Articles Posted in Programming Regulations

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Time moves slowly in the regulatory universe, at least until you are facing a deadline.  It was in 2022 that I first wrote about the then-upcoming September 15, 2022 deadline for broadcasters to disclose whether all content “aired pursuant to the lease of time on the station” had a “foreign governmental entity” behind it, in which case the broadcaster needed to disclose that foreign sponsorship both on-air and in the station’s Public Inspection File.  The task was made more difficult by the broad definition of a foreign governmental entity, which included not just foreign governments, but “foreign political parties, agents of foreign principals, and United States-based foreign media outlets.”

The part of the rule requiring broadcasters to independently investigate whether those leasing airtime were foreign governmental entities was overturned by the courts in July 2022, but that didn’t prevent the remainder of the rule from going into effect in 2022.  The remainder (as summarized by the FCC) included:

(1) Inform the lessee of the foreign sponsorship disclosure requirement.
(2) Ask the lessee whether it falls into any of the categories that would qualify it as a “foreign governmental entity.”
(3) Ask the lessee whether it knows if any individual/entity further back in the chain of
producing/distributing the programming to be aired qualifies as a foreign governmental entity and has provided some type of inducement to air the programming.
(4) Memorialize the above-listed inquiries and retain such memorialization in its records for the remainder of the license term or for one year, whichever is longer.

The FCC, unwilling to settle for 4/5 of the apple and obviously stung by the court’s rebuke, altered the rule in June 2024 to sidestep the court’s ruling.  Since the court had found that the FCC lacked statutory authority to compel broadcasters to obtain sponsorship information from anyone other than their employees and program sponsors, the FCC amended the rule to require that either (1) the broadcaster and the sponsor execute separate certifications “reflecting the communications and inquiries required under the existing rules,” or (2) the broadcaster “ask their lessees for screenshots of lessees’ search results of two federal government websites [DOJ’s FARA website and the FCC’s U.S.-based foreign media outlets reports].”  In other words, the FCC’s maneuver was that if it was beyond its authority to make broadcasters conduct due diligence searches of those two government websites, it wasn’t beyond its authority to demand broadcasters still conduct due diligence research by asking their content providers/sponsors to search those same two websites and provide the search results to the broadcaster.

It’s an onerous requirement given that broadcasters have no legal right to demand anything of their content providers/sponsors, and those same providers can simply elect to take their business to literally every other form of media without facing such regulatory hurdles.  While unwelcome, it was still largely manageable because the FCC in adopting the original rule had made clear that a lease of airtime did not include “traditional, short-form advertising,” and leases of blocks of airtime on broadcast stations are relatively rare compared to traditional ad sales.

Unfortunately, in the later June 2024 Order, the FCC “clarified” the rule to make clear that it “will not apply to sales of advertising for commercial goods and services to the extent that such programming would not otherwise be subject to the general sponsorship disclosure rules, as set forth in section 73.1212(f) of our rules.”  So it would apply to ads that are not for “commercial goods and services.”  That includes ads for nonprofits and ads that don’t fit within Section 73.1212(f).  One example of an ad that is not for a commercial product or service is a U.S. Navy recruiting ad, meaning that broadcasters would need to collect certifications/proof that the U.S. Navy is not a representative of a foreign government before airing its recruiting ads.

The Order then plunged the regulatory dagger deeper, explicitly stating that the rule would apply to the airing of paid Public Service Announcements (PSAs) and all political advertising unless placed by a candidate.  The sheer volume of political ads and the pace at which they are changed in the months leading up to an election is staggering, with ample FCC Political File disclosure requirements already bedeviling stations trying to handle that workload.  The notion of demanding yet more information and documentation from a political advertiser adds to the burden on station employees while giving political advertisers one more reason to take their advertising elsewhere, where they will face none of those regulatory headaches.  And let’s be honest; some advertisers will be absolutely offended by the mere suggestion that they could be connected to a foreign government.

