Enforcement Relief for "Student-run" NCE Stations

New Media Bureau policy opens door for reduced fines for first-time violators of some paperwork rules.

The FCC’s enforcement actions often leave us shaking our heads wondering if the bureaucracy recognizes the challenges faced in real life by those it regulates. But occasionally there are rays of hope.  Case in point: the Media Bureau has revised its policy for enforcing certain paperwork obligations against student-staffed noncommercial educational (NCE) radio broadcast stations. The revised policy provides an opportunity for such stations to avoid crushing forfeitures which could end up shutting the stations down.

Last July, we blogged about the stifling impact of the FCC’s forfeitures on student-operated stations. Because of frequent student staff turnover, such stations can be prone to rule violations, which in turn result in steep forfeitures often amounting to a substantial portion of -- indeed, sometimes even more than -- the station’s annual budget. That happens when the fine is based on the Commission’s schedule of “standard” forfeitures even without any upward adjustments.

While some stations hit with fines have argued to the Commission that their budgets can’t sustain the forfeiture amount, the FCC has historically ignored such claims. Instead, it has looked to the resources of the entire educational institution, rather than just the station itself, presumably (but unrealistically) assuming that the institution would pay up.  Unfortunately, as we reported in our earlier post here,even though many institutions do pay up, the threat of further severe regulatory enforcement has apparently led some institutions to sell their stations, thereby eliminating opportunities for entry and training of young people in the art of broadcasting.

But now the Bureau has a new policy.

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FCC Rejects FiberTower's Effort to Keep Auctioned Licenses

The full FCC agrees with the Wireless Bureau that FiberTower’s failure to construct resulted from its own business decisions.

FiberTower loses again. The full FCC has backed the Wireless Telecommunications Bureau’s decision to cancel 698 licenses held by the company in the 24 GHz and 39 GHz auctioned fixed microwave bands, for failure to construct sufficient facilities.

As we explained last December in our sister publication FHH Telecom Law, FiberTower is not alone in its difficulties. Nearly all of the area-wide licensees in the four auctioned bands used to communicate between fixed points – at 24, 28, 31, and 39 GHz – have had difficulty in meeting their renewal obligations. In part the problems trace to a shortage of suitable equipment, and in part to markets that did not develop as expected. FiberTower, ironically, was one of the more commercially successful licensees, so the FCC action against it seems particularly harsh.

The usual duration for microwave licenses of all kinds is ten years. When an area-wide licensee applies for renewal after that period, it must show it is providing “substantial service.” The FCC rules define this, unhelpfully, as “a service which is sound, favorable, and substantially above a level of mediocre service which just might minimally warrant renewal during its past license term.” (Confusingly, this says the level of service required for renewal is substantially above the level of service required for renewal.)

Thanks to a “safe harbor” policy, a licensee is deemed to be providing “substantial service” if it demonstrates that it has constructed four links per million population in its service.

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Jailhouse Block (Reprise): FCC Looks to Ban Burners from the Big House

FCC proposes rule changes to help combat contraband cell phone usage in correctional institutions.

If The Shawshank Redemption had been set in 2013 rather than 60 years or so earlier, this prison-yard exchange between inmates Andy Dufresne and Red would probably go something like this:

Andy: I understand you're a man who knows how to get cell phones.

Red:    I'm known to locate cell phones from time to time…but what would you want one for, Andy, to update your Facebook status?

The problem of contraband cell phone use in correctional institutions for social media status updates is very real. And while inmate status updates or video posts might be somewhat amusing – especially if they involve an organized flash mob(ster?) or this rendition of Michael Jackson’s Thriller – authorities are evermore concerned that contraband cell phones are being used by inmates for far more nefarious, criminal purposes.

In a recent Notice of Proposed Rulemaking (NPRM), the FCC is exploring regulatory approaches for reducing contraband cell phone usage in correctional institutions.

Why can’t prisons just “jam” the contraband cell phone signals, you ask?

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Tower Hot Potato: Ownership Dispute Doesn't Shield Station Licensee From Tower-Related Obligations

YOU own it. No, YOU own it. No, YOU own it  . . . .

A recent decision from the full Commission teaches us a couple of valuable lessons when it comes to potential liabilities both for tower owners and for those who may not think that they’re tower owners.

It all started in 2006, when Ely Radio, LLC bought KWNA(AM), Winnemucca, Nevada. The deal provided, in standard contractual terms, that the buyer would be acquiring all the “property and fixtures . . . used or useful” in the station’s operation. The average reader might leap to the conclusion that the “property and fixtures” in question would necessarily include the station’s tower. Don’t be so sure. 

Fast forward a couple of years. The Enforcement Bureau’s San Francisco Field Office determines that the station’s tower hasn’t been lit at night; making matters worse, the tower’s owner hasn’t been making the required observations and, as a result, hasn’t reported the outage to the FAA. When the Enforcement folks check the FCC’s database, they determine that the tower’s owner is listed not as Ely Radio, LLC, but rather the company that had sold the station back in 2006.

