Articles Posted in Low Power FM & Translators

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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:

  • 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 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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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:

  • Broadcaster Agrees to Pay $100,000 Fine for Filing Applications Under False Names
  • FCC Proposes $13,000 Fine for Late License Renewal Application and Unauthorized Operation
  • Failure to Register with the FCC Results in $100,000 Fine for Telecom Provider

Catch Me If You Can: Broadcaster Settles Long-Running Investigation into the Use of Pseudonyms in FCC Applications

The FCC entered into a Consent Decree with a radio broadcaster to resolve an investigation into whether the broadcaster filed numerous applications using fake names and refused to cooperate with FCC investigations.

Section 1.17 of the FCC’s Rules requires that written and oral statements to the FCC be truthful and accurate. Section 1.65 of the Rules requires applicants to amend applications as needed for continuing accuracy and completeness. In addition, Section 73.1015 requires applicants to respond to FCC inquiries regarding broadcast applications.

The Consent Decree explains that, since 1982, there has been a “cloud of unanswered questions” about whether applications filed by the broadcaster were accurate. In 1993, the FCC sent the broadcaster a letter inquiring into: (1) his role in certain entities; (2) apparent misrepresentations he made to the FCC; (3) his prior failure to respond to certain site availability allegations; and (4) the operation of several FM translators. The broadcaster never responded to the letter, and since that time, the broadcaster’s real name has not appeared in any FCC application as a principal of any applicant. Instead, the broadcaster used pseudonyms, as well as the names of his wife, mother, and grandmother.

In addition, the Consent Decree states that a 1997 complaint filed by another broadcaster was never answered or disclosed by the broadcaster. The complaint alleged that the broadcaster was the real party in interest behind a certain licensee, and that the broadcaster had violated several other FCC Rules.

Under the terms of the Consent Decree, the broadcaster admitted to being the real party in interest on numerous applications for which he had used pseudonyms, and admitted to several other violations of FCC Rules. The broadcaster agreed to (1) pay a $100,000 fine; (2) the cancellation of licenses for an AM station and two low power FM stations; and (3) the dismissal of petitions for reconsideration involving two dismissed FM applications. In return, the FCC agreed to grant the license renewal applications for another AM station and seven FM translator stations, each with a shortened license term of one year so that the FCC can closely monitor the licensee’s operation of the stations in the future.

FCC Proposes $13,000 Fine for Unauthorized Operation Caused by Late License Renewal Application

The FCC issued a Notice of Apparent Liability for Forfeiture (“NAL”) against an Ohio FM licensee for failing to timely file its license renewal application and for continuing to operate the station after its license had expired. The FCC proposed a fine for the violations and simultaneously issued a Memorandum Opinion and Order regarding the licensee’s license renewal application.

Section 301 of the Communications Act provides that “[n]o person shall use or operate any apparatus for the transmission of energy or communications or signals by radio . . . except under and in accordance with this [Act] and with a license in that behalf granted under the provisions of [the Act].” Section 73.3539(a) of the FCC’s Rules requires that broadcast licensees file applications to renew their licenses “not later than the first day of the fourth full calendar month prior to the expiration date of the license sought to be renewed.”

In this case, the station’s license expired on October 1, 2004, rendering the license renewal application due by June 1, 2004. The licensee, however, did not file the renewal application until July 30, 2004. The FCC dismissed the application due to the licensee’s “red light” status for owing a debt to the FCC. Red light status prevents the FCC from providing any government benefit to a licensee, including license renewal. The licensee did not seek reconsideration of the dismissal and, as a result, the station’s license expired on October 1, 2004.

In January 2011, the FCC staff was told that the station was off the air. On January 12, 2011, the FCC wrote a letter to the former licensee inquiring into the operating status of the station, and requested a response within 30 days. The station did not respond until March 25, 2011, and stated that it was on-air as of the date of the FCC letter. However, the station explained that it had in fact suspended operations on February 23, 2011, after its transmitter was damaged during the theft of its copper feed lines.

In May 2011, the licensee filed a request for Special Temporary Authority (“STA”) to resume operations, stating that its transmitter repair was almost complete. The licensee also noted that it was unaware its 2004 license renewal application had been dismissed, and that it would file another license renewal application “once it [could].” The licensee submitted a license renewal application in July 2011, and the FCC subsequently granted the station’s STA request through March 2012.

