Articles Posted in FCC Enforcement

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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:

Headlines:

  • Alaskan Licensee Faces Fines Over FM Station Silences
  • Enforcement Bureau Issues Consent Decrees for LED Billboard Violations
  • Tower Owner Hit for Unlit Structure

Cold Justice: Media Bureau Responds to Alaska Licensee’s Applications With Multiple Fines

The FCC’s Media Bureau issued two Notices of Apparent Liability (“NAL”) to an Alaskan licensee for repeated unauthorized silences and reduced power operations on its FM station and FM translator stations.  At the same time, the Media Bureau found an assignment application for one of the translators to be defective, and renewed the FM station’s license for only an abbreviated two-year term.

The FCC sets minimum operating schedule requirements for broadcast stations, and requires a station to transmit according to the “modes and power” specified by its license.  A station that expects to remain off-air for more than 30 days must request permission from the FCC.  However, Section 312(g) of the Communications Act of 1934 (“Act”), provides that a station’s license automatically expires if the station “fails to transmit broadcast signals for any consecutive 12-month period.”

In this case, the licensee originally applied for renewal of an FM license and three FM translator licenses in 2013.  The licensee also filed an assignment application to sell one of the translators up for renewal.

Several months later, another Alaskan broadcaster filed informal objections against all of the applications, alleging, among other things, that: (1) the applicant was delinquent on a debt from a previous enforcement action; (2) the applicant had failed to pay application fees for the translator license renewal applications; (3) all of the stations had been operating at low power or were off-air for extended periods of time (some for as long as 12 consecutive months); and (4) the assignment application was defective.  The objecting broadcaster also claimed the applicant lacked the character qualifications to hold a license.

The Media Bureau quickly dismissed various other claims made by the objecting broadcaster, including that (1) the licensee had not complied with the Emergency Alert System rules; (2) the licensee had violated the main studio rule; (3) the licensee had engaged in an unauthorized transfer of control; and (4) the proposed assignee did not actually exist.

In sorting out the remaining objections, the Media Bureau first determined that the applicant was not delinquent in its payments to the FCC.  Though the licensee had an unpaid Notice of Apparent Liability for Forfeiture from 2009, a licensee is not indebted to the FCC until (1) the fine has been partially paid, or (2) a court has ordered payment.  According to the FCC, the forfeiture never became payable because the license at the heart of the enforcement action had been cancelled shortly after issuance of the NAL and the Media Bureau therefore never issued a Forfeiture Order.

The Media Bureau did, however, find that the licensee had failed to pay license renewal application fees for the translator stations.  Though the applicant claimed that the translators in question were noncommercial educational (“NCE”) broadcast stations and thus exempt from the fee, the Media Bureau determined that the stations being retransmitted by the translators were commercial stations at the time of filing, and thus required a fee.  The Media Bureau also dismissed the assignment application, finding it procedurally defective because a single individual signed for both the assignor and assignee, in contravention of the FCC’s Rules.  Finally, the Media Bureau rejected the character claims, determining that the objecting licensee had failed to make a prima facie case for its claims of false certifications and false statements to the FCC.

Regarding the issue of whether the stations were silent or operated at variance from their licenses, the Media Bureau found that all of the stations were repeatedly silent without authorization for extended periods of time.  Although several of these silent periods lasted 364 days, none of the stations remained silent for the continuous 12-month period required for automatic expiration.  The Media Bureau did, however, find that the FM station had operated at reduced power for much of the most recent license period and beyond without authorization to do so.

Section 309(k) of the Act provides several criteria the FCC must consider when reviewing license renewal applications. The FCC will grant such an application if: (1) “the station has served the public interest, convenience, and necessity;” (2) the licensee has not committed any serious violations of the Act or the FCC’s Rules; and (3) the licensee has not committed any other violations of the Act or the FCC’s Rules that, taken together, would indicate a pattern of abuse.

