the questions “will not cause the immediate dismissal of the application provided that an appropriate exhibit is submitted.”  An applicant should review any such exhibits or explanations with counsel prior to filing.

When answering questions in the license renewal application, the relevant reporting period is the licensee’s entire 8-year license term.  If the licensee most recently received a short-term license renewal, the application reporting period would cover only that abbreviated license term.  Similarly, if the license was assigned or transferred via FCC Form 314 or 315 during the license term, the relevant reporting period is just the time since consummation of that last assignment or transfer.

Schedule 303-S: Application for Renewal of Radio and TV Broadcast Station Licenses

Parties to the Application

Some of the certifications an applicant is asked to make in Schedule 303-S relate solely to the station, and some—such as character certifications—relate to any “party to the application.”  A party to the application is any individual or entity that has an attributable interest in a station.  This includes all parties whose ownership interest, positional interest (i.e., an officer or director), or other relation to the applicant confers on that party a sufficient degree of influence or control over the licensee to merit FCC attention.

For a corporation, this typically includes all officers, directors, and shareholders with a 5% or greater voting interest; for an LLC, its officers and members; and for a partnership, all partners.  However, each form of entity comes with its own caveats, limitations, and unique rules for determining attributable interest holders.  For example, limited partners are normally attributable interest holders unless they have been “insulated” from partnership decisions pursuant to very specific FCC requirements.  Filers should reach out to counsel prior to filing if there are any questions about who the FCC would consider a party in interest to the license renewal application.

Character Issues, Adverse Findings and FCC Violations

Pursuant to the FCC’s statutory obligation to consider any serious rule violations or patterns of abuse, each licensee must certify that neither it nor any party to the application has had “any interest in or connection with an application that was or is the subject of unresolved character issues.”  Where the applicant is unable to make this certification, it must include an exhibit identifying the party involved, the call letters and location of the station (or file number of the FCC application or docket), and describe the party’s connection to the matter, including all relevant dates.  The applicant must also explain why the unresolved character issue “is not an impediment” to grant of the license renewal application.

Applicants must also certify whether the licensee or any party to the application has been the subject of an adverse finding in any civil or criminal proceeding involving a felony, a mass-media related antitrust or unfair competition charge, a false statement to another governmental entity, or discrimination.  The applicant must report adverse findings from the past ten years and include an exhibit explaining the matter in detail and why it should not be an impediment to a grant of the license renewal application.  Note, however, that a station does not need to report an adverse finding that was disclosed to the FCC in the context of an earlier station application where it was subsequently found by the FCC to be not disqualifying.

The application form also asks the applicant to certify that “there have been no violations by the licensee of the Communications Act of 1934, as amended, or the rules or regulations of the Commission during the preceding license term.”  The instructions to the form make clear that this question is only asking the applicant to certify that there have been no formal findings of a violation by the FCC or a court, such as a Notice of Apparent Liability, Notice of Violation, or similar finding of a rule violation.  Applicants should not use this section to self-disclose any violations not previously identified by the FCC.

Foreign Ownership and Control

The applicant must also certify that the licensee has complied with Section 310 of the Communications Act regarding foreign influence over the station.  Section 310 generally prohibits the FCC from issuing a license to an alien, a representative of an alien, a foreign government or the representative thereof, or a corporation organized under the laws of a foreign government. It also prohibits a license being issued to an entity of which more than 20% of the capital stock is owned or voted by aliens, their representatives, a foreign government or its representative, or an entity organized under the laws of a foreign country, or, absent a special ruling from the FCC, to an entity whose parent company  has more than 25% of its capital stock owned or voted by aliens, their representatives, a foreign government or its representative, or an entity organized under the laws of a foreign country.

Station Operations

The license renewal application also requires stations to certify that they are currently operational, as the FCC will not renew the license of a station that is not broadcasting.

In a similar vein, Section 73.1740 of the FCC’s Rules sets forth the minimum operating hours for commercial broadcast stations, and Section 73.561 of the Rules establishes minimum operating hours for noncommercial educational FM stations.  In the license renewal application, stations must certify that they were not silent or operated less than the required minimum number of hours for a period of more than 30 days during the license term.  If they cannot, they must include an exhibit disclosing the relevant details and explaining why it should not adversely affect the station’s license renewal.

