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If there was any doubt that the late-2023 confirmation of Anna Gomez as the fifth commissioner would bring a flurry of FCC activity in 2024, the FCC has laid those questions to rest. In addition to a $150,000 good faith NAL, $500,000 sponsorship ID consent decree, $26,000 EEO report NAL, and some public file NALs, the FCC this week released two Notices of Proposed Rulemaking of potential interest to broadcast licensees.

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Bookending the Christmas weekend, the FCC’s long-awaited 2018 Quadrennial Review Report and Order was adopted on Friday, December 22 and released Tuesday, December 26.  The Commission is required by Congress to conduct a regulatory review of its broadcast ownership rules every four years and was directed by the U.S. Court of Appeals for the D.C. Circuit to conclude this particular review no later than December 27 (or to show cause why that couldn’t be done).

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This past Friday, the FCC released a Third Report and Order and Fourth Further Notice of Proposed Rulemaking (Multicast Licensing Order), setting forth rules regarding Next Gen multicast hosting arrangements and seeking further comment on ATSC 3.0-related patent issues.

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On April 4, 2020, the White House issued an Executive Order creating the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the “Committee”). The Committee, chaired by the Attorney General, includes the Secretaries of Homeland Security and Defense, and any other executive department head so designated by the President, is seen as an attempt to formalize the long-standing “Team Telecom” review process that began in the 1990s. The Committee’s stated goal is similar to Team Telecom’s, i.e., to assist the Federal Communications Commission (“FCC”) in its public interest review of national security and law enforcement concerns that may be triggered by foreign investment in the US telecommunications sector. But there may be some notable differences. Continue reading →

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More than fifteen years after the adoption of the Bipartisan Campaign Reform Act (“BCRA”) of 2002, popularly known as “McCain-Feingold,” Congress’s and the Federal Communications Commission’s interest in political broadcasting and political advertising practices remains undiminished.  Broadcast stations must meet a broad range of federal mandates, and must therefore familiarize themselves with this regulatory area, ensuring they have adequate policies and practices in place and that they monitor legislative, FCC, and Federal Election Commission developments for changes in the law.

Stations must adopt and meticulously apply political broadcasting policies that are consistent with the Communications Act and the FCC’s rules, including the all-important requirement that stations fully and accurately disclose in writing their rates, classes of advertising, and sales practices to candidates.  This information should be provided to candidates and their agents in a station’s Political Advertising Disclosure Statement.

Many of the political broadcasting regulations are grounded in the “Reasonable Access,” “Equal Opportunities,” and “Lowest Unit Charge” provisions of the Communications Act.  These elements of the law ensure that broadcast facilities are available to candidates for federal office, that broadcasters treat competing candidates equally, and that stations provide candidates with the same rates offered to their most-favored commercial advertisers during specified periods prior to an election.  As a general rule, stations may not discriminate between candidates for the same office as to station use, the amount of time given or sold, or in any other meaningful way.

These rules are enforced through fairly stringent recordkeeping requirements, with a station’s political advertising documentation required to be kept in its political file—a file that is now available online to the public as part of a station’s Public Inspection File.  Political files must contain a station’s political documentation for the past two years.  As of the publication of this Advisory, all TV political file documents going back two years and most radio political file documents going back two years are online.  However, the FCC allowed certain smaller, small market, and noncommercial radio stations a longer period of time to move their pre-March 1, 2018 political documents online.  For these stations, their political files are not required to be completely online until March 1, 2020.

Because of the transition to online political files, broadcasters must be even more diligent to ensure that all political documents are timely created and uploaded.  The past few years have seen an uptick in political complaints from watchdog organizations which now have convenient around-the-clock access to stations’ political files.  Unfortunately, many of those who have suddenly gained ready access to stations’ political files do not understand the political rules and may allege that a station’s political file is missing required information when the political file is in fact complete. It is therefore important for stations to understand their obligations so they are able to quickly respond to such allegations before they generate formal FCC complaints.  Even where the station is completely in the right, responding to FCC complaints and investigations can be expensive, and diverts the attention of station staff from operating the station and serving the public.

While this Advisory outlines the political broadcasting rules in general terms, application of the rules can be quite fact-specific and there are many additional aspects of the rules too numerous to address within this Advisory. Accordingly, stations should contact legal counsel with specific questions or problems they encounter.

The Advisory continues at 2020 Political Broadcasting Advisory.