Though the Media Bureau granted all of the translator license renewal applications, it proposed a $10,000 fine for discontinuing operations on the translator stations on five different occasions, a $20,000 fine for the FM station’s operation at reduced power without authorization, and mandated that the licensee pay the translator stations’ missing application fees along with a 25% late payment penalty.

The Media Bureau proceeded to note that the licensee’s failure to seek or maintain authorization for many of the FM station’s silent and reduced power periods constituted a “pattern of abuse” of the FCC’s Rules and that the FM station’s operational record failed to serve the “public interest, convenience, and necessity” during the most recent license term.  As a result, the Media Bureau granted a short-term renewal of the FM station’s license, providing only a two-year renewal rather than the standard eight year license term.

LED Astray: FCC Settles Multiple Investigations into Noncompliant Digital Billboards

The FCC entered into four separate consent decrees with LED sign manufacturers and marketers in the course of a single week after investigating whether the companies violated its equipment authorization rules.

Section 302(b) of the Communications Act restricts the manufacture, import, sale, or shipment of devices capable of causing harmful interference to radio communications.  To this end, the FCC regulates devices that emit radio frequency energy (“RF device”), including those that unintentionally generate signals that can interfere with other spectrum users.  RF devices must adhere to strict technical standards and various labeling and marketing requirements. 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:

  • Media Bureau Hits Michigan Radio Station for Low Power Snafu
  • Online Retailer Faces $2,861,128 Forfeiture for Selling Unauthorized Drone Parts
  • Enforcement Bureau Issues Advisory on Drone Accessories

Weathering the Storm: Media Bureau Proposes Fine for Botched Low Power Operation

The FCC’s Media Bureau issued an $18,000 Notice of Apparent Liability for Forfeiture (“NAL”) to a Michigan radio licensee accused of omitting material facts from an FCC application and operating its station at variance from its license.

Under Section 312(g) of the Communications Act of 1934 (“Act”), a broadcast station’s license automatically expires after the station fails to broadcast for 12 consecutive months.  Section 73.1745(a) of the FCC’s Rules requires a station to broadcast according to the “modes and power” specified by its license, and Section 73.1765 permits licensees to request special temporary authority (“STA”) to operate at variance from their license for a limited time.

The licensee originally applied for renewal of its license in May of 2012.  Section 309(k) of the Act provides several criteria that the FCC must consider when reviewing license renewal applications.  The FCC will grant an application if: (1) “the station has served the public interest, convenience, and necessity;” (2) the licensee has not committed any serious violations of the Act or the FCC’s Rules; and (3) the licensee has not committed any other violations of the Act or the FCC’s Rules that, taken together, would indicate a pattern of abuse.

In February 2015 (while the renewal application was still pending), the licensee requested an STA to remain silent, claiming that his facilities would require significant repair after a broken water main flooded the studio.

The following month, the licensee of several religious broadcast stations filed an objection to the license renewal application, alleging that the broadcaster was “untruthful” about the circumstance of the flood.  It also claimed that the licensee had broken a contract between the two parties, “attempted to extort money” from a Texas broadcaster, and failed to pay money to another broadcaster.

In May 2016, the Media Bureau inquired into the length of time the licensee’s station had been silent.  The licensee responded that the station had returned to air shortly after the STA was filed, but a “clerical error” had prevented the licensee from notifying the FCC.  As evidence, the licensee provided sworn declarations, as well as bills and ad orders for another one of the licensee’s stations.  The licensee also indicated that the station was operating with a lower-powered transmitter than specified in the license due to a lightning-related power surge the previous year.

Unsatisfied, the Media Bureau sent the licensee a second letter demanding more information about the station’s operations.  The licensee responded with more information relating to the station in question, including a letter from an engineer which confirmed that while the station was licensed to operate at 50 kW, it was only operating at 1.4 kW.

That same day, the licensee requested an STA to operate at that reduced power level, stating that the station was “currently operating at the reduced power level of 1.4 kW” and needed to continue at this reduced power for the next 180 days.  The requested STA was not granted until over a year later.