Covering all their bases, the Field Office reps notify both the 2006 seller and buyer of the problem. The seller promptly writes back to advise the Commission that the tower was sold to Ely Radio as part of the 2006 deal, even though the seller did apparently hold onto the land on which the tower is situated. Based on that information, the Enforcement Bureau issues a Notice of Apparent Liability to Ely Radio for the tower lighting, observation and notification violations; the Bureau throws in an additional violation – failure to notify the Commission of the 2006 change in the tower’s ownership. Ely Radio responds that, contrary to what the 2006 seller may be saying, Ely Radio did not acquire the tower as part of its deal, so the seller is the one who should be liable for any tower-related violations. 

At this point, let’s recall the Commission’s longstanding policy of refusing to adjudicate issues relating to local law.

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FCC Enforces Against Owner of a Well Pump

Non-radio device causes interference to amateur radio communications.

The FCC has cited the owner of a “well pump” for causing harmful interference to radio communications.

Wait – a well pump? A machine that brings up water from a well? What makes the FCC think it has jurisdiction over pumps? Next, they’ll be regulating the bathroom fixtures.

The truth is, some of the greatest interference threats to radio communications come not from radio equipment, but from electrical devices such as elevator motors, photocopy machines, vehicle ignitions, and even fluorescent lighting. The FCC closely regulates radio transmitters and digital devices to limit the interference they can cause. You would think the FCC would also regulate the more important sources of interference.

It turns out they do. Just not very often.

The FCC rules lay out three categories of unlicensed devices: 

  • “intentional radiators,” which intentionally generate and emit radio signals – the things most people call “transmitters”;
  • “unintentional radiators,” which intentionally generate radio-frequency energy for use within the device, but do not intentionally emit that energy – including all digital devices and most kinds of receivers; and
  • of interest here, “incidental radiators,” which generate and emit radio-frequency energy, although not intended to do either – such as the examples listed above.

This last category is subject to two FCC rules. One requires manufacturers to use “good engineering practices” to minimize the risk of causing harmful interference to radio communications. This rule is widely ignored. The other rule says that operation of any unlicensed device, including an incidental radiator, may not cause harmful interference to an authorized radio service. As to incidental radiators, this rule is also widely ignored. Just ask Ruben D. Lopez, Jr. of Pomona Park, FL, who ignored it at his peril.

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Broadcast Renewal Trifecta: Improper "Menu" Underwriting Announcements, "Renewal Expectancy" . . . and Chesterfields!

Staff renews NCE-FM license – but not before fining the licensee for including too much detail in underwriting announcements, admonishing it for overly relying on PSA’s, and referring it to the Department of Justice for cigarette advertising!

A relatively obscure Audio Division decision involving the renewal application of a noncommercial educational (NCE) “community” radio station in Batavia, Ohio hits the trifecta. It sheds interesting (if not entirely illuminating) light on the standards governing noncommercial underwriting practices. It touches on the apparently-forgotten-but-not-gone question of the adequacy of nonentertainment programming performance for renewal purposes – an area of potentially vast consequence to all broadcasters. And as an extra bonus, it reveals the FCC’s current regulatory take on cigarette advertising.

There’s something for everybody here. Not all of it, though, makes much sense.

The case arose when a presumably disgruntled former officer of the licensee filed an informal objection directed to the station’s license renewal application last year. According to the complaint, the station had violated the prohibition against airing “commercials” on at least three occasions. Further, during the last five months of the license term, the station had broadcast no issue-responsive programming other than some PSA’s aired between midnight and 5:00 a.m. At least that’s what the complainant claimed. The Division has now granted the renewal, but not before running the licensee through the wringer several different ways.

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Update: Indecency Comment Deadlines Established

Indecency public notice hits the Federal Register.

Earlier this month we reported on an odd public notice soliciting comments about the FCC’s indecency policy. That notice has now been published in the Federal Register – but that doesn’t mean that the notice makes any more sense now than it did when it first appeared.

The title of the notice still says that the FCC is seeking “comments on adopting egregious cases policy”, but that’s the only time the term “egregious cases policy” shows up. As a result, it’s far from clear exactly what we’re supposed to be commenting on. You would think that, if the FCC does have some “egregious cases policy” currently in effect – which is what the full text of the public notice released on April Fool’s Day indicated – the Commission might let us all in on the precise details of that policy so that we might be able to comment on it at least quasi-intelligently. Apparently not.

As we noted in our initial post, the utility of any record likely to be compiled in response to the notice’s nebulous invitation for comments is dubious. How, after all, is a commenter supposed to organize his/her/its comments in a coherent and useful way? And how can the Commission’s staff be expected to process those comments? Without any apparent context or direction, it’s hard to see what the staff can do with them.

