Articles Posted in Telecommunications

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The FCC has released a Report and Order which includes its final determinations as to how much each FCC licensee will have to pay in Annual Regulatory Fees for fiscal year 2013 (FY 2013), and in some cases how the FCC will calculate Annual Regulatory Fees beginning in FY 2014. The FCC collects Annual Regulatory Fees to offset the cost of its non-application processing functions, such as conducting rulemaking proceedings.

The FCC adopted many of its proposals without material changes. Some of the more notably proposals include:

  • Eliminating the fee disparity between UHF and VHF television stations beginning in FY 2014, which is not a particularly surprising development given the FCC’s recently renewed interest in eliminating the UHF discount for purposes of calculating compliance with the FCC’s ownership limits;
  • Imposing on Internet Protocol TV (IPTV) providers the same regulatory fees as cable providers beginning in FY 2014. In adopting this proposal, the Commission specifically noted that it was not stating that IPTV providers are cable television providers, which is an issue pending before the Commission in another proceeding;
  • Using more current (FY 2012) Full Time Employees (FTE) data instead of FY 1998 FTE data to assess the costs of providing regulatory services, which resulted in some significant shifts in the allocation of regulatory fees among the FCC’s Bureaus. In particular, the portion of regulatory fees allocated to the Wireline Competition Bureau decreased 6.89% and that of all other Bureaus increased, with the Media Bureau’s portion of the regulatory fees increasing 3.49%; and
  • Imposing a maximum annual regulatory rate increase of 7.5% for each type of license, which is essentially the rate increase for all commercial UHF and VHF television stations and all radio stations. A chart reflecting the FY 2013 fees for the various types of licenses affecting broadcast stations is provided here.

The Commission deferred decisions on the following proposals in the Notice of Proposed Rulemaking that launched this proceeding: 1) combining the Interstate Telecommunications Service Providers (ITSPs) and wireless telecommunications services into one regulatory fee category; 2) using revenues to calculate regulatory fees; and 3) whether to consider Direct Broadcast Satellite (DBS) providers as a new multi-channel video programming distributor (MVPD) category.

The Annual Regulatory Fees will be due in “middle of September” according to the FCC. The FCC will soon release a Public Notice announcing the precise payment window for submitting the fees. As has been the case for the past few years, the FCC no longer mails a hard copy of regulatory fee assessments to broadcast stations. Instead, stations must make an online filing using the FCC’s Fee Filer system, reporting the types and fee amounts they are obligated to pay. After submitting that information, stations may pay their fees electronically or by separately submitting payment to the FCC’s Lockbox. However, beginning October 1, 2013, i.e. FY 2014, the FCC will no longer accept paper and check filings for payment of Annual Regulatory Fees.

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February 2013

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 Takes Action Against Interference and Unlicensed Operations
  • FCC Assesses $25,000 Fine for Unresponsiveness

Licensee Cannot Escape Fine for Intentional Jamming and Unlicensed Operations
In a rather odd chain of events, the FCC recently issued a Memorandum Opinion and Order (“Order”) against an individual in Thousand Oaks, California stemming from a 2009 investigation and a 2011 Forfeiture Order. The Order rejected a petition for reconsideration of the earlier Forfeiture Order and affirmed the FCC’s decision to fine the individual for unlicensed radio operations, intentional interference with radio operations, and refusal to allow an inspection of radio equipment.

In March 2009, an agent from the FCC’s Enforcement Bureau investigated radio interference at a shopping center. The agent located an unlicensed repeater transmitter operating from a secure radio communications facility on Oat Mountain with a beam antenna pointed in the direction of the shopping center. The repeater was transmitting pulsating signals on 461.375 and 466.375 MHz, the land mobile frequencies licensed to the shopping center for its own operations. These transmissions were jamming the shopping center’s licensed land mobile operations.

During the investigation, an unidentified individual communicated with shopping center personnel on a different set of frequencies, telling them they had “plenty of warning”, that he was jamming their licensed frequencies to force them to cease use of those frequencies, and that they needed to apply to the FCC to cancel their current land mobile license and apply for a new license to operate on different frequencies. He then began transmitting NOAA weather radio on the licensed frequencies to block any use of those frequencies by the shopping center.