In February 2012, the licensee filed another STA request to operate with reduced facilities, stating that the damage to the transmitter was far worse than previously thought, and would cost more than the value of the station to repair. The licensee also stated that the landlord of its transmitter site had declined to renew the station’s lease, but it had found an alternative, temporary location from which it could operate the station. The FCC granted the STA, and set an expiration date of August 2012. The licensee continued to operate under the STA facilities even after the August 2012 expiration date. The licensee did not file a request to extend the STA until February 2013. That request was granted as a new STA in March 2013, and the licensee has operated under a series of extensions to that STA ever since.

Based on the facts of this case, the FCC proposed the full base fine amount of $3,000 for failure to file a required form, and the full base fine amount of $10,000 for unauthorized operations. The FCC explained that while it typically assesses fines of $7,000 for unauthorized operations, the length of the first unauthorized period in this case—over six years—followed by a second unauthorized period, warranted a $10,000 fine.

The FCC stated that it would grant the station’s license renewal application upon the conclusion of the forfeiture proceeding “if there are no issues other than the apparent violation that would preclude grant of the applications.”

FCC Fines Prepaid Calling Card Company $100,000 for Failing to Register as Service Provider

The FCC fined a New Jersey provider of international prepaid calling card services $100,000 for failing to register as a telecommunications service provider and adhere to all registration requirements.

Section 64.1195(a) of the FCC’s Rules requires that companies providing interstate telecommunications services file an FCC Form 499-A, also known as the Annual Telecommunications Reporting Worksheet, with the Universal Service Administrative Company prior to providing service. The Form 499-A instructions state that “[w]ith very limited exceptions, all intrastate, interstate, and international providers of telecommunications in the United States must file this Worksheet.”

According to the FCC, compliance with the registration requirement is critical to determining a provider’s payment obligations to the Universal Service Fund, Telecommunications Relay Service Fund, and numbering support mechanisms. The FCC further stated that registration is a way to recover costs, and is a central repository for important details about providers.

Calling it a “dereliction of its responsibilities,” the FCC determined that the provider willfully operated for years without filing a Form 499-A, giving the provider an unfair economic advantage over its competitors. The FCC stated that the misconduct started when the provider began providing service in 1997 and continues until the provider files its initial Form 499-A. The FCC proposed a $100,000 fine for the provider’s transgressions.

In addition to the fine, the FCC instructed the provider to immediately register as a telecommunications provider, and to come into full compliance with all of its federal regulatory obligations. The FCC also warned that the fine was “a very limited action that does not reflect the full extent of [the service provider’s] potential forfeiture liability and that does not in any way preclude the Commission from imposing additional forfeitures … in the future.”

A PDF version of this article can be found at FCC Enforcement Monitor November 2016.

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As we previously reported, the FCC last year adopted a number of changes to its rules and policies aimed at revitalizing the AM radio service, which for many years has lived in the shadow of the more robust FM service.  One of these changes was to expand the ability of AM broadcasters to use FM translators to rebroadcast their AM signals, thereby improving coverage, particularly at night.  To accomplish this, the FCC gave each AM station the right to file one, and only one, application to move an FM translator up to 250 miles and change the translator’s frequency, provided that it is used to rebroadcast the designated AM station for the next four years.  If that application does not make it through the FCC process for any reason, the broadcaster is barred from filing another.

The FCC gave smaller Class C and D AM stations first crack at its new policy by opening a window on January 29, 2016, during which Class C and D licensees could file modification applications on a first-come, first-served basis.  In other words, if you filed your application on January 29, you trumped anyone who filed a conflicting application after that date.  If parties file mutually exclusive applications on the same day, the applicants need to resolve the mutual exclusivity through settlement negotiations and/or technical amendments (e.g., one or both parties move to a different frequency).

The first window, limited to Class C and D AM stations, closes on July 28, 2016.  On the next day, July 29, a second window opens during which Class A and B AM stations (as well as Class C and D stations that did not file in the first window) may file modification applications to relocate FM translators to be used for AM station rebroadcasts.