Stations must also certify as to several statements regarding Radiofrequency Electromagnetic (RF) exposure of the public and workers at the transmitter site.  Stations that were previously renewed and which have had no changes at their transmitter site since their last renewal application will generally be able to certify compliance with this statement. Stations that have had a material change in the RF environment at their transmitter site must assess the impact of that change before certifying RF compliance and may need to submit an exhibit demonstrating the station’s compliance with RF requirements.

Related Filings and Materials

Other Certifications

Successfully navigating the license renewal application also requires stations to certify that the rest of their regulatory house is in order.  For example, applicants must also certify that they have timely made other regulatory filings, such as the Biennial Ownership Report on FCC Form 2100, Schedule 323 or 323-E, and confirm that their advertising agreements do not discriminate on the basis of race or gender and contain non-discrimination clauses.   Applicants must also certify that they have placed all items required to be in the station’s Public Inspection File in the File, and that they have done so on a timely basis.  Public File violations have traditionally been a significant cause of fines at license renewal time.  As the Public Inspection File is now online, stations are reminded that third-parties are now able to easily review and confirm the timeliness of Public File documents.  As with all other certifications in the application form, stations must accurately respond and be prepared to provide documentation supporting their certifications if later requested by the FCC.

EEO

Depending on staff size, one of the items stations must certify is that they have timely placed in their Public Inspection File, as well as on their website, the annual Equal Employment Opportunity (“EEO”) Public File report.  Certain stations must also certify that they filed their EEO Mid-Term Report with the FCC.

Generally, a station that is part of a Station Employment Unit that employs fewer than five full-time employees is exempt from these requirements.  However, at license renewal time, all stations, regardless of staff size, must file FCC Form 2100, Schedule 396, the Broadcast EEO Program Report.  Stations in a Station Employment Unit with fewer than five full-time employees will only need to complete part of the form before filing it.  As a practical matter, because of the mechanics of the FCC’s filing system, an applicant will generally be unable to file its license renewal application until it can provide in that form the file number generated by the FCC when the station’s completed Schedule 396 is filed.

Certifications for Full Power TV and Class A TV Stations Only

While there is significant overlap between the certifications included in both the radio and TV license renewal applications, an important portion of the form specific to full power TV and Class A TV stations concerns certifications regarding the station’s children’s television programming obligations.

The Children’s Television Act of 1990 requires commercial full power TV and Class A TV stations to: (1) limit the amount of commercial matter aired during programming designed for children ages 12 and under, and (2) air programming responsive to the educational and informational needs of children ages 16 and under.  While stations have been required to submit Children’s Television Programming Reports and commercial limits certifications demonstrating their compliance with these requirements on a quarterly or annual basis,[1] the license renewal application requires applicants to further certify that these obligations have been satisfied and documented as required over the entire license term and to explain any instances of noncompliance.  Stations can find additional information on the children’s television programming and reporting obligations in our most recent Children’s Television Programming Advisory.

Although noncommercial TV stations are not subject to commercial limitations or required to file Children’s Television Programming Reports, such stations are required to air programming responsive to children’s educational and informational needs.  In preparation for license renewal, such stations should therefore ensure they have documentation demonstrating compliance with this obligation in the event their license renewal is challenged.

For Class A television stations, in addition to certifications related to children’s television programming, the application requires certification of compliance with the Class A eligibility and service requirements under Section 73.6001 of the FCC’s Rules.  Specifically, such stations must broadcast a minimum of 18 hours a day and average at least three hours per week of locally produced programming each quarter to maintain their Class A status.  Applicants must certify that they have and will continue to meet these requirements.

Post-Filing License Renewal Announcements

In prior license renewal cycles, stations were required to give public notice of a license renewal application both before and after the filing of that application. For the current cycle, the FCC eliminated the pre-filing public notices and modified the procedures for post-filing notices.  These changes modify the timing and number of on-air announcements required, replace newspaper public notice requirements with an online notice, and revise the text of the announcements themselves.

As such, full power commercial and noncommercial radio and LPFM stations, and full power and Class A TV stations, as well as LPTV stations capable of local origination, must broadcast a total of six post-filing license renewal announcements over four consecutive weeks, with at least one airing each week and no more than two airing in any week (each of which must air on different days).  The first such announcement must air within five business days after the FCC has issued a Public Notice announcing its acceptance of the application for filing.

On-air post-filing announcements must be broadcast on a weekday (Monday through Friday) between 7:00 am and 11:00 pm local time based on the applicant station’s community of license.  The text of the announcement is as follows:

On [date], [applicant name], licensee of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license.  Members of the public wishing to view this application or obtain information about how to file comments and petitions on the application can visit publicfiles.fcc.gov, and search in [station call sign’s] public file.