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Resolving a conundrum faced by every business that has entered the world of consumer texting, the FCC has ruled that businesses are not violating the federal Telephone Consumer Protection Act (“TCPA”) by sending a confirmation text to consumers who have just opted out of receiving further texts. However, the FCC did impose limitations on the content of such confirmation texts to ensure compliance with the TCPA. The threshold requirement is that the purpose of the reply text be solely to confirm to the consumer that the opt-out request has been received and will be acted on. The FCC then enumerated several additional requirements that businesses must observe when sending confirmation texts to avoid violating the TCPA. For those affected, which is pretty much every business that uses texts to communicate with the public, we have released a Client Alert on the subject.

To many, sending a confirmation text to a consumer who has previously opted in to receiving a company’s text messages would appear to be nothing more than good customer service and an extension of the common practice of sending a confirmatory email message when a consumer has chosen to unsubscribe from an email list. Indeed, many wireless carriers and mobile marketing and retail trade associations have adopted codes of conduct for mobile marketers that include sending confirmation texts to consumers opting out of future text messages.

However, the TCPA, among other things, makes it illegal to make a non-emergency “call” to a mobile telephone using an automatic telephone dialing system or recorded voice without the prior express consent of the recipient. The FCC’s rules and a decision in the U.S. Court of Appeals for the Ninth Circuit define a “call” as including text messages. As a result, many businesses have had class action lawsuits filed against them by consumers arguing that, once they send a text message opting out of receiving future texts, their prior consent has been revoked, and the business violates the TCPA by sending ANY further texts, even in reply to the consumer’s opt-out text.

Seeking to avoid facing such lawsuits and the potential for conflicting decisions from different courts, businesses sought the FCC’s intervention. After reviewing the issue, the FCC rejected the fundamental argument raised by the class action suits, noting that the FCC has never received a single complaint from a consumer about receiving a confirmatory text message. The FCC did note, however, that it had received complaints from consumers about not receiving a confirmation of their opt-out request. The Commission therefore held that when consumers consent to receiving text messages from a business, that consent includes their consent to receiving a text message confirming any later decision to opt out of receiving further text messages.

To avoid creating a loophole in the TCPA that might be exploited by a business, the FCC proceeded to set limits on confirmation texts designed to ensure that they are not really marketing messages disguised as confirmation texts. First and foremost, the implied permission to send a confirmation text message only applies where the consumer has consented to receiving the company’s text messages in the first place. Next, the confirmation text message must be sent within five minutes of receiving the consumer’s opt-out request, or the company will have to prove that a longer period of time to respond was reasonable in the circumstances. Finally, the text of the message must be truly confirmatory of the opt-out and not contain additional marketing or an effort to dissuade the consumer from opting out of future texts. You can read more about the FCC’s decision and these specific requirements in the firm’s Client Alert.

By providing clarity on the relationship between confirmation texts and the TCPA, the FCC’s ruling provides marketers and other businesses with some welcome protection from class action TCPA suits. In an accompanying statement, Commissioner Ajit Pai stated that “Hopefully, by making clear that the Act does not prohibit confirmation texts, we will end the litigation that has punished some companies for doing the right thing, as well as the threat of litigation that has deterred others from adopting a sound marketing practice.” Businesses just need to make sure they comply with the FCC’s stated requirements for confirmation texts to avail themselves of these protections.

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The privacy practices of mobile applications (“Apps”) have been under scrutiny from a wide variety of domestic and foreign regulatory authorities of late. Most recently, California Attorney General Kamala D. Harris issued a press release regarding a new enforcement effort aimed at bringing mobile Apps into compliance with California’s Online Privacy Protection Act (“CalOPPA” or “Act”).