Because no one could figure out how to make such a labor and paperwork-intensive process work in the real world, and because the paperwork requirements had to be approved by the Office of Management and Budget before they could go into effect, the FCC originally announced the amended rule would go into effect a year later, on June 10, 2025.  Then, late in the day on June 10, 2025, the FCC announced an extension of the compliance deadline to December 8, 2025.  Announcing extensions for what appeared to many to be a fundamentally unworkable rule became a running feature here on CommLawCenter.

So I was not entirely surprised to find myself writing on December 5, 2025, one business day before the next deadline, that the FCC had just announced a further extension of the deadline to June 7, 2026.  That post ended with the hopeful message that the FCC might “use this added time to streamline these rather unwieldy requirements before next June.”

That proved partially prophetic.  This time around the FCC didn’t wait until the last minute to announce its plans regarding when broadcasters must come into compliance with the amended foreign sponsorship rule.  While today’s FCC Public Notice emphasized that the deadline for complying with the amended foreign sponsorship rule remains June 7, 2026, it announced that it is suspending the compliance deadline for advertisements and paid PSAs for “two years or until further public notice, whichever comes first.”

More important than the two-year extension is the reason given for it: “this delay of the advertisement and paid PSA regulation is necessary for the Commission to evaluate the costs and burdens associated with these requirements to ensure that there is sufficient offsetting public benefit.”  In other words, the FCC is reassessing whether the burden imposed by expanding the “diligence” requirement to advertising and paid PSAs makes any sense given the substantial burdens involved and the lack of any record evidence demonstrating that broadcast advertisements are being used as undisclosed propaganda tools by foreign governments.

That doesn’t mean that the non-diligence parts of the rule don’t still apply to advertisements and paid PSAs.  While broadcasters won’t be required to provide certifications or government database search results demonstrating that an ad sponsor is not connected to a foreign government, if the broadcaster has actual knowledge that the sponsor is connected to a foreign government, it must still ensure the ad includes an on-air disclosure of that fact, and place a record of it in its Public Inspection File.

So the next time you see a “Visit Scandinavia” ad that portrays Scandinavia as a pleasant place to visit, don’t fall for it.  That’s just what the Scandinavian governments want you to think.

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In a not all that surprising development for those who monitor Chairman Carr’s pronouncements, the FCC’s Media Bureau today released a “Guidance on Political Equal Opportunities Requirement for Broadcast Television Stations” narrowing the programs found exempt from the Equal Opportunities requirement. The clear target is appearances by candidates on the TV broadcast networks’ morning and late night interview programs. Tellingly, while the Equal Opportunities requirement applies to both radio and TV stations, today’s Public Notice containing the guidance is directed only at “Broadcast Television Stations” (see the title above).

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While there was much talk of broadcast deregulation at the FCC in 2025, the two big deregulatory changes of the past year were actually delivered by federal appeals courts.  Specifically, the Eighth Circuit’s elimination of the TV Big-4 duopoly rule, and Pillsbury’s own victory in a Fifth Circuit ruling that the FCC lacks authority to collect and publish on a station-by-station basis broadcast employee race, ethnicity and gender data via the fifty-year-old Form 395-B.  The first ruling opened the door to more competitive (and viable) TV station combinations, and the latter saved both radio and TV broadcasters many millions of dollars in compliance costs while also shielding them from online harassment by those finding fault with, or claiming news skew caused by, whatever mix of employee demographics a station happens to have.

So as we look ahead to 2026, all eyes are on the FCC in hopes that the talk of broadcast deregulation crystalizes into action this year.  For a list of potential targets for deregulation, look no further than Pillsbury’s just-released 2026 Broadcasters’ Calendar, outlining broadcasters’ major FCC and other filing deadlines for the year ahead.  Besides being a good reminder of important filing dates for stations across the U.S., the Calendar also serves as a reminder that no other form of media is regulated to such a degree as broadcasters, with fairly sizeable penalties for missteps, as Pillsbury’s monthly FCC Enforcement Monitor reminds us.