For those types of stations that do not have Public Inspection Files, the on-air post-filing announcement should instead be:

On [date], [applicant name], licensee of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license.  Members of the public wishing to view this application or obtain information about how to file comments and petitions can visit www.fcc.gov/stationsearch, and search in the list of [station call sign’s] filed applications.

For television broadcast stations, when these on-air announcements are presented aurally, the public notice text must also be presented visually onscreen.

Special rules apply to noncommercial educational stations that do not normally operate during any month when their announcements would otherwise be due to air, as well as to other silent stations. These stations should contact counsel regarding how to give the required public notice.

Certification of Compliance

Within seven days of the broadcast of the last required announcement, full power radio and TV station and Class A TV station license renewal applicants should complete the attached Statement of Compliance and place it in the station’s Public Inspection File.  LPFM and LPTV license renewal applicants should complete the attached Statement of Compliance and place it in their station records file.

Online Public Notice Required for FM Translator, TV Translator, and Certain LPTV Stations

FM translator, TV translator, and LPTV stations not capable of local origination are not required to broadcast post-filing announcements, and have typically been required to publish public notices in a local newspaper instead.  The FCC has eliminated the newspaper publication requirement in favor of online notices, requiring such stations to publish written notice on a station-affiliated website upon filing a license renewal application.

A prominently displayed link or tab that reads “FCC Applications” must be posted on the station website homepage, and link to a separate page containing the following notice:

On [date], [applicant name], [permittee / licensee] of [station call sign], [station frequency], [station community of license], filed an application with the Federal Communications Commission for renewal of its license. Members of the public wishing to view this application or obtain information about how to file comments and petitions on the application can visit [insert hyperlink to application link in applicant’s online Public Inspection File or, if the station has no online Public Inspection File, to application location in the Media Bureau’s Licensing and Management System].

This separate page must also include the date the page was last revised.  The notice and corresponding link to the renewal application must be posted within five business days after the FCC has issued a Public Notice announcing its acceptance of the application for filing and remain on the station’s website for 30 consecutive days.  At the end of the 30-day period, the notice can be removed, and if no other applications requiring online notice are pending, the webpage should be updated to include the following text instead:

There are currently no applications pending for which online public notice is required.

The rules contain specific requirements as to where station applicants that do not have websites should post their announcement. These stations should consult with counsel on the proper online notice procedures.

After publishing the notice, the licensee should complete and execute a Statement of Compliance regarding that publication and place the Statement of Compliance in its Public Inspection File.  While FM translator, TV translator, and LPTV station licensees are not required to keep a Public Inspection File, they are required to maintain and make available to FCC representatives a station records file that contains their current authorization and copies of all FCC filings and correspondence with the Commission.  For them, the completed Statement of Compliance should be included in their station records file.

[1] Note that in 2019, the FCC changed the obligation to file the Children’s Television Programming Report and place the commercial limits certification in the Public Inspection File from a quarterly requirement to an annual obligation.

The full article, along with examples of compliance statements, can be found at License Application Renewal Reminder.

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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.

June 1 is the deadline for broadcast stations licensed to communities in Arizona, the District of Columbia, Idaho, Maryland, Michigan, New Mexico, Nevada, Ohio, Utah, Virginia, West Virginia, and Wyoming 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 submit their two most recent EEO Public File Reports along with FCC Form 2100, Schedule 396 as part of their license renewal applications due by June 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,[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.  As discussed below, nonexempt SEUs must submit to the FCC their two most recent Annual EEO Public File Reports when they file their license renewal applications.

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, June 1, 2021 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 June 1, 2020 through May 31, 2021.  However, Nonexempt SEUs may “cut off” the reporting period up to ten days before May 31, 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 June 1, 2020 through May 21, 2021 for this year’s report (cutting it off up to ten days prior to May 31, 2021), then next year, the Nonexempt SEU must use a period beginning May 22, 2021 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, regardless of market size, 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 located in the “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.