The Media Bureau ultimately concluded that the station was operating with a “non-conforming” transmitter and at significant variance from its 50 kW authorization.  The Bureau also found that the licensee failed to timely request an STA to operate at that reduced power, and failed to disclose a material fact in its second STA request when it said that it was “currently operating” at the lower level despite having operated at that reduced power for over a year.  The NAL also indicated that it was “at best misleading” to suggest that the station would be back to full power within 180 days.  Section 1.17(a)(1) of the FCC’s Rules prohibits individuals from intentionally providing incorrect “material factual information” or intentionally omitting “material information that is necessary to prevent any material factual statement that is made from being incorrect or misleading.”

As a result, the Media Bureau proposed: (1) a fine of $10,000 for operating without the appropriate authorization for the service; (2) an additional $3,000 fine for failing to file a required form; and (3) a $5,000 fine for failing to disclose a material fact in the STA request.

Fortunately for the licensee, the Media Bureau did not find these acts to be “serious violations” or a pattern of abuse, and therefore granted the station’s license renewal application in a separate action.  In doing so, the Media Bureau denied the religious licensee’s objections, noting that the FCC does not adjudicate private contractual disputes.

Flight Delay: Online Drone Retailer Dinged for Marketing Dozens of Noncompliant Drone Parts

The FCC proposed a $2,861,128 penalty against a group of commonly-owned companies in the United States and Hong Kong for marketing unauthorized drone equipment.

Pursuant to Section 302 of the Act, the FCC regulates radio-frequency energy-emitting devices (“RF” devices) that can potentially interfere with radio communications.  The FCC sets limits on a device’s spurious emissions, transmission power, and on which bands it may operate.  Generally, noncompliant devices may not be imported, marketed or sold in the United States. 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:

  • Louisiana Class A TV Station Settles Online Public File Violations for $50,000 Ahead of License Renewal
  • FCC and Michigan Teenager Enter Into Consent Decree After Misuse of Public Safety Communications System
  • Missouri Telco Agrees to $16,000 Settlement Over Unauthorized Transfers

When Violations Accumulate: Online Public File Violations Lead to $50,000 Settlement with the FCC

The FCC recently entered into a Consent Decree with a Louisiana Class A TV station licensee to resolve an investigation into the station’s failure to comply with its online Public Inspection File obligations.

Section 73.3526 of the FCC’s Rules requires licensees to timely place certain items in their online Public Inspection File relating to a station’s programming and operations.  For example, Section 73.3526(e)(11)(i) requires stations to place an issues/programs list in their Public Inspection File each quarter.  That document must list programs aired during the preceding quarter that are responsive to issues identified by the station as important to its community.  Section 73.3526(e)(11)(ii) requires broadcasters to quarterly certify their compliance with the commercial limits on children’s television programming.

Also on a quarterly basis, Section 73.3526(e)(11)(iii) requires stations to file a Children’s Television Programming Report detailing their efforts to air programming serving the educational and informational needs of children.  Section 73.2526(e)(17) similarly requires Class A TV stations to provide documentation demonstrating continued compliance with the FCC’s eligibility and service requirements for maintaining their Class A status.

When the broadcaster filed its license renewal application in February 2013, it disclosed that it had failed to comply with certain Public File requirements during its most recent license term.  Over the next year and a half, the FCC sent letters to the broadcaster requesting that it (1) upload the missing and late-filed documents and (2) provide an explanation for its failure to comply with the Rules.  The FCC did not receive a response until, in 2015, the broadcaster uploaded the required documents to its online Public File.

The broadcaster subsequently admitted that, since 2005, it had not prepared and would be unable to recreate 16 quarters worth of issues/programs lists.  The broadcaster also stated that it had failed to timely file dozens of other issues/programs lists, Class A certifications, Children’s Television Programming Reports, and children’s programming commercial limits certifications.