 

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We’ve said it before, and we’ll say it again:  If you wait until the last minute to submit an online FCC filing, be prepared to bang your head against your desk while you struggle to log in to a filing system that often melts down when thousands of filers simultaneously attempt access. Fortunately, the FCC appreciates the limitations of its filing systems, and has frequently granted extensions where the system collapse was sufficiently apparent. And so it was with today’s C-Band earth station registration deadline, which the FCC announced this afternoon would be extended to October 31, 2018.

As many of our readers are aware, the FCC issued a temporary freeze earlier this year on applications for new or modified fixed satellite service (FSS) earth stations and fixed microwave stations in the 3.7-4.2 GHz band (the “C-Band”) and concurrently opened a 90-day window during which entities that own or operate existing FSS earth stations in the C-Band could file to register their earth stations or modify their current registrations.  The purpose of the filing window was to give the FCC a better idea of whether and how to open up the band to other shared uses while giving those with constructed and operational (but currently unregistered or unlicensed) earth stations an opportunity to secure some degree of interference protection as the FCC moves to open the band.  In June, the FCC extended the filing window another 90 days, to today, October 17, 2018.

Then yesterday, things got (predictably) weird as IBFS experienced a “large influx of earth station applications filed near the deadline,” and the filing system “experienced intermittent difficulties that have prevented some applicants from filing for licenses or registrations.”  In response, the International Bureau earlier today extended the filing window for an additional two weeks, to October 31, 2018.

Consider yourself warned. If you’ve got any plans this Halloween, do not wait until the (new) last day to file.  The FCC is unlikely to treat you to any further extensions.

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • FCC Cracks Down on Call Spoofing Operations with Multimillion-Dollar Fine
  • New Jersey Utility Company Investigated for Improper Use of Private Land Mobile Radio
  • FCC Issues Repeated Notices to Florida LPFM Licensee Over Transmitter Issues

Call Me Maybe? FCC Proposes $37.525 Million Fine for Illegal Spoofing Operation

In response to the growing menace of ”spoofed” calls, the FCC issued a $37.525 million Notice of Apparent Liability for Forfeiture (“NAL”) to an Arizona telemarketer alleged to have made over 2.3 million spoofed calls over the past two years.

Section 227(e) of the Communications Act (“Act”) generally prohibits “call spoofing,” the practice of causing a false number to appear on a caller ID display to disguise the caller’s identity.  Section 227(e) of the Act and Section 64.1604 of the FCC’s Rules make it unlawful to knowingly transmit misleading or inaccurate caller ID information “with the intent to defraud, cause harm, or wrongfully obtain anything of value.”  Further, the Telephone Consumer Protection Act (“TCPA”) and Section 64.1200 of the FCC’s Rules prohibit marketing calls to numbers listed in the National Do-Not-Call-Registry (“DNR”).  Consumers can add their home and mobile phone numbers to the DNR in order to avoid unwanted telemarking calls.

The FCC was tipped off to the Arizona company’s spoofing operation by a whistleblower who had formerly worked in the company’s telemarketing phone room.  According to the employee, the company purchased a call directory and plugged the directory’s numbers into a telemarketing platform that would dial the numbers.  The company then modified its caller ID information to display the phone numbers of prepaid phones it had purchased from a big box store.  To avoid suspicion, the company regularly searched the Internet for complaints associated with the prepaid phone numbers and removed from rotation any numbers that had garnered a large amount of complaints.  If a consumer tried returning a telemarketing call originating from a prepaid phone, company policy instructed employees to hang up on or otherwise avoid complaining customers.  In addition to the prepaid phones, the company also used unassigned numbers and numbers assigned to unrelated private citizens.  As an example, the NAL describes an innocent consumer whose number was spoofed by the company and who received several calls a day for months from consumers attempting to complain about the company’s calls.

The FCC began its investigation by subpoenaing the company’s call records from the telemarketing platform.  According to the NAL, the company made 2,341,125 calls using 13 separate phone numbers.  Unsurprisingly, none of the 13 numbers were actually assigned to the company.  However, the FCC was able to match these numbers to dozens of complaints filed with the Federal Trade Commission from DNR registrants who had received unwanted calls.

According to the whistleblower, the company’s illicit behavior earned it nearly $300,000 per month.  The FCC alleges that the company’s spoofing and sophisticated prepaid phone operation show the company knew that what it was doing was wrong and sought to evade law enforcement and civil suits by hiding its connection to the illegal marketing scheme.

Pursuant to Section 227(e) of the Act and Section 1.80 of the FCC’s Rules, the FCC may impose a fine of up to $11,278 for each spoofing violation.  Previously, the FCC has applied a base fine of $1,000 per call in large-scale spoofing operations.  Out of the total 2,341,125 spoofed calls, the Enforcement Bureau was able to specifically examine and confirm the nature of 37,525 calls, and thus proposed a fine of $37,525,000.