If this is how the Commission proposes to deal with the indecency issue, that issue is likely to be with us, unresolved, for many years to come.

In any event, the Federal Register publication establishes the deadlines for comments in response to the notice. Comments are due by May 20, 2013, and reply comments by June 18.

Cellular Wars: The Employees Strike Back!

Anonymous complaints about jamming result in six-digit fines.

We have previously reported on the FCC’s campaign to stamp out cell phone jamming devices. It turns out that the Commission has apparently found some guerilla allies in that campaign. In two recent Notices of Apparent Liability, two companies have been whacked with six-digit fines – $126,000 in one case, $144,000 in the other – for operating jammers. Both times the Feds were called in by anonymous tipsters.

In each case, the company admitted to operating multiple jammers. Seems they were trying to discourage  employees from using their cell phones in the workplace. While the FCC’s orders obviously don’t identify the complainants who ratted out the companies, we think it’s probably a pretty good bet that the tips came from company employees who wanted to be able to make cell calls from the workplace.

Both of the target companies ‘fessed up to acquiring the jammers online from overseas sources. One of the companies – Taylor Oilfield Manufacturing – claimed that it had fired up its jamming efforts “following a near-miss industrial accident that allegedly was partially attributable to employee cell phone use.” No matter, responded the FCC. Jamming is prohibited, and that’s all there is to that.

To emphasize how seriously it takes this kind of violation, the Commission piled on when it came to calculating the fines.

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Indecency Alert: New Unannounced "Egregiousness" Standard Now Apparently in Effect, But More Changes May Be On the Way, Eventually

Odd public notice also touts herculean accomplishment: summary dismissal of “more than one million” pending indecency complaints

In a public notice that surely ranks among the most bizarre any of us are likely to see, the FCC’s Enforcement Bureau and General Counsel have made three startling announcements about the Commission’s broadcast indecency policy. According to the notice, for the last seven months or so the Enforcement folks have been applying a new – but not formally announced – standard of “indecency” which is not subject to any official definition, as far as we can determine. And while the Enforcement Bureau and GC both commit themselves to continuing to implement that undescribed “standard”, they have now initiated, in a semi-comic way, an inquiry into some possibly significant changes to major elements of the Commission’s indecency policy.

This could have been an April Fool’s Day prank, but we’re guessing it wasn’t.

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FCC Announces Restoration of Media Bureau

The Media Bureau is back! Did YOU miss it? WE did.

Looks like the successful hack of the FCC’s computer network in September, 2011 – which we reported on back in February – may have been more intrusive than the government has let on so far. In an unusual public notice, the FCC has acknowledged that the entire Media Bureau apparently went missing sometime in the late summer/early fall of 2011. The agency’s internal computer records reflect that, as of October 1, 2011, all traces of the Media Bureau – historically one of the hardest working and most productive operations within the agency – had been purged from all Commission systems.

As a result, there have been no references to the Bureau on the FCC’s website for the last 18 months or so. The disappearance was apparently not noticed by visitors to the website. We’re guessing that that’s because, thanks to the redesign of the site, those seeking the Media Bureau pages generally gave up in frustration, assuming that the Bureau’s pages (a) were there somewhere, but (b) had been buried so deeply behind various blogs, dashboards, consumer notices and other higher priority matters that they could not, as a practical matter, be located through routine search techniques. (Vestigial cached versions of Bureau materials, including some CDBS records, apparently remained accessible from some computers external to the FCC’s systems, creating the comfortable illusion within the private sector that all systems were still go and things were still Business As Usual within the Bureau.)

While the Commission’s notice stops short of explaining exactly what happened, there’s plenty of solid information from which we might cobble together a reasonable theory.

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Update: PSAP Do-Not-Call Registry Now Effective

Compliance deadline still up in the air pending finalization of operational details

Late last year we reported on the FCC’s adoption of new rules establishing a “do-not-call” registry for Public Safety Answering Points (PSAP’s). PSAP’s, of course, are places where your 911 is answered; the phones there are associated with conventional 10-digit telephone numbers which are accessed when you dial 911 for emergency assistance. The new registry is part of a Congressionally-mandated system intended to prevent automatically-generated marketing calls – the dreaded “robocalls” – from being made to PSAP numbers.

As noted in our earlier post, noncommercial TV and radio stations which use automatic dialing equipment in connection with their fund-raising activities will need to be careful to comply with the new rules. Historically, charitable and political organizations have been allowed to call numbers on the FTC’s “Do Not Call” list because their calls are deemed to be noncommercial and, thus, entitled to greater First Amendment protection. But the FCC’s new PSAP Do-Not-Call regime does not include any such exemption. Since it does impose very serious penalties for violations, attention should be paid by anyone using automatic dialing equipment.