Under the terms of the Consent Decree, the broadcaster agreed to (1) admit its violations of the Rules; (2) pay a $50,000 civil penalty to the United States Treasury; and (3) implement and maintain a compliance plan to avoid future violations.  The compliance plan must remain in effect until the FCC finalizes its review of the broadcaster’s next license renewal application.  In return for the station’s timely payment, the FCC will end the investigation and grant the station’s pending license renewal application for a term ending in June 2021.

The next application cycle for broadcast license renewals begins in June 2019, and the FCC’s license renewal application form requires stations to certify that their Public Inspection File has been complete at all times during the license term, in compliance with Section 73.3526 (or Section 73.3527 in the case of noncommercial stations).

As the last radio stations moved their Public Files online in March of this year, missing and late-filed documents now can be easily spotted by the FCC, increasing the likelihood of penalties not just for Public File violations, but for falsely certifying Public File compliance in the license renewal application.  With that in mind, the FCC recently encouraged licensees to address Public File compliance issues as soon as possible to reduce the impact on upcoming license renewals.

Sounds Like Teen Spirit: Traffic Stop Results in Michigan Teenager’s Consent Decree for Misuse of a Public Safety Network

The Enforcement Bureau entered into a Consent Decree with a 19-year old amateur radio licensee who made unauthorized radio transmissions on the Michigan Public Safety Communications System (MPSCS).  The agreement concludes an investigation that began when Michigan State Police discovered a cloned radio device during a routine traffic stop.

Section 301 of the Act prohibits the transmission of radio signals without prior FCC authorization, Section 333 of the Act prohibits willful or malicious interference with licensed radio communications, and Section 90.20 of the Rules establishes the requirements to obtain authorization to use frequencies reserved for public safety uses.  In addition, Sections 90.403, 90.405, and 90.425 of the Rules set operating requirements for using these public safety frequencies. 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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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 special issue takes a look at the government’s renewed efforts to scuttle Pirate Radio operations.

Since the government first began regulating the airwaves, it has struggled to eliminate unlicensed radio operators.  In its latest effort, the FCC is taking a hardline approach to this illegal behavior and is partnering with local and federal law enforcement, as well as Congress, to accomplish the task. While Chairman Pai has made clear that pirate radio prosecutions are once again a priority at the FCC, it is Commissioner O’Rielly who has been the most vocal on this front, calling for more aggressive action against unauthorized operators.  The continued prevalence of pirate radio operations has been chalked up to several factors, including insufficient enforcement mechanisms and resources, the procedural difficulties in tracking down unregulated parties, and lackadaisical enforcement until recently. Regulators and broadcast industry leaders have also expressed frustration with the whack-a-mole nature of pirate radio enforcement—shutting down one operation only to have another pop up nearby.

Real Consequences

Congress has also begun to take an interest in the issue, with the House Subcommittee on Communications and Technology holding a hearing last week discussing the subject.  One of the witnesses was David Donovan, president of the New York State Broadcasters Association.  In his testimony, he listed numerous risks that unlicensed operations present to the public, including failure to adhere to Emergency Alert System rules and RF emissions limits (which can be critically important where a pirate’s antenna is mounted on a residential structure).  Pirate operators also create interference to other communications systems, including those used for public safety operations, while causing financial harm to legitimate broadcast stations by diverting advertising revenue and listeners from authorized stations.

Despite these harms, pirate operations continue to spread.  This past month, the FCC issued a Notice of Unlicensed Operation (“NOUO”) to a New Jersey individual after the FCC received complaints from the Federal Aviation Administration (“FAA”) that an FM station’s broadcasts were causing harmful interference to aeronautical communications operating on air-to-ground frequencies.  FCC agents tracked the errant transmissions to the individual’s residence and confirmed that he was transmitting without authorization.

Days later, the FCC issued an NOUO to another New Jersey resident who was transmitting unlicensed broadcasts from a neighborhood near Newark Airport.  Once again, FCC agents were able to determine the source of the signal and found that the property owner was not licensed to broadcast on the frequency in question.