In addition to the NAL, the FCC also issued a separate Citation and Order that cites the company for violating the Telephone Consumer Protection Act, as many of the call recipients were registered with the DNR.  The FCC uncovered 45 instances where the company dialed DNR registrants; however, it may not impose a monetary fine against parties not regulated by the FCC until: (1) the FCC issues a citation to the violator; (2) the FCC provides the violator a reasonable opportunity to respond; and (3) the violator continues to engage in the cited conduct.  The Citation and Order warns the company that any future violations could result in hefty fines.

The past year has seen several enforcement actions aimed at large scale robocall and spoofing operations.  The FCC asks consumers to report any illegal calls or text messages, and advises against answering calls from unknown numbers or giving out personal information.

A Failure to Communicate: FCC Investigates New Jersey Utility Company for Private Land Mobile Radio Violations

The FCC’s Enforcement Bureau issued a Notice of Violation (“NOV”) to a large New Jersey utility company for operating its Private Land Mobile Radio (“PLMR”) in an unauthorized manner and failing to regularly transmit station identification information. 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:

Headlines:

  • International Hotel Company Agrees to $504,000 Settlement for Overlooked Wireless License Transfers
  • Media Bureau Fines AM Licensee for Years-Old Unauthorized Transfers
  • Suburban Elementary School Busted as Pirate Radio Operator

Approval Needed: International Hotel Chain Settles with the FCC for $504,000 Over Unauthorized Transfers

The FCC recently entered into a Consent Decree with a global hotel company for violating the FCC’s rules governing transfers of control.  The company admitted to transferring dozens of private wireless licenses without prior FCC approval in the midst of its multi-billion dollar acquisition of another international hotel group.

In addition to regulating the transfer of broadcast licenses, Section 310 of the Communications Act (“Act”) prohibits the transfer of control of a private wireless license holder without prior FCC approval.  Under Section 1.948 of the FCC’s Rules, parties seeking consent to a transfer of control of such a license must first file FCC Form 603 and await Commission approval before completing the transfer.

At issue in this case were the transfers of 65 wireless licenses controlled by entities owned or operated by the acquired company.  Unlike commercial wireless services such as wireless broadband, private wireless licenses are generally used for internal communications, like those associated with company operations or security.  According to the late-filed transfer applications, these wireless licenses were used for “operational efficiency and safety of employees and guests” at the company’s various properties.  Prior to the transaction, the acquired company’s employees controlled the use of the licenses as part of their regular operational duties.  Though the day-to-day use of the licenses did not change as a result of the company’s acquisition, ultimate control of the licenses did.

In February 2017, several months after the deal was completed, the hotel company voluntarily disclosed the violations to the FCC, chalking up the missing applications to “administrative oversight … during a larger transaction.”  By January 2018, applications for transfer of control of all 65 licenses were submitted to the FCC’s Wireless Bureau.  Those applications remain pending.

To resolve the FCC’s investigation of the violations, the acquiring company entered into a Consent Decree with the Commission.  Under the terms of the Consent Decree, the hotel company agreed to (1) admit liability for violations of the FCC’s unauthorized transfer rules; (2) develop and implement a compliance plan to prevent further violations of the FCC’s Rules; and (3) pay $504,000 to the United States Treasury.

Trust Issues: “Ridiculously Complicated” Estate Planning Leads to $8,000 Fine

The Media Bureau entered into a Consent Decree with the licensee of three Georgia AM radio stations to resolve an investigation into an unauthorized transfer of control of the station licenses.

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

The applications ultimately leading to the Consent Decree were filed with the FCC in March 2018, but the licensee’s problems began nearly two decades earlier when the licensee’s sole owner created an irrevocable trust and named two of his sons as co-trustees.  That same day, the FCC approved the licensee’s acquisition of the Georgia stations.  The following day, the licensee’s owner, functioning as de facto trustee of the irrevocable trust (and without his sons’ knowledge), transferred 90% of his equity in the licensee to the trust in the form of non-voting shares.  When the station acquisition was consummated a few days later, the licensee failed to report the existence of the trust to the FCC and did not subsequently report it until earlier this year.