While the PSAP Do-Not-Call rules were adopted by the Commission last October, they did not become effective immediately. That’s because some aspects of those rules needed first to be run through the Paperwork Reduction Act drill at the Office of Management and Budget (OMB). According to a notice published in the Federal Register, however, OMB has now signed off on the rules (principally, Section 64.1202). As a result, they have become effective as of March 26, 2013.

But just because the underlying rules are now effective does not mean that the PSAP Do-Not-Call registry is yet up and running. In its Federal Register notice, the Commission advises that, “[o]nce the operational details of the PSAP Do-Not-Call Registry have been finalized”, the Commission will be issuing a public notice alerting affected entities of the date by which compliance must begin. Check back here for updates.

Outraged FCC Takes Strong Action, Shakes Finger at Robocallers

Barred by law from imposing fines on first offenders, the agency can only issue threats.

Your cell phone rings. You pause the movie, untangle from your significant other, and stride across the room to answer it. “Hello there!” says the cheerful recorded voice. “We’re calling about your credit card! Are you paying too much interest?”

You stab at the hang-up button and head back to the couch, grumbling that there ought to be a law.

Actually, there is. You can read the FCC’s rule right here.  It’s been on the books for about ten years, based on a statute that Congress passed much earlier. Robocalls to cell phones are illegal, period (unless you have expressly agreed in advance).

So how can the robocallers keep doing it? Not only are the calls an irritant, but depending on your cell plan, you may be paying per-minute charges for the privilege of having your life interrupted. Robocalls have gotten so bad the Federal Trade Commission even offered a $50,000 prize for ideas on how to stop them.

Now, finally, the FCC has acted.

The FCC got the goods on two companies that specialize in making robocalls for other businesses. It has evidence that each made more than one million robocalls to wireless phones. Fines can amount to $16,000 per call; for a million calls, that adds up to $16 billion. In practice, of course, the FCC would not actually levy fines that high. But still, the penalties ought to be stiff. In these cases, the actual fines imposed amounted to . . . well, zero.

Not even equal to the victims’ per-minute charges.

How can that be?

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FCC Form 499-A: Updated and Ready to File by April 1

The newly revised FCC Form 499-A and its accompanying instructions are now available, but some expected revisions on wholesaler-reseller USF exemption guidance are conspicuously absent.

It’s March! Spring is right around the corner, the excitement of college hoops is in the air, and you only have a few weeks left to come up with a clever April Fools’ Day prank to play on your coworkers. (If you’re short on novel – and safe – ideas, here’s a classic.) As if that’s not enough excitement, telecommunications providers get to experience the fun of preparing the annual FCC Form 499-A filing due by April 1. 

The FCC has released its annual update of the Form 499-A, including changes to the Form’s accompanying instructions. All joking aside, there really are some interesting aspects to this year’s new 499-A – including some anticipated “guidance” that is conspicuously absent. We’ll discuss that more after we cover some of the 499-A basics.

When to file? 499-A filings are due by April 1. If you’ve filed the 499-A before, you know it’s a process that has undoubtedly contributed to the madness in March. It’s as fun as filing your taxes but with virtually no possibility of getting a deadline extension. So don’t be a fool, and don’t miss the April 1 due date – the potential penalties are no joking matter.

Who has to file? With very few exceptions, telecommunications providers of all kinds must file the 499-A. This includes, for example, providers of wireless and wireline telephony, interconnected and non-interconnected VoIP service, audio bridging service, prepaid calling cards, and satellite services. A common misconception is that the 499-A and other FCC requirements don’t apply to non-voice/data services or to companies that simply buy and resell the services of other carriers. Don’t be fooled (there’s that word again): the definition of telecommunications is quite broad (basically, any transmission of information could fit) and the 499-A’s applicability is vast.

(REMINDER: The FCC’s new accessibility-related recordkeeping certification is also due by April 1. If you’re required to file the FCC Form 499-A, you’ll most likely need to also file this new certification. Sorry, not joking here, either.)

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EEO Audits Announced; FCC Eases Burdens, But For Whom?

Some filing requirements have been reduced, but underlying recordkeeping remains unchanged.

It's that time again. The FCC has announced its first round of random 2013 EEO audits to radio and television stations. And this year the Commission tells us that it’s trying to make life easier for the licensees who made the list. You might want to take that claim with a grain of salt, though.

Each year, the FCC audits approximately five percent of all radio and television stations, with the lucky stations selected randomly. (Here’s a list of this year’s selectees.) The goal of this spot-check ritual is presumably to keep everybody on their toes and ever-mindful of their ongoing EEO obligations. Those obligations require broadcast employment units with five or more full-time employees to recruit broadly for minority and female applicants for all job openings. “Recruiting broadly” entails (among other things) distributing notices of openings to multiple potential sources of referrals. The FCC also expects licensees to maintain detailed records of those recruitment efforts.