Continue reading →

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This past Friday, the US Court of Appeals for the District of Columbia Circuit released its long-awaited decision in ACA International et al. v. FCC, a case involving the Telephone Consumer Protection Act (TCPA) that has significant implications for any business contacting consumers by telephone or text. The decision arises out of challenges to an omnibus Declaratory Ruling and Order released by the FCC in July of 2015, which itself was responding to requests for exemption from, or clarification of, the FCC’s TCPA rules, especially the more stringent FCC rules that took effect on October 16, 2013. In the Declaratory Ruling and Order, the FCC adopted a very expansive interpretation of the TCPA, exacerbating, rather than alleviating, long-standing litigation risks that many companies face under the TCPA.

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 Forfeitures Against South Carolina Stations for Failure to Maintain Public Inspection File
  • Noncommercial Station and FCC Settle Dispute Over Promotional Announcements
  • Brooklyn-based Bitcoin Miner Warned Over Harmful Interference
  • FCC Issues Notice to Security Camera Manufacturer for Device ID Violations

FCC Proposes Fine Against Licensee of South Carolina Stations for Failure to Maintain Complete Public Files

In two separate Notices of Apparent Liability for Forfeiture (“NALs”) released on the same day, the FCC found two commonly owned radio stations apparently liable for repeated violations of its public inspection file rule.

Section 73.3526 of the FCC’s Rules requires stations to maintain a public inspection file that includes various documents and items related to the broadcaster’s operations.  For example, subsection 73.3526(e)(11) requires TV stations to place in their public inspection file Quarterly Issues/Programs Lists describing the “programs that have provided the station’s most significant treatment of community issues during the preceding three month period.”

In their respective license renewal applications, the stations disclosed that they had failed to locate numerous Quarterly Issues/Programs Lists from the 2003 to 2010 time period.  According to the licensee, the gaps in its reporting were due to several personnel changes at all levels of the stations as well as computer and software changes made over the past ten years.

Between the two NALs, the FCC found a total of 38 missing Lists (21 for one station, and 17 for the other station), which it considered a “pattern of abuse.” Pursuant to the FCC’s forfeiture policies and Section 1.80(b)(4) of its Rules, the base forfeiture for a violation of Section 73.3526 is $10,000.  The FCC can adjust the forfeiture upwards or downwards depending on the circumstances of the violation.  Here, the FCC proposed a $12,000 forfeiture in response to the station with 21 missing Lists and a $10,000 forfeiture for the station with 17 missing Lists.  Visit here to learn more about the FCC’s Quarterly Issues/Programs List requirements.  For information on maintaining a public inspection file, check out Pillsbury’s advisory on the topic.

“Ad” Nauseam: FCC Resolves Investigation Into Underwriting Rules Violation

The FCC entered into a Consent Decree with the licensee of two noncommercial educational (“NCE”) radio stations in Arizona and California after receiving complaints that the stations aired commercial advertising in violation of the Communications Act and the FCC’s Rules (together, the “Underwriting Laws”).

Section 399B of the Communications Act of 1934 prohibits noncommercial stations from making their facilities “available to any person for the broadcasting of any advertisement.” Section 73.503(d) of the FCC’s Rules prohibits an NCE station from making promotional announcements “on behalf of for profit entities” in exchange for any benefit or payment.  Such stations may, however, broadcast “underwriting announcements” that identify but do not “promote” station donors.  Such identifications may not, among other things, include product descriptions, price comparisons, or calls to action on behalf of a for-profit underwriter.  The FCC recognizes that it is “at times difficult to distinguish between language that promotes versus that which merely identifies the underwriter,” and expects licensees to exercise good faith judgment in their underwriting messages.

In response to complaints from an individual who alleged that the stations had repeatedly violated the Underwriting Laws, the FCC sent the licensee multiple letters of inquiry regarding questionable underwriting messages between August 2016 and March 2017.  According to the FCC, the licensee did not dispute many of the facts in the letters, and the parties entered into the Consent Decree shortly thereafter.  Under the Consent Decree, the licensee (1) admitted that it violated the Underwriting Laws; (2) is prohibited from airing any underwriting announcement on behalf of a for-profit entity for one year; (3) must implement a compliance plan; and (4) must pay a $115,000 civil penalty.

