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:
- Alabama FM Licensee Admits to On-Air Contest and Unauthorized Transfer of Control Violations
- Silicon Valley Start-Up Agrees to Pay $900,000 Penalty for Unauthorized Satellite Launches
- Michigan AM Licensee Faces Proposed $18,000 Fine and Reduced License Term for a Variety of Violations
No-Win Situation: FM Licensee Settles with FCC Over On-Air Contest and Unauthorized Transfer of Control Violations
The FCC’s Enforcement Bureau entered into a Consent Decree with the licensee of an Alabama FM radio station for violating the FCC’s rules governing on-air contests and transfers of control.
The FCC regulates licensee-conducted contests in order to protect the public against deceptive and misleading practices. Section 508 of the Communications Act (“Act”) prohibits a licensee from knowingly deceiving the public by manipulating or predetermining the results of a contest. Section 73.1216(a) of the FCC’s Rules requires a licensee to “fully and accurately disclose the material terms of the contest” and the contest must be conducted in accordance with those announced terms.
Section 310 of the Act and Section 73.3540 of the FCC’s Rules prohibit the transfer of control of a broadcast license without prior FCC approval. A de facto transfer occurs when a licensee no longer retains ultimate control over vital aspects of a station’s operations, including its programming, personnel, and finances.
In August 2016, the FCC received a complaint alleging that the licensee “prematurely ended” an on-air contest and failed to award the advertised prizes. According to the complaint, the station instead kept the prizes and provided them to its own employee.
The Enforcement Bureau responded nearly a year later by issuing a Letter of Inquiry (“LOI”) to the licensee seeking information about the contest. In its response, the licensee denied any knowledge of the contest nor was it was able to find any records related to the contest. According to the Consent Decree, the licensee’s professed lack of knowledge about the contest “raised questions about the Licensee’s control over the Station.” As a result, in July 2018, the Enforcement Bureau issued a supplemental LOI to the licensee investigating the apparent de facto unauthorized transfer of control to the third party that conducted the contest, who had a time brokerage agreement with the station. According to the FCC, it had not approved, nor had the licensee applied for, a transfer of control of the license.
To resolve the FCC’s investigation, the licensee entered into a Consent Decree with the Enforcement Bureau. Under the terms of the Consent Decree, the licensee agreed to (1) admit liability for violations of the FCC’s contest and unauthorized transfer of control rules; (2) pay a $12,000 civil penalty; and (3) develop and implement a compliance plan to prevent further violations of the FCC’s Rules.
Space Oddity: Start-Up Agrees to Pay $900,000 to Settle Investigation into Unauthorized Satellite Operations
After a bizarre string of events involving unauthorized communications satellites, space launches from India, and experimental weather balloons over California, the FCC entered into a Consent Decree with a Silicon Valley satellite start-up.
Section 301 of the Act and Section 25.102 of the FCC’s Rules prohibit the operation of any device for the transmission of energy, communications, or signals by space or earth stations unless in accordance with an FCC authorization. Section 25.113 of the FCC’s Rules requires FCC authorization before deployment and operation of a space satellite. Continue reading →