Because the filing date for license renewal applications varies depending on the state in which a station’s community of license is located, the time period in which Menu Option initiatives must be completed also varies.  Radio and television stations licensed to communities in the states identified above should review the following to determine which current two-year segment applies to them:

  • Nonexempt radio station SEUs licensed to communities in Arizona, the District of Columbia, Idaho, Maryland, New Mexico, Nevada, Utah, Virginia, West Virginia, and Wyoming, must earn at least the required minimum number of Menu Option credits during the two year “segment” between June 1, 2019 and May 31, 2021, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt radio station SEUs licensed to communities in Michigan and Ohio must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between June 1, 2020 and May 31, 2022, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in Michigan and Ohio must earn at least the required minimum number of Menu Option credits during the two-year “segment” between June 1, 2019 and May 31, 2021, as well as during the previous two-year “segments” of their license terms.
  • Nonexempt television station SEUs licensed to communities in Arizona, the District of Columbia, Idaho, Maryland, New Mexico, Nevada, Utah, Virginia, West Virginia, and Wyoming must have earned at least the required minimum number of Menu Option credits during the two-year “segment” between June 1, 2020 and May 31, 2022, as well as during the previous two-year “segments” of their license terms.

Additional Obligations for Stations Whose License Renewal Applications Are Due by June 1, 2021 (Radio Stations Licensed to Communities in Arizona, Idaho, New Mexico, Nevada, Utah, and Wyoming, and Television Stations Licensed to Communities in Michigan and Ohio)

June 1, 2021 is the date by which radio stations in Arizona, Idaho, New Mexico, Nevada, Utah, and Wyoming and television stations in Michigan and Ohio, must file their license renewal applications.  In conjunction with that filing, these stations must submit Schedule 396 of FCC Form 2100.  Nonexempt SEUs must include in their Schedule 396 filing their two most recent EEO Public File Reports and a narrative discussing their EEO Program over the past two years.

Recommendations

It is critical that every SEU maintain adequate records of its performance under the EEO Rule and that it practice overachieving when it comes to earning the required number of Menu Option credits.  The FCC will not give credit for Menu Option initiatives that are not duly reported in an SEU’s Annual EEO Public File Report or that are not adequately documented.  Accordingly, before an Annual EEO Public File Report is finalized and made public by posting it on a station’s website or placing it in the Public Inspection File, the draft document, including supporting material, should be reviewed by communications counsel.

Finally, note that the FCC is continuing its program of EEO audits.  These random audits check for compliance with the FCC’s EEO Rule, and are sent to approximately five percent of all broadcast stations each year.  Any station may become the subject of an FCC audit at any time.  For more information on the FCC’s EEO Rule and its requirements, as well as practical advice for compliance, please contact any of the attorneys in Pillsbury’s Communications Practice.

[1] In light of the significant layoffs and workforce reductions caused by the COVID-19 pandemic, the FCC has waived the requirement that broadcasters engage in broad outreach when rehiring employees that were laid off in connection with the COVID-19 pandemic, but only where the employee is rehired within nine months of being laid off.  Additional information on this limited waiver of EEO obligations can be found in our CommLawCenter article on this subject.

A PDF of this article can be found at EEO Public File Deadline

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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 Long-Distance Carrier $4.1 Million Over Cramming and Slamming Violations
  • Wireless Internet Service Provider’s Unauthorized Operations Lead to Consent Decree
  • Mississippi and Michigan Radio Station Licensees Admonished for Late License Renewal Filings

Long Distance Carrier Receives $4.1 Million Fine for Deceptive Billing and Service Practices Targeting Vulnerable Populations

The FCC fined a long-distance telephone service provider $4.1 million for deceptive practices involving switching customers from their preferred interexchange carrier (the company handling a caller’s long-distance calls) without their permission, a practice known as “slamming,” and adding unauthorized charges to customers’ telephone service bills, a practice referred to as “cramming.”  This far-reaching scam employed tactics targeting vulnerable customers, including senior citizens and individuals with severe health conditions.  To make matters worse, when the fraudulent charges went unpaid, a number of these customers had their phone service disconnected.  Given the age and health of many of the affected individuals, losing phone service was not just an inconvenience, but a health and safety risk.

Section 201(b) of the Communications Act of 1934 (the Communications Act) generally protects consumers from unjust and unreasonable practices by telecommunications providers, which the FCC has found to include misrepresentations about a carrier’s identity or service intended to persuade customers to change their long-distance carrier.  The FCC has also found that placing unauthorized charges on a customer’s telephone bill constitutes a prohibited “unjust and unreasonable” practice under the Communications Act.  Additionally, Section 258 of the Communications Act and Section 64.112 of the FCC’s Rules prohibit telecommunications carriers from changing a subscriber’s telephone exchange provider without prior authorization from the customer, which must be done in accordance with the FCC’s verification requirements.