CalOPPA applies to any online service that collects personally identifiable information through the Internet about a California resident who uses or visits the online service. In other words — the Act appears to apply to the entire world wide web. And now that includes any mobile App that uses the Internet to collect personally identifiable information.
On October 30, 2012, the California Attorney General sent a series of letters to mobile App operators reminding them that CalOPPA requires that they conspicuously post a privacy policy that complies with specified requirements. She stressed that the privacy policy must be “reasonably accessible … for consumers of the online service.”

The Attorney General did not dictate how Apps could comply with the posting requirement. However, she did state that having a website with the applicable privacy policy conspicuously posted may be adequate, but only if a link to that website is “reasonably accessible” to the user within the App. She also warned that, under California’s unfair competition law, violations of CalOPPA may result in penalties of up to $2,500 for each violation. In the context of a mobile App, each copy of the unlawful App downloaded by California consumers would constitute a separate violation.

The California Attorney General’s action is another step towards requiring mobile Apps to provide consumers with the same sorts of privacy protections as they have come to expect when surfing the Web at home or work. What industry and regulators continue to struggle with is doing so in the unique environment of mobile devices.
Click here for a copy of California Attorney General Kamala D. Harris’ press release and a sample non-compliance letter.

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The FCC recently released an Order giving companies greater flexibility in how they can structure foreign investment in common carrier licensees, such as wireless companies that provide phone service. This action, taken in a proceeding initiated last year, is a first step towards simplifying and streamlining the FCC’s cumbersome foreign ownership review and approval process, with the goal of facilitating increased foreign investment in telecommunications companies.

The FCC’s foreign ownership policy is governed by Section 310 of the Communications Act. Section (b)(3) of the statute requires the FCC to prohibit certain foreign entities from being FCC licenses themselves and from directly holding ownership interests that exceed specified levels in certain types of FCC licensees, such as common carrier licensees. The FCC’s International Bureau previously interpreted this provision to strictly prohibit foreign entities from having more than a 20% non-controlling interest (direct or indirect) in an FCC common carrier licensee.

The Order replaces this absolute prohibition with a discretionary policy already in use under a different section of the statute, Section 310(b)(4). That section restricts foreign entities from having more than a 25% controlling interest (direct or indirect) in any parent company of an FCC common carrier licensee (among other entities), unless the FCC specifically approves a greater foreign ownership interest.

The FCC makes the determination of whether it should allow greater foreign investment under Section 310(b)(4) and now under Section 310(b)(3), by examining whether the foreign investment is from a World Trade Organization (WTO) Member country, using a “principal place of business” test. If under the principal place of business test the investment is from a WTO Member country, the proposed foreign investment is presumed to be competitive and in the public interest. Where the investment is from a non-WTO Member country, the FCC applies what is known as an “effective competitive opportunities” or “ECO” test. The purpose of the ECO test is to determine whether competitive opportunities exist for American companies in those non-WTO Member countries and whether the foreign investment in the U.S. will serve the public interest.

The FCC’s foreign ownership review and approval process under Section 310(b)(4) has historically proven to be complex and time-consuming, both for licensees and the FCC. Licensees are required to engage in costly and extensive efforts in order to compile detailed information regarding citizenship and principal places of business of investors. There is no exception for individuals and entities that hold even de minimis interests through multiple intervening investment vehicles and holding companies. Moreover, licensees often have to conduct this exercise repeatedly given the fluid nature of investments. For its part, the FCC must expend considerable resources of its own processing (and often reprocessing) the voluminous and detailed information submitted by licensees.

The FCC’s decision liberalizes only its ownership policies under Section 310(b)(3). It leaves for another day the extensive reforms proposed by the FCC in a Notice of Proposed Rulemaking regarding foreign ownership under Section 310(b)(4).

The FCC’s Order has been published in the Federal Register and is now in effect. Parties interested in learning more about the FCC’s Order or the foreign ownership reform proceeding should contact Pillsbury for advice.

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July 2012
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 is a special issue regarding recent FCC actions that provide a detailed (and expensive) look at Section 73.1206, the prohibition on recording telephone calls for broadcast.