Brooklyn Bitcoin Mining Operation Draws FCC Ire Over Harmful Interference

The FCC issued a Notification of Harmful Interference (“Notification”) to an individual it found was operating Bitcoin mining hardware in his Brooklyn, New York home.

Section 15 of the FCC’s Rules regulates the use of unlicensed equipment that emits radio frequency energy (“RF devices”), a broad category of equipment that includes many personal electronics, Bluetooth and WiFi-enabled devices, and even most modern light fixtures.  Such devices must not interrupt or seriously degrade an authorized radio communication service.  The FCC’s rules require a device user to cease operation if notified by the FCC that the device is causing harmful interference. 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:

  • FCC Revokes Licenses After Alleged Failure to Report Felony Drug Conviction
  • Car Dealership Receives Citation for Interference-Creating Outdoor Lighting
  • License Renewal Hearing Ordered for Near-Silent Virginia Stations
  • FCC Commissioner Criticizes Local Colorado News Site Over Pirate Radio Station Article

LA Business Stripped of Licenses for Alleged Misrepresentations About Drug Conviction

In a rare Order of Revocation, the FCC revoked all of a Los Angeles communication equipment provider’s licenses after the licensee failed to respond to an inquiry into whether its manager lied about a 1992 felony drug conviction in dozens of Commission filings.

The Order rescinds the licensee’s eleven Private Land Mobile Radio (“PLMR”) and microwave station licenses and dismisses all of the licensee’s pending modification and license renewal applications.

Section 312(a) of the Communications Act authorizes the FCC to revoke a license “for false statements knowingly made … in the application” or when it finds that conditions “warrant it in refusing to grant a license[.]”  Pursuant to Section 1.17(a)(1) of the FCC’s Rules, no person may “intentionally provide material factual information that is incorrect or intentionally omit material information that is necessary to prevent any material factual statement that is made from being incorrect or misleading.”  The FCC heavily weighs any misrepresentation or lack of candor when it determines whether a party is fit to become or remain a licensee.

The FCC began looking into the licensee’s fitness in 2015, when a different Los Angeles business alleged that the licensee had knowingly lied on an at least one FCC application when it replied “No” to a question that asked whether any of the licensee’s controlling parties had ever been convicted of a felony.  As it turns out, the manager (who is also the licensee’s sole shareholder) had been convicted of possession for sale of cocaine and sentenced to serve two years in California State Prison over two decades ago.  The FCC would later learn that the licensee had misrepresented the manager’s criminal history in at least 50 separate FCC filings.

In response, the FCC sent the licensee a Letter of Inquiry (“LOI”) seeking information about the manager’s role with the company and any criminal history.  When the licensee did not respond to the LOI, the FCC commenced a proceeding with an Administrative Law Judge (“ALJ”) to determine whether the licensee had engaged in misrepresentation before the Commission, whether it was qualified to remain a licensee, and what the FCC should do with the licensee’s various outstanding applications.  When the licensee failed to respond to the ALJ’s request to file a written appearance, and failed to appear for a status conference, the ALJ ordered a hearing, which the licensee also ignored.

The FCC determined that the company was unqualified to remain a Commission licensee, revoked all of its licenses, and denied with prejudice all of the licensee’s pending applications.

Light’s Out: FCC Issues Citation to Car Dealership That Fails to Address Harmful Interference

The FCC issued a citation to a North Dakota car dealership for its continued use of outdoor lighting that interferes with a wireless service provider’s nearby cell site.

