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Headlines:

  • FCC Begins to Move on Pending Video News Release Complaints
  • Failure to Monitor Tower Lighting Results in $12,000 Penalty

Video News Releases Garner $4,000 Fines for Two Television Broadcasters
After a flurry of complaints from advocacy groups a few years ago raised the issue at the FCC, the Commission has been pondering how to treat Video News Releases (VNRs) with respect to its sponsorship identification rule. The result has been a growing backlog of enforcement investigations involving VNRs. However, the release of two decisions proposing fines for stations that aired all or part of a VNR without identifying the material on-air as being sponsored appears to indicate that the dam is about to break. In its first VNR enforcement actions in years, the FCC fined two unrelated television stations $4,000 each for violating the sponsorship identification requirements found in Section 317 of the Communications Act and Section 73.1212 of the FCC’s Rules.

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As we all know, unsolicited spam email can be annoying and intrusive. In 2003, Congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act to curb spam. As required by the Act, the FTC and FCC adopted rules that prohibit sending unwanted commercial messages without prior permission. Among other things, the CAN-SPAM Act makes it “unlawful for any person to initiate the transmission, to a protected computer, of a commercial electronic mail message, or a transaction or relationship message, that contains, or is accompanied by, header information that is materially false or materially misleading.”

On March 28, 2011, a U.S. District Court in California held for the first time that the CAN-SPAM Act’s restrictions on the transmission of unsolicited commercial e-mail extends beyond traditional e-mail to include communications to other electronic medium, including Facebook friends’ walls, news feeds, and home pages. As John Nicholson of Pillsbury’s Global Sourcing group describes in detail in a recent Client Alert found here, the ruling is the most expansive judicial interpretation so far regarding the types of messages that fall within the scope of the CAN-SPAM Act.

John’s Client Alert is definitely worth a read for companies using social media in marketing. As John points out, companies should verify that they (and any marketing services they engage) comply with CAN-SPAM’s requirements for commercial messages sent via social media platforms.

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4/7/2011
On March 28, 2011, the U.S. District Court for the Northern District of California held in Facebook, Inc. v. MaxBounty, Inc.< sup>1 that messages sent by Facebook users to their Facebook friends’ walls, news feeds or home pages are “electronic mail messages” under the CAN-SPAM Act. The court, in denying MaxBounty’s motion to dismiss, rejected the argument that CAN-SPAM applies only to traditional e-mail messages. The ruling is the most expansive judicial interpretation to date of the types of messages falling within the purview of the CAN-SPAM Act. While the court did not address the underlying merits of the CAN-SPAM claims, companies using social media in marketing should verify that they (and any marketing services they engage) comply with CAN-SPAM’s requirements for commercial messages sent via social media platforms.

MaxBounty is an advertising and marketing company that uses a network of content-producing publishers to drive traffic to its customers’ websites. MaxBounty acts as an intermediary between its network of publishers (advertisement content creators) and its customers (third-party advertisers).

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Ever since Time Warner Cable released an app that allows users to watch two or three dozen cable channels on iPads we’ve been barraged by press reports of litigation and plans of other multichannel providers to launch similar services. Cablevision has announced it’s launching a similar app that lets subscribers watch their entire channel lineup on an iPad.

Suddenly cable and satellite companies are rushing to review their programming and retransmission deals to figure out what rights they have obtained, while programmers frantically review distribution agreements to see what rights they may have given away. We can find a few lessons about retransmission consent agreements in the App Flap, but let’s save those for another day.

What this really comes down to is whether the iPad apps qualify as “cable system” distribution, Internet distribution, or something else. Most programmers (and a few careful broadcasters) specifically carve out Internet distribution when signing carriage agreements – existing deals cover distribution for in-home viewing over cable and DBS systems. Internet distribution rights are negotiated separately, if at all. But many broadcasters who signed MSO form retrans agreements may have given away a lot more than they intended to.

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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:

  • Florida FM Translator Fined $13,000 for Unauthorized Operations
  • Latest Public Inspection File Violation Nets Upwardly Adjusted Fine
  • Failure to Monitor Inactive Tower Results in $6,000 Penalty

Failure to Operate as Authorized Costs Florida Broadcaster an Additional $4,000

A recent FCC Notice of Apparent Liability (“NAL”) for $13,000 against a Florida broadcaster serves as a costly reminder that stations must operate in accordance with the FCC’s Rules, and more notably, as specifically authorized in their station license. According to the NAL, the Florida broadcaster failed to heed a verbal warning from Tampa field agents that its station was operating beyond the technical parameters of its authorization. The NAL stated that the Tampa field agents, pursuant to an investigation and following two complaints, took field strength measurements on five separate occasions and visited the station’s transmitter site on two separate occasions over approximately 11 months between October 2009 and September 2010. Field measurements undertaken in October 2009 and early February 2010 indicated that the station was operating with a power level well in excess of its authorization in violation of Section 74.1235(e) of the FCC’s Rules, which states, “[i]n no event shall a station authorized under this subpart be operated with a transmitter power output (TPO) in excess of the transmitter certificated rating and the TPO shall not be more than 105 percent of the authorized TPO.”