FCC Issues a Total of $41,000 in Fines for Broadcaster Airing Prank Telephone Calls

The close of August in Washington, D.C. has brought with it a surge of beautiful weather, baseball excitement (for the first time in recent memory), and … forfeiture orders related to the improper recording of telephone calls for broadcast. On August 22nd, the FCC issued two forfeiture orders assessing a combined $41,000 in fines against licensees owned by the same parent company for violations of the telephone broadcast rule.

The telephone broadcast rule, Section 73.1206 of the Commission’s Rules, requires that, “[b]efore recording a telephone conversation for broadcast, or broadcasting such a conversation simultaneously with its occurrence, a licensee shall inform any party to the call of the licensee’s intention to broadcast the conversation, except where such party is aware, or may be presumed to be aware from the circumstances of the conversation, that it is being or likely will be broadcast.” While the rule language only talks about providing notice to the calling party, the FCC has reiterated many times that when a station employee intends to record a call for broadcast or broadcasts the call live, the employee must also obtain the party’s consent before recording the call or going live.

Both orders released on August 22nd involved a finding that the licensee had violated this rule. The first order involved prank calls made in April 2006 by radio personalities to members of the public during a comedy segment of the station’s morning show. In one conversation, the caller pretended to be an intruder hiding under the bed of the person receiving the call; in another, the caller pretended to be a loan shark bent upon collecting a debt.

The FCC began investigating the prank calls after receiving a complaint from a station listener. During the investigation, the licensee indicated it was unable to confirm or deny whether the prank calls aired on its morning show, and could not provide a recording or transcript of the program. The licensee acknowledged, however, that the program identified in the complaint was aired on the station and was simulcast on two co-owned stations.

The second forfeiture order released on the 22nd also involved the broadcast of an alleged prank call in which the caller pretended to be a hospital employee who then informed the call recipient that the recipient’s husband had been in a motorcycle accident and died at the hospital. When questioned about the incident, the licensee told the FCC that its parent company had contracted with an outside vendor who made and recorded the call. The licensee admitted that it broadcast the call on multiple occasions.

In the first case, the FCC had proposed a $25,000 fine. In the second case, the FCC had proposed a $16,000 fine. In both cases, the licensee urged cancellation of the proposed fines, to no avail. In batting down a myriad of arguments raised by the licensees, the FCC affirmed not only its broad investigative powers to enforce Section 73.1206, but also the licensees’ responsibility to both adhere to and demonstrate their adherence to the Commission’s Rules.

These two decisions provide an excellent primer for broadcasters on the FCC’s enforcement of the telephone broadcast rule, as between them, the FCC addressed a multitude of defenses raised by the licensees, ultimately concluding that none of those defenses could prevent the imposition of very substantial fines. More specifically, the FCC shot down each of the following licensee arguments:

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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:

  • Inadequate Sponsorship ID Ends with $44,000 Fine
  • Unattended Main Studio Fine Warrants Upward Adjustment
  • $16,000 Consent Decree Seems Like a Deal

Licensee Fined $44,000 for Failure to Properly Disclose Sponsorship ID
For years, the FCC has been tough on licensees that are paid to air content but do not acknowledge such sponsorship, and an Illinois licensee was painfully reminded that failing to identify sponsors of broadcast content has a high cost. In a recent Notice of Apparent Liability (“NAL”), the FCC fined the licensee $44,000 for violating its rule requiring licensees to provide sponsorship information when they broadcast content in return for money or other “valuable consideration.”

Section 317 of the Communications Act and Section 73.1212 of the FCC’s Rules require all broadcast stations to disclose at the time the content is aired whether any broadcast content is made in exchange for valuable consideration or the promise of valuable consideration. Specifically, the disclosure must include (1) an announcement that part or all of the content has been sponsored or paid for, and (2) information regarding the person or organization that sponsored or paid for the content.