To make the FCC’s enforcement efforts more effective and efficient, Section 1.17(a) of its Rules prohibits parties from providing false or misleading information to the Commission.  The FCC has found that even absent an intent to deceive, false or misleading statements may still violate its rules if provided without a reasonable basis to believe the statement is true.

In 2017, the FCC noted that a significant number of consumer complaints regarding this long-distance carrier had been received by the Commission, state regulatory agencies, the Federal Trade Commission, and the Better Business Bureau.  The complaints alleged that the carrier switched their—or in many cases their older relatives’—long distance carrier without authorization or charged them for services they did not request.  Many complaints stated that the carrier’s telemarketers misrepresented themselves by claiming affiliation with the customer’s telecommunications service provider.  Others stated that the carrier offered a nonexistent discount on the consumer’s existing phone service or discussed a fraudulent government assistance program for low-income individuals and senior citizens that it falsely claimed could lower their cost of service.  According to many of the complaints, the “slamming” and “cramming” left many elderly and vulnerable customers unable to contact caregivers due to disconnected service.  For example, one complaint filed on behalf of a 94-year-old woman emphasized that, beyond the harmful financial impact, the “slamming” and “cramming,” and subsequent termination of telephone service, had created a broader safety issue.

In April 2018, the FCC issued a Notice of Apparent Liability (NAL) proposing a $5.3 million fine for these actions.  The NAL alleged that the carrier violated the Communications Act and FCC rules by changing the selected carrier of 24 customers without complying with the required verification procedures and placed 21 unauthorized charges on customer bills.  The NAL also alleged that the carrier failed to respond fully to the FCC’s letter of inquiry and submitted false information in the form of fraudulent third-party verifications.

In response, the carrier denied the slamming, cramming, misrepresentation, and altered third-party verification claims, and challenged the validity of the evidence relied upon by the FCC.  The carrier also argued that the FCC had exceeded its authority, violated the carrier’s due process rights, and proposed an unlawful fine amount.  Finally, the carrier urged reduction of the proposed fine based on its inability to pay such an amount.  The FCC considered the carrier’s arguments but largely reaffirmed the conclusions set forth in the earlier NAL.  It did, however, decline to find that the carrier violated Section 1.17(a) of the Commission’s Rules regarding the third-party verifications submitted.  The carrier had argued that it maintained an arms-length relationship with its third-party verification provider, with no opportunity to alter or falsify recordings, and therefore had a reasonable basis for believing the recordings provided were authentic. Although the FCC expressed doubts regarding the validity of the recordings, it concluded that the carrier had a reasonable basis for believing the recordings were legitimate.

Because of this finding, the FCC reduced the fine from the originally-proposed $5.3 million to $4.1 million.  The carrier now has 30 days from release of the Order to pay the fine.  If it is not paid within that time period, the FCC noted it may refer the matter to the Department of Justice to enforce collection.

FCC Enters Consent Decree with Wireless Internet Service Provider Over Interference to FAA Systems

The FCC entered into a Consent Decree with a wireless internet service provider, concluding an investigation into the operation of unauthorized devices causing harmful interference to a Federal Aviation Administration (FAA) weather radar system.

Section 301 of the Communications Act prohibits the use or operation of any device that transmits radio signals, communications, or energy without an FCC license.  There is an exception to this general licensing requirement under Part 15 of the FCC’s Rules whereby certain low power devices that comply with established technical parameters to limit interference may operate without a license.  In particular, the FCC has set aside spectrum in the 5 GHz band for unlicensed use by Unlicensed National Information Infrastructure (U-NII) devices, commonly used for Wi-Fi and broadband internet access.  To avoid harmful interference to other nearby authorized services, the Part 15 rules require unlicensed U-NII devices to incorporate “Dynamic Frequency Selection” capability, which enables such devices to detect nearby radiofrequency devices and avoid operating on frequencies that could create interference to those devices.

As we discussed here, in May 2018, the FCC issued an initial warning to the wireless internet service provider regarding U-NII devices causing interference to a nearby doppler radar station.  In response, the provider assured the FCC that all of its devices were operating in compliance with Commission rules.  A year later, however, the FCC received a report from the FAA that the same radar station was experiencing interference from a source operating on a nearby frequency in the 5 GHz band.  In June 2019, the FCC Enforcement Bureau began investigating the interference claims and identified two U-NII devices operated by the wireless internet service provider without Dynamic Frequency Selection capabilities enabled.  Following this discovery, the Bureau instructed the provider to modify the U-NII devices to operate on a different frequency, which immediately resolved the interference.  In May 2020, the Bureau issued an NAL to the wireless provider, proposing a $25,000 fine for violations of the Part 15 rules.