One prominent set of entries in the 2026 Broadcasters’ Calendar is the Quarterly Issues/Programs List requirement, which obligates stations to list issues relevant to their community in the past quarter and examples of programming aired to address those issues.  Once a major weapon in comparative license renewal hearings in which a challenger sought to demonstrate that a broadcaster’s license should not be renewed, and should instead be awarded to the challenger, time has passed them by.  First, Congress outlawed comparative license renewal challenges in 1996.  Second, the advent of digital video and audio recorders provide license renewal petitioners with far better and more comprehensive evidence of a broadcaster’s programming than any quarterly list.  For those with any doubts about this last point, you only need glance online to find videos of seemingly every program and newscaster gaffe ever aired by a station.

That makes the Quarterly Issues/Programs List one of the more challenging regulatory requirements to defend, as the only FCC actions related to them in recent decades has been to fine stations for failing to timely file them (base fine for a violation = $10,000).  For that reason, elimination of the Quarterly Issues/Programs List featured prominently in the many requests for broadcast deregulation filed in Chairman Carr’s Delete, Delete, Delete proceeding.  Whether such a change will come to pass depends heavily, however, on whether the FCC sees the lists as being relevant to Chairman Carr’s repeated calls to more aggressively enforce the FCC’s public interest mandate as it relates to programming.

Whether you view the 2026 Broadcasters’ Calendar as a handy regulatory roadmap for the year ahead, or as a reminder of all the regulatory obstacles that broadcasters, and broadcasters alone, must overcome to compete in an ever-expanding sea of unregulated media competitors, it is a useful document.  Make it your New Year’s resolution to spend some time with it.

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With a December 8 deadline to come into compliance with the FCC’s new sponsorship identification requirements for airing content connected to a foreign government, broadcasters have been racing to figure out how to comply in a practical way.  As previously discussed here and here, the new rule requires that broadcasters determine whether leases of airtime (including certain advertising) involve content that is provided, funded, or distributed by “governments of foreign countries, foreign political parties, agents of foreign principals, and United States-based foreign media outlets.”

Under the rule, broadcasters must document their completion of a number of required steps to determine if provided content has such foreign government connections, and if so, ensure disclosures are included in the content when aired, and place documentation of those disclosures in the Public Inspection File on a quarterly basis.

The challenge is not so much the airing of the disclosures themselves, but collecting the required paperwork from potentially thousands of advertisers to determine if any are connected to a foreign government.  Beyond the sheer paperwork and resources burden, broadcasters do not want to make it yet more difficult for advertisers to purchase broadcast airtime, particularly when those same advertisers can simply move their content to streamers or other online venues and skip the paperwork complexities entirely, whether connected to a foreign government or not.

The current version of the rule became effective on June 10, 2025, but on that date, the FCC extended the compliance deadline to December 8, 2025.  This gave broadcasters a six-month reprieve, but even with that added time, compliance remained a daunting proposition.

It was therefore with a sigh of relief that broadcasters learned this afternoon that the FCC has again moved the compliance deadline, this time to June 7, 2026.  This not only provides broadcasters with additional time to sort out a practical approach to complying with the new requirements, but keeps alive the hope that the FCC will use this added time to streamline these rather unwieldy requirements before next June.

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With publication of OMB approval in the Federal Register, today was the effective date for amendments to Section 73.1212(j) of the FCC’s Rules, which governs sponsorship identification for broadcast programming that “has been provided by a foreign governmental entity.”  Under those amendments, broadcast licensees would need to use one of two recordkeeping methods to demonstrate compliance with the foreign sponsorship disclosure rules.

Late today, however, the FCC’s Media Bureau released a Public Notice stating:

By this Public Notice, the Bureau announces that OMB has approved the rule modifications which revise requirements under 47 CFR § 73.1212(j)(3).  Accordingly, these revised requirements are now effective as of June 10, 2025.  However, the Bureau defers requiring compliance with the revised rules under 47 CFR § 73.1212(j)(3) until 6 months after June 10, 2025, or December 8, 2025. Only new leases and renewals of existing leases entered into on or after the compliance date must comply with the rule modifications.

So while the amended rules did go into effect today, broadcasters won’t need to come into compliance with the new recordkeeping requirements until December 8, 2025.  Until that time, you can read a detailed description of how the currently applicable pre-amendment rule works here.