In 2009, the FCC received a complaint alleging a program was aired without adequate disclosures. Specifically, the complaint alleged that the program did not disclose that it was an advertisement rather than a news story. Two years after the complaint, the FCC issued a Letter of Inquiry (“LOI”) to the licensee. In its response to the LOI, the licensee maintained that its programming satisfied the FCC’s requirements and explained that all of the airings of the content at issue contained sponsorship identification information, with the exception of eleven 90-second spots. In these eleven spots, the name of the sponsoring organization was identified, but the segment did not explicitly state that the content was paid for by that organization.

Though the licensee defended its program content and the disclosure of the sponsor’s name as sufficient to meet the FCC’s requirements, the FCC was clearly not persuaded. The FCC expressed particular concern over preventing viewer deception, especially when the content of the programming is not readily distinguishable from other non-sponsored news programming, as was the case here.

The base forfeiture for sponsorship identification violations is $4,000. The FCC fined the licensee $44,000, which represents $4,000 for each of the eleven segments that aired without adequate disclosure of sponsorship information.

Absence of Main Studio Staffing Lands AM Broadcaster a $10,000 Penalty
In another recently released NAL, the FCC reminds broadcasters that a station’s main studio must be attended by at least one of its two mandatory full-time employees during regular business hours as required by Section 73.1125 of the FCC’s Rules. Section 73.1125 states that broadcast stations must maintain a main studio within or near their community of license. The FCC’s policies require that the main studio must maintain at least two full-time employees (one management level and the other staff level). The FCC has repeatedly indicated in other NALs that the management level employee, although not “chained to their desk”, must report to the main studio on a daily basis. The FCC defines normal business hours as any eight hour period between 8am and 6pm. The base forfeiture for violations of Section 73.1125 is $7,000.

According to the NAL, agents from the Detroit Field Office (“DFO”) attempted to inspect the main studio of an Ohio AM broadcaster at 2:20pm on March 30, 2010. Upon arrival, the agents determined that the main studio building was unattended and the doors were locked. Prior to leaving the main studio, an individual arrived at the location, explained that the agents must call another individual, later identified as the licensee’s Chief Executive Officer (“CEO”), in order to gain access to the studio, and provided the CEO’s contact number. The agents attempted to call the CEO without success prior to leaving the main studio.

Approximately two months later, the DFO issued an LOI. In the AM broadcaster’s LOI response, the CEO indicated that the “station personnel did not have specific days and times that they work, but rather are ‘scheduled as needed.'” Additionally, the LOI response indicated that the DFO agents could have entered the station on their initial visit if they had “push[ed] the entry buzzer.”

In August 2010, the DFO agents made a second visit to the AM station’s main studio. Again the agents found the main studio unattended and the doors locked. The agents looked for, but did not find, the “entry buzzer” described in the LOI response.

The NAL stated that the AM broadcaster’s “deliberate disregard” for the FCC’s rules, as evidenced by its continued noncompliance after the DFO’s warning, warranted an upward adjustment of $3,000, resulting in a total fine of $10,000. The FCC also mandated that the licensee submit a statement to the FCC within 30 days certifying that its main studio has been made rule-compliant.

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While the FCC gets to have a say in nearly every sale or merger in the communications industry, no matter how small, the Department of Justice and the Federal Trade Commission will also be called upon if a transaction is large enough. The test for when a transaction is large enough to require a filing with the DOJ or the FTC is whether it exceeds the minimum financial thresholds of the Hart-Scott-Rodino (“HSR”) Act.

Because of inflation and other factors, however, the HSR thresholds must be annually adjusted to accurately separate small deals from big deals. This separation is critical because the DOJ and the FTC have limited resources to investigate transactions, and therefore only require advance notification of transactions that involve companies or transactions above a certain minimum size. Transactions that fall below the HSR reporting thresholds, however, are not immune from antitrust scrutiny even after they are consummated if they are likely to have an anticompetitive effect in any relevant market.