AM stations that have not yet filed should keep in mind that:

  1. If you have a Class A or B AM station and plan to relocate an FM translator for AM rebroadcast purposes, you should get your modification application filed on July 29 in order to give yourself the maximum protection against being bumped by an earlier-filed mutually exclusive application.  If you are planning to buy a translator but haven’t actually acquired it yet, there are still ways to get the modification application on file before closing the acquisition.
  2. If you have a Class C or D AM station and plan to relocate an FM translator for rebroadcasts (and haven’t filed a modification application yet), file by July 28.  While Class C and D stations will not be precluded from filing in the second window, July 29 is sure to bring a wave of new modification applications that will change the translator landscape significantly.

But even having these deadlines circled on your calendar won’t help if your modification application is dismissed.  When it comes to modification applications filed in either of these windows, the FCC has made clear that its policy is one and done.  A dismissed application means that you not only lose your place in the processing line, but cannot file again in the windows.  Such a dismissal could occur due not only to deficiencies in the application itself, but also if your deal to acquire the translator falls through.  AM broadcasters buying a translator are therefore well advised to pay careful attention to the due diligence process, the closing conditions in the acquisition agreement, the compliance of the proposed move with FCC technical rules, and their financing for the acquisition.  If a deal falls through, the reason is irrelevant.  You’ll be sitting out the filing window watching your competitors get their FM translators.

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The FCC’s new Licensee-Conducted Contest Rule became effective this past Friday.  Under the new rule, a broadcast licensee conducting a contest still has the obligation to disclose the material terms of the contest “fully and accurately” and to conduct the contest substantially as announced.  However, as we wrote last September, the new rule allows broadcasters to meet these requirements by posting the contest terms on their websites rather than reading them on-air.  To take advantage of this new flexibility, broadcasters must:

  • Post the terms on the station’s or licensee’s website, or if neither the station nor the licensee has a website, on a free website that is available to the public 24/7, without registration;
  • Broadcast the website address with sufficient information for a consumer to find the terms easily, using simple instructions or natural language;
  • Broadcast the website address periodically throughout the term of the contest;
  • Establish a conspicuous link or tab on the home page of the website that takes consumers to the contest terms;
  • Maintain the terms on the website for at least 30 days after the contest has ended and conspicuously mark those that are expired, including the date a winner was selected;
  • On the rare occasions that a change in terms occurs during the contest, announce the changes on-air within 24 hours and periodically thereafter, and direct participants to the written terms on the website; and
  • Assure that the contest rules posted online conform to those announced on-air.

The effective date of the new rule has been eagerly anticipated by broadcasters as the change grants them more flexibility in announcing contest terms, avoids long and complicated contest announcements on-air, and permits participants to review the rules at their leisure.  However, in making the change, the FCC noted that “[a]s with all elements of contest-related announcements, the burden is on the broadcaster to inform the public, not on the public to discern the message.”

Indeed, the law views the rules of a contest or sweepstakes to be a contract between the sponsor (station) and anyone who enters the contest, or even anyone who tries to enter and fails to do so successfully.  If the sum total of your on-air contest rules are “be the 103rd caller after X song is played” and a vague “station policy” somewhere on the website that says you can only win once every 30 days, you have left a lot out of your “contract.”  For example, when a station ran a contest on-air like the one above and did not get many callers, the DJ simply awarded the prize to the last person to call in after hours of trying to attract more callers.  The station was fined by the FCC because it did not run the contest substantially as advertised.  Properly written contest rules should account for such situations, as well as other foreseeable developments, such as the phone lines going down after the trigger song has been played.  A station with contest rules that don’t address likely (or even unlikely) contest developments is inviting challenges from both contestants and regulators.

In that regard, as we noted in FCC Proposes to Clear Airwaves of Boring Contest Disclosures, But State Issues Remain, stations should remember that the FCC is not the only regulator watching out for contest and sweepstakes violations.  For example, some states’ contest laws require that all announced prizes be awarded in order to prevent “bait and switch” contests.  For stations giving away “time sensitive” prizes such as concert tickets that have to be used on a specific date, the rules should address the situation where a winner is chosen but then turns down the prize or simply does not claim it because they cannot attend on the date specified.  If the rules say that an alternate winner will be chosen after 10 days, there may not be enough time left before the concert to award the prize.  The station with poorly written contest rules must then choose between violating the law by failing to award a prize, or violating the law by failing to conduct the contest in accordance with the announced rules.  Badly-drafted contest rules are a liability for any business, but are worse for broadcasters, as in addition to all of the state and federal laws governing contests, broadcasters are uniquely subject to the FCC’s contest oversight as well.