In 2010, the trust was divided into sub-trusts for each of the father’s six children—each of whom was then unaware that they were to serve as trustee of their respective sub-trust.  Shortly before their father’s passing in 2013, the children assumed control of the overall trust (as trustees of the individual sub-trusts).  They converted the trust’s stock in the licensee to voting shares and cancelled all other shares of licensee stock, resulting in a transfer of control of the licensee to the children as trustees of the trust. 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 Proposes $235,668 Fine for Filing Untruthful Information
  • Major Phone Carrier Settles Dispute With FCC Over Rural Call Completion Issues for $40 Million
  • Repeat Pirate Nets $25,000 Fine

Tower Records: FCC Proposes Large Fine for Dozens of Falsified Tower Registrations

After a bizarre string of events involving unlit towers, falsified applications, and alleged theft, the FCC proposed a penalty of $235,668 against a Wisconsin holding company for providing false and misleading information on dozens of Antenna Structure Registration (“ASR”) applications and misleading an Enforcement Bureau agent.

Section 1.17 of the FCC’s Rules requires a party that is either (A) applying for an FCC authorization; or (B) engaging in activities that require such authorizations, to be truthful and accurate in all its interactions with the FCC.  Specifically, Section 1.17(a)(2) states that no person shall “provide material factual information that is incorrect or omit material information that is necessary to prevent any material factual statement that is made from being incorrect or misleading….”

In December 2016, the Enforcement Bureau began investigating an unlit tower in Wisconsin after the Federal Aviation Authority (the “FAA”) forwarded a complaint from a pilot who had noticed the structure.  Unlit towers pose a serious danger to air navigation.  In the midst of the investigation, the tower’s ASR information was changed to show a new company had taken control of the tower.  When an FCC investigator reached out to the newly registered owner, the company’s CEO stated that his company had recently acquired the tower, knew of the lighting problem, and would make repairs as soon as the weather permitted.  In the meantime, the company also began changing the registration information for other towers, requested flight hazard review from the FAA for some of these towers, and filed an ASR application for construction of a new tower in Florida.

Several months later, the original owner of the unlit tower informed the FCC that the other company was not actually the owner and that the imposter company’s “CEO” had improperly changed the ownership information for several sites in the ASR system.  The true owner also claimed that the alleged fraudster had changed locks and stolen equipment from several of the real owner’s towers—including the new lighting equipment that the original owner bought to repair the extinguished tower lighting.

In response, the Enforcement Bureau sent a Letter of Inquiry (“LOI”) to the claimed CEO’s physical and email addresses seeking more information about his various applications.  To date, the Bureau has not received any response.

In a Notice of Apparent Liability (“NAL”), the Enforcement Bureau determined that the CEO’s company became subject to Section 1.17 when it applied for the Florida tower registration, and also that the CEO was engaging in activities that require FCC authorization.  According to the NAL, the CEO apparently provided false and misleading information on 42 separate change in ownership applications and communicated false information to the investigating agent.  According to the Enforcement Bureau, the company also violated Section 403 of the Communications Act (the “Act”) by failing to respond to the LOI.

Under its statutory authority to penalize any party that “willfully or repeatedly fails to comply” with the Act or the FCC’s Rules, the FCC may issue up to a $19,639 forfeiture for each violation or each day of a continuing violation.  Accordingly, the FCC proposed a fine of $19,639 for each of the 10 apparently false applications filed in the past year, $19,639 for the company’s alleged misleading statements to the investigating agent, and an additional $19,639 for its failure to respond to the FCC’s questions, for a total of $235,688.

Missed Connections: Major Phone Carrier Agrees to Pay $40 Million After Investigation Into Rural Call Completion Issues

The FCC entered into a Consent Decree with a major phone carrier after an investigation into whether the carrier violated the Commission’s Rural Call Completion Rules.

According to the FCC, consumers in low-population areas face problems with long-distance and wireless call quality.  In an effort to address these problems, the FCC has promulgated a series of directives that prohibit certain practices it deems unreasonable and require carriers to address complaints about rural calling (“Rural Call Completion Rules”).

In 2012, the FCC’s Wireline Competition Bureau determined that a carrier may be liable under Section 201 of the Act for unjust or unreasonable practices if it “knows or should know that calls are not being completed to certain areas” and engages in practices (or omissions) that allow these problems to continue.  This includes (1) failure to ensure that intermediate providers (companies that connect calls from the caller’s carrier to the recipient’s carrier) are performing adequately; and (2) not taking corrective action when the carrier is aware of call completion problems. Continue reading →

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Each full power and Class A TV station being repacked must file its next Transition Progress Report with the FCC by April 10, 2018. The Report must detail the progress a station has made in constructing facilities on its newly assigned channel and in terminating operations on its current channel during the months of January, February, and March 2018.

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