FCC Heavies Up on Fine for Multiple Sponsorship ID Violations

Calculation method increases total fine well beyond the base forfeiture; licensee’s seeming contradictory claims don’t appear to have helped matters

Seven years ago the Enforcement Bureau sent out a flurry of inquiries suggesting that scores of TV stations might have violated the sponsorship identification rule by relying on “video news releases”. The Commission followed up on this in 2008 with a combo Notice of Inquiry and Notice of Proposed Rulemaking suggesting that the sponsorship ID rule might warrant extensive (some might call it nonsensical) sponsor IDs to flag “embedded” advertisements.

And now, after half a decade of relative inactivity on the sponsorship ID front, the Commission has imposed a $44,000 fine on a Chicago AM station for sponsorship ID violations.

There are several lessons to be learned here, even if the violations themselves were pretty obvious and equally avoidable.

The problem arose when the station aired a series of paid announcements – running from 90 seconds to two hours in length – on behalf of Workers Independent News (WIN), which bills itself as “the Nationwide Voice Of Working People And Their Unions”. The spots were bought and paid for by WIN and were produced to sound like a newscast (or at least a routine news report inserted into a news program). Eleven of the 90-second spots, however, were not ID’d to reflect that they were paid announcements.

A complaint was filed, the Enforcement Bureau asked the station about the spots, and the station initially responded that ALL the spots were properly ID’d. The Bureau wasn’t convinced, and issued a Notice of Apparent Liability (NAL) imposing a $44,000 fine for the 11 non-ID'd spots.

In response to the NAL, the licensee changed its tune, now admitting that the 11 spots weren’t properly ID’d. The licensee questioned the calculation of the fine, though. The base forfeiture amount for a sponsorship ID violation is $4,000. Since the violation involved a single failure – albeit repeated 11 times – the licensee argued that the proper fine should be $4,000. The Bureau stuck to its guns, calculating the fine by multiplying the $4K base times 11 (i.e., the number of separate violations) to come up with $44K.

The licensee challenged this approach and the full Commission has now spoken: when it comes to sponsorship ID violations, “forfeiture amounts proposed or assessed for violations of the sponsorship identification rules in any case reflect consideration of the unique facts of each case in accordance with the aggravating and mitigating factors.” And where, as here, the Commission determines that multiple violations have occurred, the Commission will feel free to calculate the fine accordingly.

Lesson Number One: If you ignore the sponsorship ID aspects of programming you air, be prepared to pay for each separate broadcast, even if the mistake you make is essentially the same for each broadcast.

Lesson Number Two: If you realize that you’ve violated the sponsorship ID rule, take steps to alert your audience to the problem. While the FCC doesn’t say that corrective announcements will get you off the hook, the order includes at least a suggestion to that effect. So if you find yourself in that particular hole, such announcements may prove helpful.

And Lesson Number Three? Pay attention to what you tell the FCC and be sure to keep your stories straight.

Why? Because in this case, in its response to the Bureau’s initial inquiry, the licensee took the position that all of the WIN announcements had been properly ID’d. But in response to the NAL, it acknowledged that 11 of the 90-second announcements were not properly ID’d. And it went further. Seeking leniency, the licensee argued that it had taken steps to correct the problem even before the FCC started asking questions about the spots. In support of that argument, the licensee advised the FCC that, back in 2009 when the spots were aired, the station’s General Sales Manager had sent the GM an email alerting him that the “WIN spots did not contain the required sponsor identification” and urging that they be corrected promptly.

But hold on there. If the licensee knew that the 90-second announcements didn’t pass sponsorship ID muster before the Bureau first came calling, how could the licensee have claimed to the Bureau that there hadn’t been any violations at all?

The licensee’s problem here was complicated by the fact that the accuracy of the latter response (in which it admitted that the station’s General Sales Manager had raised the problem back in 2009) was attested to by the station’s current General Manager who, back in 2009, happened to be the station’s “Director of Sales”. The licensee apparently declined to identify by name the individual responsible for the 2009 email, and it also declined to submit the email – so we are all left to guess exactly who was involved. But it’s clear (to us, at least) that the FCC was highly suspicious about the seemingly conflicting representations and was, accordingly, not inclined to cut the licensee any slack at all.

Which leads us to the final take-away point: licensees should always follow the FCC’s rules, but if they slip up – which, let’s face it, is bound to happen sooner or later – they should not dig themselves in even deeper by denying facts that they know to be true. As history has repeatedly taught us, the cover-up is always worse than the crime.

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Comments (5) Read through and enter the discussion with the form at the end
John Anderson - February 12, 2014 1:51 PM

Co-founder of Workers Independent News here. WIN is not a spot done up to "sound like a newscast"—it's an actual newscast that WIN pays commercial stations to carry, much like Rush Limbaugh did when he launched his syndicated talk radio career. I totally agree that WLS was in the wrong here and their explanation hasn't helped matters, but please don't impugn WIN as some faux-news outlet when it is not. I also am wondering when the FCC got into the business of defining what journalism exactly is.

Jon Markman - February 12, 2014 5:00 PM

Thank you for the comment, John. No offense was intended. I certainly didn’t mean to suggest that WIN is a “faux-news” operation, and if any of our readers might have read it otherwise, your comment will set them straight.

Tom Zachman - February 14, 2014 10:51 AM

Can the FCC levy 'fines'?

As a regulatory bureau, I think not. I believe only a court of law and a Judge can 'fine' for crimes.

Reading the Forfeiture Order I count zero times 'fine' was used; but 90 times 'forfeiture' was used.

What say you?

Jon Markman - February 14, 2014 2:50 PM

Tom –

The FCC routinely uses the terms “forfeiture” and “civil fine” interchangeably. For example, the language used in Citations sent by the Enforcement Bureau to apparent violators of the Commission’s rules advises the addressee that it “may be subject to civil and criminal penalties, including but not limited to substantial monetary fines (forfeitures).” E.g., Ronald Bethany, 28 FCC Rcd 14727 (Enforcement Bureau 2013). The D.C. Circuit does the same. E.g., SBC Communications v. FCC, 373 F.3d 140 (D.C. Cir. 2004), where the court repeatedly uses the word “fine” to refer to the monetary penalty assessed by the FCC for rule violations in an order titled “Forfeiture Order”.

John Anderson - March 18, 2014 6:44 PM

Now that I've had the time to digest this fine, it would seem that the FCC *did* make the explicit determination that Workers Independent News is, in fact, not news—and it seems that this determination is having a chilling effect on WIN. Legal options are now being explored. Care to play?

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