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3/18/2011
The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to their respective license renewal filing deadlines.

Noncommercial educational radio stations licensed to communities in Texas, and noncommercial television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, and Tennessee, must file their Biennial Ownership Reports by April 1, 2011.

In 2009, the FCC issued a Further Notice of Proposed Rulemaking seeking comments on, among other things, whether the Commission should adopt a single national filing deadline for all noncommercial radio and television broadcast stations like the one that the FCC has established for all commercial radio and television stations. That proceeding remains pending without decision. As a result, noncommercial radio and television stations continue to be required to file their biennial ownership reports every two years by the anniversary date of the station’s license renewal application filing.

A PDF version of this article can be found at Biennial Ownership Reports are due by April 1, 2011 for Noncommercial Educational Radio Stations in Texas, and for Noncommercial Television Stations in Delaware, Indiana, Kentucky, Pennsylvania and Tennessee.

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The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ local Public Inspection Files by April 10, 2011, reflecting programming aired during the months of January, February and March, 2011.

Statutory and Regulatory Requirements

As a result of the Children’s Television Act of 1990 and the FCC Rules adopted under the Act, full power and Class A television stations are required, among other things, to: (1) limit the amount of commercial matter aired during programs originally produced and broadcast for an audience of children 12 years of age and younger; and (2) air programming responsive to the educational and informational needs of children 16 years of age and younger.

For all full-power and Class A television stations, website addresses displayed during children’s programming or promotional material must comply with a four-part test or they will be counted against the commercial time limits. In addition, the contents of some websites whose addresses are displayed during programming or promotional material are subject to host-selling limitations. The definition of commercial matter now includes promos for television programs that are not children’s educational/informational programming or other age-appropriate programming appearing on the same channel. Licensees must prepare supporting documents to demonstrate compliance with these limits on a quarterly basis.

Specifically, stations must: (1) place in their public inspection file one of four prescribed types of documentation demonstrating compliance with the commercial limits in children’s television, and (2) complete FCC Form 398, which requests information regarding the educational and informational programming aired for children 16 years of age and under. Form 398 must be filed electronically with the FCC and placed in the public inspection file. The base forfeiture for noncompliance with the requirements of the FCC’s Children Television Programming Rule is $10,000.

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The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ local public inspection files by April 10, 2011, reflecting information for the months of January, February and March, 2011.

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 a 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 station compliance discussed below.

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This Broadcast Station EEO Advisory is directed to radio and television stations licensed to communities in: Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, and Texas, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Introduction

April 1, 2011 is the deadline for broadcast stations licensed to communities in the States/Territories referenced above to place their Annual EEO Public File Report in their public inspection files and post the report on their website, if they have one. In addition, certain of these stations, as detailed below, must electronically file their EEO Mid-term Report on FCC Form 397 by April 1, 2011.

Under the FCC’s EEO rule, all radio and television station employment units (“SEUs”), regardless of staff size, must afford equal employment 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, all Nonexempt SEUs must (i) broadly and inclusively disseminate information about every full-time job opening except in exigent circumstances, (ii) send notifications of full-time job vacancies to referral organizations that have requested such notification, and (iii) earn a certain minimum number of EEO credits, based on participation in various non-vacancy-specific outreach initiatives (“Menu Options”) suggested by the FCC, during each of the two-year segments (four segments total) that comprise a station’s eight-year license term. These Menu Option initiatives include, for example, sponsoring job fairs, attending job fairs, and having an internship program.

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3/10/2011
Beginning later this year, ICANN is expected to accept applications for new generic domain suffixes for industries, interests and communities, such as “.bank,” “.movie” or “.music.” In addition to the generic terms, this round also includes the potential for various geographic tags that are not country codes (e.g., “.nyc” or “.andes”), brands (“.pillsbury”) as well as non-Latin characters (e.g., “中 and 国”). ICANN is expecting to approve between 200 and 500 new gTLDs in this round and to have new application rounds approximately every two years.

For organizations considering applying for a gTLD, the process will be expensive. The initial application fee is $185,000 and ICANN also requires the provision of a bond or irrevocable line of credit equal to the operating costs to keep a domain in service for three years. Estimates of the operating costs for the first few years could be several hundred thousand dollars or more, depending on the scale of use of the domain and the services offered. (Note, the bond/line of credit would likely be for a smaller amount, as it would only have to cover the most basic domain-name services.) It will only make sense if there is a clear “business plan” for use of the domain to advance short-term or long-term goals of the brand, industry, profession, or field represented.

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