Pursuant to Section 302(a) of the Communications Act, the FCC regulates all radio frequency energy-emitting devices (“RF devices”) that are capable of causing “harmful interference to radio communications.”  Section 15 of the FCC’s Rules regulates intentional and unintentional radiators of RF emissions, ranging from garage door openers to sophisticated computer components.  Section 18 regulates equipment that generates or uses RF energy for industrial, scientific, and medical (“ISM”) purposes.  If ISM equipment causes harmful interference with an authorized radio service, Section 18.111(b) of the Rules requires its operator to take “whatever steps may be necessary to eliminate the interference.”  Similarly, Section 18.115(a) requires the operator to “promptly take appropriate measures to correct the problem.” 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:

  • FCC Proposes $20,000 Fine for Decade-Old EEO Violations
  • FCC Goes After Small North Carolina Radio Station for Absence During Inspection
  • Drone Company Agrees to $180,000 Settlement for Non-Compliant A/V Equipment

“Hire” Education: FCC Pursues South Carolina Radio Stations for EEO Violations

The FCC proposed a $20,000 fine against the operator of five radio stations near Myrtle Beach for allegedly failing to observe the Commission’s Equal Employment Opportunity (“EEO”) recruitment rules from 2008 through 2010.

The stated goal of the FCC’s EEO Rule is to promote equal access to employment opportunities in the communications industry while deterring discrimination in the hiring process.  Pursuant to the EEO Rule, the FCC requires broadcast stations to follow certain procedures before filling each full-time vacancy.  Among other things, the EEO Rule requires stations to use outside recruitment sources to publicize vacancies, notify interested third party referral sources of vacancies, and generate and retain in-depth recruitment reports.

This particular inquiry began in 2011 when the FCC randomly selected the stations’ employment unit for an EEO audit.  The audit revealed several alleged violations surrounding eleven vacancies over the preceding two-year period.  The FCC found that the licensee had either used no recruitment sources or only word-of-mouth when it recruited for six of the eleven vacancies.  Further, the licensee allegedly failed to contact a third party that had previously requested notification of full-time vacancies.

In addition, the FCC asserted that the licensee failed to keep adequate records of the number of interviewees or the referral source of most of the interviewees during that period.  As a result, this information was missing from both the licensee’s Annual EEO Public File Reports and its public inspection file.  The FCC concluded that this meant the licensee could not adequately “analyze its recruitment program … to ensure that it is effective…” as Section 73.2080(c)(3) of the FCC’s Rules requires.

As a result, the FCC issued a Notice of Apparent Liability (“NAL”) proposing to fine the stations.  While Section 503(b)(1)(B) of the Communications Act authorizes the FCC to penalize any person who violates the Act or the FCC’s Rules, neither the FCC’s Rules nor its forfeiture guidelines establish a base fine amount for specific EEO violations.  Instead, the FCC characterized the asserted violations as a “failure to maintain required records,” for which the forfeiture guidelines recommend a base fine of $1,000.  The FCC applied this fine to each of the six alleged violations of its recruitment rule and proposed an additional $2,000 fine for each of the other claimed EEO violations.  The FCC then added a $4,000 upward adjustment based on the licensee’s history of similar EEO violations at other owned stations, resulting in a total proposed fine of $20,000.

The NAL also proposed a reporting requirement under which the stations would need to report their recruitment and EEO activities directly to the FCC’s Media Bureau for each of the next three years.

Of particular interest to stations assessing their own EEO compliance, the licensee’s 2008-09 and 2009-10 recruitment reports indicated that the stations had lost much of their recruitment data to “unauthorized removal.” Specifically, the licensee subsequently reported that some of the records disappeared following the dismissal of the stations’ local business manager.  That explanation did not satisfy the FCC, which noted that the licensee’s loss of records “does not excuse it from having violated [the FCC’s] rules.”

This action is another reminder of the FCC’s strict enforcement of its EEO Rule.  Stations needing a refresher on these requirements should check out our EEO Advisory for more information, and our 2018 Broadcasters’ Calendar for important EEO-related deadlines coming up in the next year.

Out to Lunch: AM Broadcaster Notified of Station Inspection Violation

The Commission presented a Notice of Violation (“NOV”) to a small North Carolina broadcaster for failing to staff its station during lunch hour one day this past March.  In the same action, the FCC observed that the station was also transmitting from an antenna for which it was not licensed. Continue reading →