In response to the NAL, the wireless internet service provider admitted that in June 2019, it was in fact operating U-NII devices in violation of the FCC’s rules, but corrected the device configurations immediately upon discovery of the issue.  The provider also informed the FCC that it had since implemented a policy to verify on a monthly basis that all of its devices are operating on the correct frequency.  Additionally, in an effort to obtain a reduction of the proposed $25,000 fine, the company submitted financial documentation demonstrating its inability to pay the proposed fine amount.

To resolve the investigation, the Bureau entered into a Consent Decree under which the company (1) admitted, for purposes of the Consent Decree, that it violated the FCC’s rules governing U-NII devices; (2) agreed to pay a reduced $11,000 penalty; and (3) agreed to implement a compliance plan to prevent future violations.

Mississippi and Michigan Radio Stations Avoid Fines, But Receive Admonishments for Failing to Timely File Their License Renewal Applications

The FCC recently canceled proposed fines against the licensees of a Michigan FM station and FM and AM stations in Mississippi for late license renewal application filings and instead admonished the stations for the violations.

Section 73.3539(a) of the FCC’s rules requires that license renewal applications be filed four months prior to the license expiration date.  The Michigan station’s license renewal application was due June 1, 2020, but was not filed until September 29, 2020, while the Mississippi stations’ applications were due February 3, 2020, but were not filed until May 20, 2020.

Under Section 1.80(b) of the FCC’s Rules, the Commission sets a base fine amount of $3,000 for failure to timely file a required form, which may be adjusted upward or downward based on consideration of the “circumstances, extent and gravity of the violation.”  Absent an explanation from the Mississippi stations regarding the late filings, the FCC last month proposed the full $6,000 fine ($3,000 for each late-filed application).  In response, the licensee argued that it was not aware of the filing deadline and therefore did not intentionally violate Section 73.3539(a) of the FCC’s Rules.  The licensee also submitted federal tax returns in support of a request to cancel the proposed fine based upon an inability to pay such an amount.

The FCC responded that licensees are responsible for complying with the Commission’s rules, and even violations resulting from inadvertent errors or a lack of familiarity with the Commission’s rules are still considered willful violations.  The FCC did, however, accept the licensee’s financial hardship showing and did not issue the proposed $6,000 fine.  The Commission instead admonished the station for willful violations of its rules.

With regard to the Michigan FM station, the FCC proposed a $3,000 fine against the Michigan School District to which the station is licensed.  In response, the School District explained that due to restrictions associated with COVID-19, the employees did not have access to the station, which is located in inside a school, from March 12, 2020 to June 24, 2020.  The licensee further noted that it mistakenly believed the license renewal application was due on July 1, rather than June 1, 2020, and thought it had timely filed a renewal application on June 29, 2020.

To complicate matters further, it turned out the licensee was mistaken in its belief that it had filed on June 29.  According to the licensee, it was not until several months later when it received an inquiry from the FCC’s Media Bureau regarding the failure to file that it discovered the application had been prepared, but not correctly filed, in the FCC’s filing system on June 29.

While the FCC noted the licensee was incorrect in its understanding of the relevant deadline, it did find that the licensee was unable to file by June 1 due to the COVID-19-related school closure.  The FCC also verified in the Commission’s licensing database that the licensee prepared a draft application dated June 29, 2020 that was never filed.  In light of the circumstances, the FCC found that, although the station’s failure to file before the June 1 deadline was due to its inability to access the station, the subsequent failure to file resulted from a misunderstanding of the Commission’s electronic filing procedures.  The FCC emphasized that such inadvertent errors still constitute willful violations of the Commission’s Rules.  Weighing the circumstances, however, the FCC cancelled the $3,000 fine, and admonished the station for failing to comply with the Commission’s rules.

A PDF version of this article can be found at FCC Enforcement ~ April 2021.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ Public Inspection Files by April 10, 2021, reflecting information for the months of January, February, and March 2021.

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 April 10, 2021, covering the period from January 1, 2021 through March 31, 2021. Continue reading →