On February 27, 2012, the HSR thresholds will increase significantly, with the “minimum size-of-transaction test” threshold increasing from $50 million to $68.2 million. If the value of the proposed transaction is above $68.2 million but below $272.8 million (up from $200 million), reporting is required only if the ultimate parents of the acquiring and acquired entities meet certain “size-of-person” tests, the thresholds for which will also increase on February 27, 2012. Subject to a myriad of exemptions, transactions valued at over $272.8 million under the HSR regulations must generally be reported. If that sounds complicated (and it can be), Pillsbury’s Antitrust lawyers recently published an Advisory with more details on these changes.
While transactions that meet these thresholds must be reported whether or not they are communications-related, the thresholds can be particularly relevant to large broadcasters, since broadcasters that enter into a transaction requiring an HSR filing need to be aware that they may not be able to implement a local marketing agreement or similar cooperative arrangement in conjunction with an anticipated acquisition until the HSR filing has been made and the mandatory post-filing waiting period has either passed without action by the DOJ/FTC, or the DOJ/FTC have agreed to terminate the HSR waiting period early.

With communications transactions starting to heat up again, the increase in the HSR thresholds is welcome, and may simplify transactions that fall above the current HSR thresholds, but below the new ones.

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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:

  • Failure to Refresh Tower Paint Garners $8,000 Fine
  • FCC Levies $25,000 Fine for Failure to Respond
  • $85,000 Consent Decree Terminates Investigation Into Unauthorized Transfers of Control

Tower Owners Receive Harsh Reminder Regarding Lighting and Painting Compliance
The FCC, citing air traffic navigation safety, has fined many tower owners for noncompliance with Part 17 of the Commission’s Rules. Part 17 includes regulations pertaining to the registration, maintenance and notification obligations of tower owners. The base fine for violating Part 17 requirements is $10,000.

Part 17 supplements the notification obligations imposed by the Federal Aviation Administration (“FAA”). Section 17.7 of the FCC’s Rules requires that certain tower structures, including most structures over 200 feet in height and those near airports or heliports, be registered with the FCC. Section 17.21 mandates that most towers over 200 feet be lit and painted in accordance with the FAA’s recommendations. These recommendations include the use of orange and white paint (alternating bands) and red or white flashing, strobe or static lights.

With the recent release of two Notices of Apparent Liability (“NAL”), the FCC continued its pursuit of those who fail to comply with its tower rules, including Section 17.50, which mandates that any tower required to be painted in accordance with the FAA’s guidelines or the FCC’s Rules must be cleaned or repainted as often as necessary to maintain good visibility.

In the first of the two NALs, agents from the Dallas Field Office inspected a 402-foot tower located in Quanah, Texas and determined that the existing paint, which was faded, scraped, peeling or missing in certain areas, was insufficient. The NAL indicates that the agents were unable to distinguish between the orange and white bands from a “quarter mile from the [tower]”, thereby “reducing the structure’s visibility.”

Shortly after the Quanah inspection, agents from the Dallas Field Office also inspected a 419-foot tower located in Durant, Oklahoma. The agents found a similar situation, where the tower’s paint was faded, scraped, peeling or missing in certain areas. The agents were again unable to distinguish between the orange and white bands from “800 feet away from the [tower]”, once again “reducing the structure’s visibility.”

The FCC levied the full base fine of $10,000 against each tower owner. The FCC also mandated that no later than 30 days after the release of the respective NAL, a “written statement pursuant to Section 1.16 of the Rules signed under penalty of perjury by an officer or director of [the tower owner] stating that the [tower] has been painted to maintain good visibility” be delivered to the Dallas Field Office.

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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:

  • Failure to Monitor and Repair EAS Equipment Nets $8,000 Fine
  • Fines for Late-Filed License Renewals Continue
  • $25,000 Fine for Failure to Answer FCC Correspondence

Act of Vandalism Ends With $8,000 Fine

In a recently released Notice of Apparent Liability (“NAL”), the FCC issued a fine totaling $8,000 against a New Mexico AM broadcaster for violating the FCC’s Emergency Alert System (“EAS”) rules. The NAL alleges that the broadcaster failed to properly maintain its EAS equipment, a violation of Section 11.35 of the FCC’s Rules.