Hopefully, today’s announced delay is a cause for optimism that a deregulatory FCC might use the additional time to streamline these cumbersome requirements.  If not, however, on December 8, 2025, stations will need to maintain records verifying whether a party leasing airtime is a “foreign governmental entity” for purposes of providing adequate disclosures through one of the following two recordkeeping methods:

Certification Approach

Stations and lessees of airtime must each complete a written certification reflecting that the station made the required inquiries regarding foreign governmental sponsorship.  Parties may use the FCC’s own “check-box” templates (Appendices C and D to the FCC’s Order), or create their own certification forms, provided that the forms collectively address the following required certifications:

  • Whether the licensee informed the airtime lessee of the foreign sponsorship disclosure requirement;
  • Whether the licensee asked about, and whether the lessee is, a “foreign governmental entity,” which includes foreign governments, foreign political parties, agents of foreign principals (as defined by the Foreign Agents Registration Act of 1938 (FARA), and U.S.-based foreign media outlets;
  • Whether the licensee asked about, and whether the lessee knows of, any entity or individual further back in the production or distribution chain that meets the definition of a foreign governmental entity and has provided some form of inducement to air the programming;
  • Whether the licensee sought a written certification from the lessee certifying lessee’s answers; and
  • Whether the licensee obtained the necessary information for a disclosure where one is required.

These certifications must be dated and signed by an appropriate representative of each party and retained in the licensee’s records as discussed below.

Screenshot Approach

As an alternative to certifications, licensees may ask lessees to provide screenshots of their search results when searching for themselves in the following two federal databases:

This option places the responsibility for conducting the searches on the lessee and, the FCC believes, avoids triggering the investigatory concerns raised by the D.C. Circuit. Licensees must still conduct and document the same underlying foreign sponsorship inquiries (but without need of written certifications) and retain the lessee responses in their records.

Regardless of which approach a station adopts by December 8, it must retain documentation of its diligence efforts—whether certifications or screenshots—for the remainder of the license term or one year, whichever is longer.  The records may be stored in either the licensee’s Public Inspection File or in its internal files, as long as the documents are promptly made available to the FCC upon request.

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Pillsbury’s communications lawyers have published the 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:

  • Seven-Figure Fine Proposed for Robocaller Targeting FCC Staff
  • FCC’s Enforcement Bureau Issues Payola Warning to Broadcasters
  • California Noncommercial TV Station Licensee Enters $25,000 Consent Decree to Wrap Up Investigation Into Multiple Rule Violations

FCC Proposes Seven-Figure Fine for Telecom Company Accused of Allowing Bad Actors to Use Its Network to Intimidate FCC Staff

The FCC proposed a multi-million dollar fine against a voice service provider accused of failing to prevent illegal voice traffic on its network.  Some of the pre-recorded calls targeted FCC staff and their families and purported to be from the FCC’s “Fraud Prevention Team,” which does not exist.  The calls attempted to extract money from the recipients through intimidation.

Under Section 64.1200(n)(4) of the FCC’s Rules, a voice service provider must take “affirmative, effective measures to prevent new and renewing customers from using its network to originate illegal calls, including knowing its customers and exercising due diligence in ensuring that its services are not used to originate illegal traffic.”  The rule gives voice service providers discretion as to how they police their own networks as long as the measures they put in place effectively prevent the origination of illegal traffic and ensure they know their customers.  Knowing your customer involves collecting and verifying customer information, including their corporate records, government identification, and the addresses from which they will be originating their calls.  The FCC has warned providers that high-volume callers merit heightened scrutiny to ensure they will not abuse the provider’s network.

In a redacted Notice of Apparent Liability for Forfeiture (NAL), the FCC detailed the parties involved in the alleged scheme, including the voice service provider and two of its customers.  The two customers were accepted as customers on the same day, and while they provided different names and email addresses, they both had the same physical address (a Toronto hotel) and used the same domain name.  According to the NAL, on the same day they were accepted as customers and into the next day, the two entities originated automated calls that reached FCC staff and sought to connect the recipients to a live caller who, in at least one case, demanded $1,000 in gift cards to help the caller avoid jail time for “crimes against the state.”