Historically, audited stations have been required to respond to the audit letter by submitting a lot of paperwork.  What’s a lot? Think dated copies of every notice (including advertisements, bulletins, letters, faxes, emails . . . you get the drift) sent to every one of the station's employment sources for every job opening that occurred during the period covered by the last two annual EEO public file reports. And for on-air ads, don’t forget dated log sheets for each time the ad ran. (Stations with fewer than five full-time employees in the relevant employment unit were spared the burden of sending all this paperwork in.)

But things are different this year.

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The Five-Year Enforcement Shot Clock: Has the FCC Finally Begun to Acknowledge It?

Forfeiture cancellations suggest possible path to clearing backlogged complaints (and enforcement holds).

It appears that the Commission may have taken the first steps – baby steps carefully cloaked from public view, perhaps, but steps nonetheless – toward addressing its hopeless backlog of broadcast complaints. In a series of super-low-key actions in recent weeks, the Media Bureau has quietly cancelled a number of previously assessed forfeitures. The actions have been reflected in terse (and we do mean terse – check out this example) letters that provide no explanation for the cancellations. But based on the answers we got to some informal inquiries, we figure that these cancellations could be the harbinger of considerably more dramatic developments on the complaints front.

It appears that the recent forfeiture cancellations have all involved the same general fact pattern. The Bureau issued a notice of apparent liability (NAL) and/or forfeiture order for violations which occurred significantly more than five years ago. The target licensee responded by arguing that, thanks to 28 U.S.C. §2462, the FCC is statutorily prevented from collecting the fines, so they should be cancelled. That argument has been initially rejected by the Bureau in some cases (here’s an example), but the licensees have pressed their argument before the Commission in applications for review. 

And now, we understand that the Bureau has been directed by higher-ups in the agency to cancel the forfeitures in light of that Section 2462 argument. The Bureau’s cancellation letters are, we are told, the result of that direction.

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FCC Gives Cell Phones a Boost

New devices should help to eliminate “dead spots” with little risk of interference.

Despite the promise of ubiquitous cell phone coverage, we are all too familiar with the dreaded phenomenon of dead spots. Historically, cell users frustrated by that phenomenon often fought back by using signal boosters that receive and re-transmit cell phone signals to improve coverage. Recognizing the obvious desirability of boosters, but concerned about their potential for interference, the FCC has now adopted a new comprehensive regulatory approach to boosters. As a result, we can look for a new breed of consumer signal boosters hitting the market soon, probably by year’s end.

This should come as good news for consumers . . . unless you rely upon poor signal coverage as an excuse to avoid calls from your mother (shame!), have an aversion to compulsive cell-phone talkers (like some of us here), or have already purchased an existing device that’s not compliant with the FCC’s rules (in which case you may need to upgrade).

Previously, the FCC did not specifically prohibit boosters, but its rules were a bit fuzzy. For years various groups expressed concern that “unauthorized” boosters were causing harmful interference to wireless networks. To address those concerns, the FCC initiated a formal rulemaking to look into the issue in 2011. The result: two new categories of boosters, subject to different requirements.

“Consumer Signal Boosters” are “out-of-the-box” devices for personal use by individuals to improve cell coverage in a limited area, like a house, a car, an RV, a boat, etc.  “Industrial Signal Boosters” are all others.  Deployed by wireless providers, they serve larger areas, like campuses, hospitals, tunnels, airports, office buildings, etc. Since such industrial boosters aren’t significantly affected by FCC’s latest action, we’ll focus here on the new category of Consumer Signal Boosters. (Also unaffected by the new rules are “femtocells,” which connect to the network though broadband Internet access rather than licensed cell frequencies.)

Ready to get boosted?

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Some TV Broadcasters Relieved of Obligation to Upload Some (But Not All) Issues/Programs Lists to Online Public Inspection File

But paper copies of those lists must still be maintained for public inspection at the station, and the waiver is subject to some limiting conditions

Full-service and Class A TV licensees take heart! The Media Bureau may have let many of you off the hook with respect to one component of the online public inspection file requirement.  In particular, the Bureau has announced that stations whose licenses were not renewed during the previous renewal cycle may opt not to post to the FCC’s online public file system their quarterly issues/programs lists relating to the earlier license terms covered by those filed-but-not-yet-granted renewal applications.

Before you start doing the Snoopy dance, be aware that there are at least three gotchas here.

Some background first. 

As we all know, full-service and Class A TV folks are required to upload their public inspection files to the FCC-maintained online system by February 4. The public file rules (for both commercial and noncommercial licensees) require that those files include quarterly issues/programs lists dating back to the date on which the grant of their last renewal application became final. 

The problem is that the last renewal grant, for many TV licensees, dates back into the 1990s.  That’s because many TV renewal applications from the last renewal cycle still haven’t been granted, in many (if not most) cases thanks presumably to the dreaded “enforcement holds” arising from pending complaints lodged against the station. As a result, in order to comply precisely with the public file rule, a TV licensee whose last renewal is still in deferred status would have to upload an extra eight years’ or so worth of issues/programs lists.