Finally, while you might imagine that contest complaints come from those who lost the contest (and indeed they often do), many come from contest winners.  While professional contestants who enter every contest will complain about the valuation placed on a prize for tax purposes, first-time winners are more likely to complain about having to sign a release to claim the prize, or where the prize is large, having to provide the station with their Social Security Number, appear in person, or attend a further event, such as the day when all the winners of keys must try them out in the grand prize car.  These obligations need to be clear in the contest rules, not just to avoid liability, but to ensure the station is able to get the promotional value it anticipated from the contest.  Contestants who demand anonymity and refuse to sign releases greatly undercut the promotional value of a big contest.

The bottom line is, now that the FCC will let you post your rules online for contestants and regulators to scrutinize, you need to ensure you have rules that can withstand scrutiny.

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January 2016

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:

  • TV Licensee Agrees to Pay $18,000 for Public Inspection File Violations
  • FM Translator Licensee Faces $9,000 Fine for False Certification and Unauthorized Operation Violations
  • AM Station Licensee Pays $10,000 to End Investigation into Alleged Ownership Violations

Mistakes Over Off-Air Time in Public Inspection File Cost TV Licensee $18,000

The FCC’s Media Bureau entered into a Consent Decree with a Las Vegas Class A television licensee to resolve an investigation into whether the licensee violated the FCC’s Rules by improperly indicating  on four Children’s Television Programming Reports and TV Issues/Programs Lists that it was off-air, and failing to prepare mandatory certifications of Class A eligibility for over five years.

Section 73.3526 of the FCC’s Rules requires each commercial broadcast licensee to maintain a public inspection file containing specific information related to station operations. Subsection 73.3526(e)(11)(iii) requires TV licensees to prepare and place in their public files a Children’s Television Programming Report for each calendar quarter showing, among other things, the efforts made during that three-month period to serve the educational and informational needs of children.  In addition, Subsection 73.3526(e)(11)(i) requires TV licensees to place in their public file, on a quarterly basis, an Issues/Programs List that details programs that have provided the station’s most significant treatment of community issues during the preceding quarter.  Also, Subsection 73.3526(e)(17) requires each Class A television station to include in its public file documentation sufficient to demonstrate that it continues to meet the Class A eligibility requirements as set forth in Section 73.6001.

On May 28, 2014, the licensee filed its station’s license renewal application. In the process of evaluating the application, FCC staff found that the licensee indicated the station was off-air in its Children’s Television Reports and Issues/Programs Lists for two quarters during which it was on the air for a portion of the quarter, and for two quarters during which the station did not have Special Temporary Authorization (“STA”) to go off-air.  In addition, the station failed to prepare any Class A certifications during its license term, which began in the third quarter of 2009.

The licensee explained that it had mistakenly indicated that the station was off-air in the Children’s Television Reports and Issues/Programs Lists filed for the last three quarters of 2010 because its compliance official mistook the station’s engineering STA for an STA to go off-air. With regard to the first quarter 2012 reports, the licensee explained that the compliance official mistook another station’s STA to go off-air for this station’s STA.

To resolve the investigation, the licensee admitted to the violations and agreed to pay an $18,000 fine. The licensee also agreed to a two-year compliance plan, which directs the licensee to institute management checks, training, and other measures designed to prevent a re-occurrence of the violations.   Despite the imposition of a fine and compliance plan, the FCC renewed the station’s license, finding that the licensee met the minimum qualifications to hold an FCC license, and that grant of the license renewal application was in the public interest.

FCC Proposes $9,000 Fine for FM Translator Licensee Based on False Certification and Unauthorized Operation Violations

The FCC’s Media Bureau proposed to fine a Texas FM translator licensee $9,000 for falsely certifying in a license application that its translator was constructed as specified in its construction permit, and for operating the translator at variance from its license. The FCC also admonished the licensee for including incorrect information in a related application.

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While relief won’t come as soon as radio broadcasters had hoped, the FCC gave AM stations a shot in the arm with the release of an Order designed to provide assistance to the struggling AM radio service.

The Order, released on October 23, 2015, comes a full two years after the October 2013 Notice of Proposed Rulemaking (“NPRM”) that launched the effort.  In the Order, the FCC adopted a number of proposals (with some modifications) from the NPRM.  The most significant of these are exclusive AM filing windows in 2016 to allow AM stations to move an FM translator up to 250 miles to rebroadcast that AM station’s signal, and 2017 windows exclusively for AM stations to apply for a new FM translator construction permit.