The FCC worked with the Industry Traceback Group to determine the origin of the suspected illegal robocalls.  The Enforcement Bureau then subpoenaed call records from the voice service provider and learned that the two customers made nearly 2,000 calls over the two days that FCC staff reported receiving calls.  The FCC’s investigation revealed that the information the customers provided to the voice service provider was false and that the voice service provider did not corroborate or independently verify the customers’ information, thereby failing to apply the scrutiny necessary for the company to know its customers.  The FCC noted that the customers paid the provider in untraceable bitcoin, which helped to conceal their identities, but said it was not a factor in the FCC’s finding of apparent rule violations. Continue reading →

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One thing about being part of a heavily regulated industry—you know well in advance most of the regulatory obligations and deadlines you’ll be facing in the year ahead.  While that brings no solace to broadcasters, it does lend a certain level of predictability to an often unpredictable industry.

For more decades than most of us can remember, Pillsbury’s Communications Practice has published its annual Broadcasters’ Calendar detailing filing deadlines facing broadcasters in the coming year.  As the Calendar itself warns, however, these obligations can expand or contract (though expansion has unfortunately been the historical norm), and deadlines can appear, disappear, and move with great rapidity.

Broadcasters have therefore long known that you start the year with the Broadcasters’ Calendar close at hand, while keeping an eye on CommLawCenter and the industry trades to see what obligations and deadlines will be added, subtracted, or altered over the course of the year.

Thus it has been, and thus shall it always be.

Some years are more likely than others to bring surprises, however.  With Trump 2.0 arriving upon the scene and new leadership coming to the FCC in January, the winds of change are likely to blow particularly hard in 2025.  Broadcasters are hoping those winds will be at their backs, bringing long overdue deregulation before social media giants drive broadcasters over the same ledge that the remaining newspapers cling to by their fingertips.

While broadcasters are admittedly nervous regarding soon-to-be Chairman Carr’s comments about reinvigorating the public interest standard for broadcasters given that the phrase has lost all meaning under recent Commissions, his clarification that his focus rests primarily upon the national networks rather than local broadcasters has brought a limited degree of relief.  Still, broadcasters will need to keep a close eye on regulatory developments in 2025, which promises to be a very eventful year.

So keep the 2025 Broadcasters’ Calendar close at hand in the coming year, and hope that the 2026 edition will be appreciably thinner.

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Following the devastation wrought by Hurricane Helene across the American southeast and in anticipation of Hurricane Milton’s arrival, the FCC has announced an extension of the deadline to upload Third Quarter Issues/Programs Lists for radio and television stations in states particularly affected by Hurricane Helene (note that the Public Notice mistakenly refers to them as “first quarter” Lists) .  As discussed in our Third Quarter Issues/Programs List advisory, the Lists are due for most stations by October 10, 2024.  However, in light of the Commission’s announcement today, broadcast stations in Florida, Georgia, North Carolina, South Carolina and Tennessee now have until November 10, 2024 to upload these lists (the Public Notice actually says the October 10, 2020 deadline is extended to November 10, 2020, but the FCC’s intent is clear).

Because of Hurricane Helene, the FCC previously extended the deadline for broadcast stations nationwide (as well as all other EAS Participants) to file their Form One  in the EAS Test Reporting System.  The Form One, previously due on October 4, 2024, is now due on October 18, 2024.

In granting the latest extension only to stations in hurricane-impacted states, the FCC still encouraged those stations “to file their quarterly issues/programs lists as soon as practicable.”  The FCC also made clear that the extension “does not modify any requirements or filing deadlines related to stations’ political files, nor does it modify any other filing obligations or deadline related to broadcasters’ public files.”