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Online TV Public Inspection Files: Tick, Tick, Tick . . .

The deadline for completion of the upload process is nearly here – are you ready?

TV licensees (that is, full-power and Class A licensees) – this is your final warning from us here at CommLawBlog. You’ve got until February 4 to get your public inspection file uploaded to the FCC’s online system. That’s only two weeks from now, so if you haven’t gotten started on this yet, now would be a good time.

We have previously provided a number of tips on this topic: how to access the system; once you’re in, how to upload the required materials; what documents have to be uploaded. If you missed those posts, click here and here to get started.

We’re not going to re-visit the myriad details of the new rules, their genesis, their implementation, etc., etc. Been there, done that.

We do, though, want to offer a cautionary reminder.

We haven’t canvassed the status of everybody’s public files. It’s possible – maybe not likely, but possible – that everyone has already done everything that they need to do, and our warning here is a churlish and unnecessary bit of hectoring. If you, dear reader, have uploaded your public file already, congratulations, and please accept our apologies for suggesting otherwise. But for everybody else, we do want to underscore one consideration that should motivate any folks who have been dragging their feet. 

The FCC’s online public file system is, ahem, an ONLINE public file system. Because of that, anybody anywhere anytime is in a position, unbeknownst to you, to check the status of your file. Once the deadline for completing the upload process arrives – that would be on February 4 – any shortcomings will be rule violations for which the Commission could issue fines. And anybody, anywhere, anytime will be in a position to identify such violations and bring them to the FCC’s attention.  Even if the Commission opts not to start handing out fines immediately (and while the Commission may indeed restrain itself, particularly in the initial phase, such self-restraint is not mandatory), it’s hard to imagine a greater incentive to get your file in order by February 4.

Telecom Tickler 2013 - CPNI Certifications Due By March 1

If you’re a telecommunications carrier or interconnected VoIP provider, now’s the time to get out your calendar, turn it to early February or so, and mark in big red letters: “CPNI CERTIFICATIONS DUE MARCH 1, 2013”. And don’t forget to follow up by that important deadline.

CPNI here refers, of course, to Customer Proprietary Network Information (but you probably already knew that), and the certifications that are due at the Commission by March 1, 2013 are required by the FCC’s rules (as you hopefully already knew as well.) The FCC has issued a convenient “Enforcement Advisory” to remind one and all of the deadline. Like similar advisories in past years, this year’s includes a helpful list of FAQs and a suggested template showing what a certificate should look like. Heads up, though – this year’s advisory specifies that CPNI includes the numbers of calls made and received; advisories in past years referred only to “phone numbers called”. Additionally, in this year’s advisory voicemail is specifically included among the services covered by CPNI.

As we have explained annually for the past several years, the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure.  The rules themselves are set out in Subpart U of Part 64 of the Commission’s rules, if you want to check them out yourself. Here’s a link that will take you there, but you might want to stock up on No-Doz® before heading there.

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FCC Bars Non-Emergency Robocalls to PSAP Numbers

New rules impose new obligations, hefty potential penalties, on politicians and non-profits (including NCE broadcasters) who use automatic phone dialing gear for public outreach.

Unwanted marketing telephone calls are merely annoying for most of us, but in some cases they’re actually dangerous. A marketing call that goes to a number in a 911 service center can block capacity needed for an emergency call – basically, it ties up a line that could and should otherwise be open for real emergency calls, not commercial come-ons or requests for contributions – and the results can be disastrous. 

Simply blocking “911” from automatic dialing equipment won’t do the trick. That’s because the well-known “911” is just an expedient device making it easy for the public to reach help in case of an emergency. In fact, when you dial “911,” your call is directed to a conventional 10-digit phone number at a Public Safety Answering Point, or “PSAP”. The full 10-digit numbers associated with PSAP’s aren’t generally publicized, but that makes no difference to automatic equipment that initiates marketing calls. That equipment simply dials random or sequential numbers; the odds are that such calls will hit some PSAP numbers sooner or later.

The FCC has now adopted rules establishing a new and separate “do-not-call” registry designed specifically to protect PSAP numbers from non-emergency calls. Why? Because Congress told them to do it in the Middle Class Tax Relief and Job Creation Act of 2012 – the same sweeping law that brought us, among other things, the reverse and forward auctions aimed at TV spectrum repacking. The new rules apply to both voice and text messaging calls to PSAP numbers. Congress wasn’t fooling around, and neither is the FCC. The statute mandates fines of at least $100,000 and up to $1 million per call for automatically dialed calls (“robocalls”) directed to PSAP numbers. Telemarketers must check the FCC’s database at least once every 31 days.