During a June 2011 main studio inspection, an agent from the Enforcement Bureau’s San Diego Field Office observed that the station’s EAS equipment was not operational. According to the NAL, the Station’s EAS equipment had been damaged by vandalism six months prior to the inspection. In addition to the equipment failure, Station employees were unable to provide the required EAS documentation (i.e., logs or other EAS records) associated with the mandatory weekly and monthly tests required by Section 11.61 of the FCC’s Rules.

Inoperable EAS equipment is a violation of Section 11.35(a) of the Commission’s Rules, which mandates that broadcasters must ensure that the required EAS equipment is installed, maintained and monitored. Section 11.35(a) also requires EAS participants to log, among other things, instances when the station experiences technical issues during participation in the weekly or monthly EAS tests. Pursuant to Section 11.35(b), EAS participants must seek FCC approval if their EAS equipment will not be functioning for more than 60 days. The base fine for an EAS violation is $8,000. The FCC, stating that “EAS is critical to public safety,” levied the full fine against the broadcaster.

Late Filings and Unauthorized Operations Lead to $10,000 Forfeiture

The FCC recently issued a joint Memorandum Opinion and Order and NAL to the licensee of an AM station in South Carolina for several violations of the FCC’s Rules. The licensee was ultimately fined $10,000 for failing to file its license renewal application on time and for unauthorized operation of the station following the license’s expiration.

Section 73.3539(a) of the FCC’s Rules requires license renewal applications to be filed four months prior to the expiration date of the license. The AM station’s license was set to expire in December 2003, but no license renewal application was filed. The station licensee later explained that it did not file a renewal application because it did not realize the license had expired. In May of 2011, seven years later, the FCC notified the station that the station’s license had expired, its authority to operate had been terminated, and that its call letters had been deleted from the FCC’s database.

After receiving this letter, the station filed a late license renewal application and a subsequent request for Special Temporary Authority (“STA”) to operate the station until the license renewal application was granted. Because so much time had passed since the station failed to timely file its 2003 license renewal application, the deadline for the station’s 2011 license renewal application (for the 2011-2019 license term) also passed without the station filing a timely license renewal application. As a result, the FCC found the station liable for an additional violation of its license renewal filing obligations. The base fine for failing to file required forms is $3,000. Thus, the FCC found the station liable for a total of $6,000 relating to these two violations.

Further, the FCC found the licensee liable for violations of Section 301 of the Communications Act because the station continued operating for seven years after its license had expired. The base forfeiture for such a violation is $10,000, but the FCC lowered the proposed forfeiture to $4,000 because the station had previously been licensed.

In spite of the rule violations and $10,000 fine, the FCC decided to grant the station’s license renewal application, finding that the station’s violations did not evidence a “pattern of abuse.”
FCC Fines Unresponsive Party $21,000 Above Base Fine

A recent NAL released by the Enforcement Bureau provides a reminder that regulatory ignorance is not bliss. According to the NAL, the Enforcement Bureau, as part of an investigation into billing practices, issued a Letter of Inquiry (“LOI”) to a provider of prepaid calling cards on July 15, 2011. The LOI mandated that a response be submitted by August 4, 2011.

The provider failed to respond to the LOI by the initial deadline. The Enforcement Bureau, via e-mail on August 29, 2011, provided an additional extension of time to respond until September 8, 2011. The extended deadline again came and went without action by the provider. As of December 9, 2011, the Enforcement Bureau had not received a response to its July 2011 LOI. Pursuant to Section 1.80 of the FCC’s Rules, the base fine for failure to respond to FCC correspondence is $4,000.

The NAL noted that the FCC’s authority under Sections 4(i), 218, and 403 of the Communications Act of 1934 “empowers it to compel carriers … to provide the information and documents sought by the Enforcement Bureau’s LOI,” and that failure to respond to an Enforcement Bureau request “constitutes a violation of a Commission order.” The Enforcement Bureau stated that the provider’s “egregious, intentional and continuous” misconduct warranted a $21,000 upward adjustment to the base $4,000 fine, for a total fine of $25,000.

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