Lastly, some practical advice—stations taking advantage of the Third Quarter Issues/Programs List extension should note in their upload file that they are filing after the normal deadline pursuant to an extension granted by the FCC.  When a station’s license comes up for renewal several years from now, and the licensee must certify that the Public File has been complete at all times, station employees may have forgotten why this particular filing appears to have been uploaded late.  It will be important for the station to have a contemporaneous note in the Public File explaining that the filing was not late, both to remind the licensee making its license renewal certification and to alert third parties and any FCC staff later reviewing the Public File that the List was in fact timely uploaded.

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The Federal Communications Commission (FCC) last week released a highly anticipated Notice of Proposed Rulemaking (NPRM) seeking comment on proposed disclosure requirements for political ads containing AI-generated content.  The item was adopted earlier this month by a 3-2 party-line vote, nearly two months after FCC Chairwoman Rosenworcel first announced its circulation among the commissioners for consideration.

As discussed in more detail below, the proposed rule would require radio and TV broadcasters to (1) inquire of any person making a request to buy airtime for political advertising whether the ad contains AI-generated content; (2) make on-air disclosures of AI use with regard to political ads containing AI-generated content immediately before or during their airing; and (3) include a disclosure of AI use in the station’s Political File records for each such ad buy.  While this post focuses on the NPRM’s broadcast-specific proposals, we note that it proposes similar obligations for cable operators, Direct Broadcast Satellite providers, and Satellite Digital Audio Radio Service licensees engaged in program origination, as well as for Section 325 permit holders (those authorized to export programming for transmission back into the United States).

Aware that such rules might conflict with similar efforts by states and other federal agencies, the NPRM characterizes the proposed disclosure requirements as a “complement” to efforts to regulate AI in political advertising that are underway in various states and at the Federal Election Commission (FEC), which we wrote about here and here.  However, FEC Chairman Sean Cooksey made his contrary views clear in a letter last month to FCC Chairwoman Rosenworcel in which he stated that the FEC has exclusive jurisdiction in this area and “the FCC lacks legal authority to promulgate conflicting disclaimer requirements only for political communications.”

The proposal would require broadcasters to do the following:

Duty of Inquiry:  Broadcasters would need to inform each political advertiser, at the time the station agrees to air a political ad, of the requirement that stations must air a disclosure for any ad that includes AI-generated content and then inquire of the buyer as to whether the ad includes such content.  While styled as a “simple inquiry,” the NPRM acknowledges various challenges that are likely to arise.  It seeks comments on how to deal with such situations, including, for example, where a station is working with a media placement agency that had no role in the creation of the ad and which may not know whether it includes AI-generated content, or the station receives political content from a network or syndicator and has no direct contact with the advertiser.

On-Air Disclosure:  A broadcast station that receives a candidate or issue ad containing AI-generated content would need to air a disclosure immediately before or during the ad to inform viewers of the ad’s use of AI.  The proposal contemplates and seeks comment on the following standardized language for the disclosure: “[The following]/[this] message contains information generated in whole or in part by artificial intelligence.”  Once again, the NPRM acknowledges there are challenges broadcasters will face in complying with the proposed rule.  These include (a) what should a station do if it has received no response to its inquiry about AI use; (b) what should a station do if it was told by the person or entity buying the time that an ad contains no AI-generated content and is later informed by a credible third party that the ad does include AI-generated content (and who should qualify as a “credible third party?”); and (c) what should a station do when it receives political programming through a network and lacks any information from the advertiser on AI use as well as the ability to insert a disclosure in network-delivered programming?  The NPRM seeks comment on these and many other issues that may affect a station’s ability to comply with the proposed disclosure requirement.

Online Disclosure: Adding yet more to the burden on broadcasters, the NPRM proposes requiring broadcasters to include in their online Political Files the following written disclosure for each political ad containing AI-generated content: “This message contains information generated in whole or in part by artificial intelligence.”