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It was once a tradition that the FCC would release a pro-broadcaster rulemaking decision on the eve of the NAB Show to ensure a warm reception when the commissioners and staff arrived to speak at the Show. I say it “once” was a tradition because pro-broadcaster rulemakings are none too common these days, a point alluded to by Chairman Wheeler at the Show when he said “Now, I’ve heard and read how some believe the Federal Communications Commission has been ignoring broadcasting in favor of shiny new baubles such as the Internet.”

Still, it was in the spirit of that tradition that the Chairman posted a blog titled “Let’s Move on Updating the AM Radio Rules” two days before his NAB speech. In it, he stated his intent to call for a vote in the AM Revitalization proceeding, which then-acting-Chairman Clyburn launched at a different NAB convention in September of 2013.

The post was unavoidably sparse on details given its short length, but one detail leapt out at radio broadcasters. While signaling movement on smaller issues (“the proposed Order would give stations more flexibility in choosing site locations, complying with local zoning requirements, obtaining power increases, and incorporating energy-efficient technologies”), the post rejected what the industry sees as the real answer to revitalizing AM radio—opening a filing window for applicants seeking to build translators to rebroadcast AM radio stations on the FM band (a “translator” in the truest sense of the word).

Many see this as the most practical and consequential option since it would allow AM daytimer stations to serve their audiences around the clock, while overcoming many of AM radio’s worst obstacles—interference from appliances and electronics, as well as other AM stations, and AM’s limited sound quality. Most importantly, unlike a number of other potential solutions, FM translators avoid the need for everyone to buy a new radio in order to make the solution viable.

In his blog post, the Chairman gave two reasons for this surprising development. First, he questioned “whether there is an insufficient number of FM translator licenses available for AM licensees.” Second, he raised qualms about opening a window for only AM licensees, stating that “the government shouldn’t favor one class of licensees with an exclusive spectrum opportunity unavailable to others just because the company owns a license in the AM band.”

The first reason is, quite simply, factually unsupported by the proceeding record. In comments and reply comments filed just a year ago, the call for an FM translator filing window was deafening. It’s hard to believe the need for such translators has dramatically plummeted in just a year, or that the call for a window would have been so loud were there truckloads of FM translators already out there (in the right location) just waiting to be purchased. For anyone thinking that AM stations just want a “free” translator rather than buying one, applying for and building a translator is anything but free. In addition, the likelihood of mutually exclusive translator applications raises the specter of licenses being awarded by auction, ensuring that acquiring one from the FCC would hardly be “free”.

Of course, the oversupply argument is logically flawed as well. If a window is unnecessary, no one will show up with an application, and the only energy expended will be that of drafting a public notice announcing the window. In reality, however, few think that would be the result, as the FCC’s last general filing window for FM translators was back in 2003, long before AM stations were even permitted to rebroadcast on an FM translator. In other words, far from receiving preferential treatment, AM licensees have never even had an opportunity to apply for an FM translator to retransmit their stations.

All of which makes the second reason given in the Chairman’s post—avoiding an AM licensee-only filing window—even more curious. Under the current FM translator rule, Section 74.1232, applying for an FM translator license is not limited to broadcast licensees. The rule provides that “a license for an FM broadcast translator station may be issued to any qualified individual, organized group of individuals, broadcast station licensee, or local civil governmental body….”  A common example of this is a community with limited radio service that applies for and builds an FM translator to rebroadcast a distant station that is otherwise difficult to receive locally, providing that community a reliable information lifeline. Indeed, the FCC is finding out on the television side that many of the TV translators that might be repacked out of existence are owned by local communities rather than licensees.

So the FCC would not even need to revise its eligibility rules in order to open an “FM for AM” translator window for all comers. Under the existing rule, anyone is free to apply as long as they have “a valid rebroadcast consent agreement with such a permittee or licensee to rebroadcast that station as the translator’s primary station.” In terms of being limited to serving as a translator for an AM station, that is the nature of an FCC filing window, as the FCC always specifies the type of application it will accept in any filing window announcement, and has never opened a “file for whatever service you want” window.

Thus, the record amply supports the need for an “FM for AM” translator window, and the current rules preclude any concern that a window would offer preferential treatment, as anyone who wants one can apply for one.

So what is the FCC waiting for?