We hope that most, if not all, of you are familiar with the “Do Not Call” list created several years ago by the FCC and Federal Trade Commission (FTC). You can put your home number on the list at www.donotcall.gov (some 209 million numbers have been registered). Telemarketers (at least those who observe the law) are not allowed to call numbers on that list.

But the FTC’s “Do Not Call” list doesn’t stop all uninvited – and possibly unwanted – calls.

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Update: FCC Seeks Input on Proposed Change in Contest Rule

 Ten-month-old proposal takes first step toward possible rulemaking.

Last January, we wrote about a proposal by Entercom Communications Corp. to change the FCC’s on-air contest rule. As we all know, that rule requires that, when a station promotes a station-conducted contest on the air, the station must disclose – on the airall the material terms of the contest.  Such disclosures can be a real drag programming-wise, even when they’re jammed into the kind of compressed super-fast babble normally reserved for extended disclaimers about sketchy products. 

Entercom has sensibly suggested that broadcasters be permitted to post contest rules on their stations’ websites, rather than subject listeners to the fine-print recitations the Commission currently requires.  (Note that the Enforcement Bureau has expressly held that, under the current on-air contest regulation, licensees may not rely exclusively on website posting of contest rules to satisfy Section 73.1216.)

Ten months after Entercom’s petition rolled in the FCC’s door, the FCC has finally gotten around to asking how anybody else feels about the proposal. If you would like to chip in your two cents’ worth, you’ve got until December 20, 2012 to let the Commission know. This invitation for comments does not mean that the Commission will for sure change the rule, or even issue a notice of proposed rulemaking (which would be a necessary step before the rule could in fact be changed). But the invitation does give interested parties the opportunity to let the Commission how they really feel about this issue. A solid show of support at this stage could improve the prospects for the eventual adoption of Entercom’s proposal.

LightSquared's Plan B, Out for Comment

LightSquared proposes to move its cell-type service away from GPS frequencies . . . and into a Weather Satellite Band.

The FCC has requested comment on a Petition for Rulemaking filed by LightSquared Subsidiary LLC seeking a new co-primary allocation permitting non-Federal terrestrial mobile use of the 1675-1680 MHz band.

You remember LightSquared – the company that wanted to deploy a tower-based wireless broadband network in the 1545-1555 MHz satellite downlink portion of the L Band, close to GPS frequencies. GPS users objected, and the National Telecommunications and Information Administration (NTIA) which administers federal spectrum, decided GPS interference concerns could not be overcome, whereupon the FCC pulled LightSquared’s tentative authorization.

With its recent Petition for Rulemaking (and other documents filed in late September), LightSquared seeks a work-around to its GPS headache (and possibly a Hail Mary to resurrect the company, which is now in bankruptcy).

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FOIA Request Turns Up Info on Non-FCC-Compliant Transmitters.

Persistent sleuth Michael Marcus obtains, posts document shedding light on recurring interference to airport weather radars.

In our recent blog post about an AT&T wireless Internet service causing interference to an airport weather radar in Puerto Rico, we asked whether the FCC had charged AT&T with the wrong offense. Because the transmitter operated outside its FCC-certified frequency range (among other problems), the FCC determined it did not qualify for unlicensed operation, and so fined AT&T for not having a license – even though AT&T could not have obtained a license for that service.

Our friend Michael Marcus, a spectrum-savvy engineer (and former FCC official), asked a different question: how did the transmitter get to be operating on a non-certified frequency? Where most of us would be content to mull this over in our idle hours (if it occurred to us at all), Marcus is made of different stuff. He not only took the question to the highest reaches of the FCC, but managed to get some answers.

Modern radio transmitters, like most other modern devices, are controlled by software. The FCC recognizes a category of transmitters called “software defined radios,” or SDRs, which can be legally updated or modified by software changes, including those downloaded over the air. But most transmitters do not qualify as SDRs. Once certified by the FCC, their properties have to be locked in. The software is supposed to be secure against changes, particularly those that would take the transmitter out of compliance and lead to, say, interference to airport radar.

AT&T’s Puerto Rico transmitter was certified for operation over 5735-5840 MHz, but it was being operated at a frequency outside that range. Moreover, the transmitter lacked the required capability to listen for weather radar signals, and if it found them, to avoid the frequencies on which they occur – a feature called “dynamic frequency selection,” or DFS.

The transmitter was manufactured by Motorola, which knows how to comply with FCC technical rules. But the transmitter was non-compliant when FCC inspectors found it in operation – on a non-certified frequency and lacking DFS – in AT&T’s Puerto Rico system. Moreover, the FCC has identified other non-compliant transmitters operating in the same band. In every case we know of, the transmitter was made by Motorola, and all came from the same “Canopy” product line. 

What went wrong?

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AT&T Fined for Not Having Unobtainable License

FCC action follows interference to airport weather radar.