Because of the FCC’s limited jurisdiction, the proposed rules would apply only to certain FCC-regulated entities, doing nothing to address the use of AI in political ads that voters see and hear on social media or elsewhere.  As a result, it would impose a significant burden on regulated entities while leaving unregulated entities like social media—the primary source of deceptive political information—completely unregulated.  This would incentivize advertisers to put their AI ads on any media other than radio and TV, both because of their desire not to include disclosures and the added bureaucracy/delay involved in the multi-step process stations would need to follow with advertisers to determine if a disclosure is needed (and the added time needed to then insert such a disclosure). Continue reading →

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Pillsbury’s communications lawyers have published the 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 $8,000 Fine for Contest Rule Violations
  • Business Communications Company Settles Business Radio Investigation by Agreeing to Compliance Plan and $100,000 Penalty
  • FCC Issues $16,500 Fine to Alabama FM Translator for Multiple Rule Violations

California FM Station Receives $8,000 Proposed Fine for Contest Rule Violation

The FCC proposed a fine of $8,000 against the licensee of a California FM radio station for violating the FCC’s Contest Rule.  Specifically, the FCC issued a Notice of Apparent Liability for Forfeiture (NAL) asserting that the licensee failed to conduct the contest substantially as announced.

Section 73.1216 of the FCC’s Rules requires a licensee to “fully and accurately disclose the material terms” of a contest it conducts or promotes and to conduct the contest “substantially as announced and advertised.”  Material terms include, among other things, eligibility restrictions, the means of selecting winners, and the extent, nature, and value of prizes.  Prizes must also be awarded promptly, and in the past the FCC has found Contest Rule violations where a station failed to award prizes in a manner consistent with the advertised rules.

The FCC received a complaint alleging that the station did not award a cash prize to the winner of a contest conducted in October 2019.  To investigate the complaint, the FCC issued a Letter of Inquiry (LOI) to the station.  In response, the station admitted that there had been “undue delay,” with the prize being awarded after the announced timeline.  The station’s contest rules indicated prizes were to be awarded to winners “within thirty (30) business days of the date the winner completes all required Station documents.”  The station acknowledged that it received all required documentation on January 16, 2020, and thus it should have issued the prize by March 2, 2020, but did not issue the prize until May 2021.  The station cited three separate events as the cause of the undue delay: (1) difficulty accessing necessary files after the COVID-19 pandemic led to employees working from home; (2) a ransomware attack that affected corporate IT systems between October 2020 and March 2021; and (3) a lack of staff after the ransomware attack that prevented the station from completing work in a timely manner.

Despite these defenses, the FCC found that the station apparently willfully violated Section 73.1216 of the FCC’s Rules when it failed to award the prize in accordance with the advertised contest rules, and therefore failed to conduct the contest “fairly and substantially as represented to the public.”  The FCC explained that “timely fulfillment of the prize” was a “material term of the Licensee’s own contest rules” and the station delayed issuing the prize for over a year.  The FCC disagreed with the station’s justifications for the delay, finding that they did not excuse the failure to award the prize in compliance with the announced contest rules.  In particular, the FCC pointed out that the station’s first justification for the delay (the pandemic transition to work-from-home) occurred in mid-March 2020 – after the station should have already issued the prize by March 2, 2020.

The FCC’s base fine for violations pertaining to licensee-conducted contests is $4,000.  In this case, the FCC found a single violation of Section 73.1216 of the FCC’s Rules resulting from the station’s failure to issue the prize within the timeframe established by the contest rules.  However, considering the totality of the circumstances, and in line with the FCC’s Forfeiture Policy Statement, the FCC determined an upward adjustment was warranted, emphasizing that “large or highly profitable companies should expect to pay higher forfeitures for violations of the Act and the Commission’s rules” to ensure that the fine is an “effective deterrent and not simply a cost of doing business.”  The FCC therefore concluded that an upward adjustment of the proposed fine from $4,000 to $8,000 was appropriate.  The station has 30 days from release of the NAL to pay the fine or file a written statement seeking reduction or cancellation of it.

Rule Violations by Business Communications Company Result in Consent Decree with Compliance Plan and Six-Figure Penalty

A nationwide business communications company settled an FCC investigation by admitting that it failed to seek approval from the FCC before transferring control of business radio licenses and that it conducted business radio operations without authorization.  The company entered into a consent decree that requires implementation of a compliance plan and payment of a $100,000 civil penalty. Continue reading →