The FCC has confirmed a fine of $25,000 against AT&T for operating a Wi-Fi-type device that caused interference to a weather radar at a Puerto Rico airport. Yes, it appears that AT&T slipped up. But we think the FCC fined it for the wrong offense.

The problem stems – as do many FCC problems – from the fact of an overcrowded spectrum. Almost every useful frequency is shared by multiple users. Part of the FCC’s job is to set priorities among them.

One such choke point occurs in the band at 5470-5725 MHz. Since 1998, the FCC has allowed relatively high-powered devices to use highly directional antennas in this region, all without a license. The band is popular among companies – called “wireless Internet service providers,” or WISPs – that provide Internet service to locations not easily reached by other broadband facilities.

A 2003 expansion of the band produced an overlap with frequencies also used for radars that detect “wind shear” near airports. This condition is potentially dangerous to aircraft flying close to the ground, as when approaching the runway to land, so the radars are important to flight safety. They operate at 5600-5650 MHz, squarely within the 5470-5725 MHz WISP band. The initial rules for WISPs (and other unlicensed users of the band) required devices to (a) sniff the air for radar signals, and (b) if those signals are found, to avoid the frequencies on which they occur  – a capability the FCC calls Dynamic Frequency Selection (DFS). After interference occurred anyway, the FCC worked with device manufacturers and radar operators to clarify the rules. When some interference persisted, the FCC refrained from shutting down the WISPs, as it had a right to do, and instead sought the WISPs’ cooperation in heading off the problem.

Then came the AT&T event.

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Piercing the Corporate Veil, FCC-Style

You think putting your license in a limited liability entity will always protect you? Think again. The FCC is holding an LLC’s owner personally accountable for a proposed $1.7 million fine because of his company's alleged misconduct. How’s that for “limited liability”?

Many, probably most, FCC licenses are not held by individuals. Rather, they’re held by organizations – corporations, or their near relations, limited liability companies, and the like. You might assume that corporate law protects individual shareholders in the FCC’s regulatory sphere in the same way that it does in the court system.

You would be wrong.

A recent Commission decision indicates that in some circumstances the FCC can – and will –look beyond the corporate form and hold shareholders personally liable for licensee obligations, even in situations where a court wouldn’t ordinarily be expected to.

Whether you love them or hate them, corporations are a prominent feature of the American economic landscape. A corporation is a legal “body” – an entity separate and independent from the individual people who own and control it. A corporation’s debts and liabilities come out of the company coffers; investors and owners can lose only as much as they put in.

The protected investors are not the only beneficiaries of this system. The broader economy, which affects everybody, wins, too. The centuries-old theory is that “limited liability” stimulates investment and keeps the economy bustling; would-be investors know that no matter how bad things go at the corporate level, their personal bank accounts (and houses, and cars) won’t be snatched up to cover the liabilities of the corporation.

But the principle of limited liability doesn’t always comport with the FCC’s idea of regulatory justice. Take the case of telecom company Telseven, a limited liability company.

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Reminder: Video Emergency Info MUST be Accessible to Hearing- and Vision-Impaired Viewers

Obligation to provide viewers with disabilities ALL crisis-related announcements can affect video providers well outside immediate geographic area of the crisis.

Another sign of the season – the hurricane and wildfire season, that is. The Commission has issued its by-now-annual public notice reminding video distributors everywherenot just in areas prone to particular types of disasters – of their obligation to make all emergency information accessible to people with vision and hearing disabilities. As broadcasters, cable/fiber system operators and satellite television services have learned from past experience, there are no exceptions to this requirement, and no excuses will be accepted for less than full compliance – even in areas well away from the zones directly affected by the emergency conditions. And let’s be clear: this requirement is over and above routine closed captioning or video description obligations. Existing, everyday procedures to meet those routine obligations may not be enough during an emergency.

Section 79.2 of the FCC’s rules requires that all video distributors make “emergency information” “accessible” to those with vision or hearing disabilities (the latter by closed captioning or other visual means). “Emergency information” is defined by the Commission as information

about a current emergency, that is intended to further the protection of life, health, safety, and property, i.e. , critical details regarding the emergency and how to respond to the emergency.

Emergencies covered by the rule include such natural disasters as tornadoes, earthquakes, hurricanes, floods and wildfires. The rule also covers man-made disasters such as discharges of toxic gases and industrial explosions.

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FCC to Non-Cable MVPDs: Aero Freqs? No Leaks!

Universities, elder care residences, hospitals, hotels – all could be subject to potential penalties for signal leakage if they happen to be non-cable video program distributors using aeronautical frequencies.

Universities, hospitals, hotels, apartment complexes, office buildings, even prisons.  Don’t look now, but you might have signal leakage problems that could get you into serious trouble with the FCC.

That’s the take-home message of a recent FCC public notice aimed at non-cable multichannel video programming distributors (MVPDs), warning them of their obligations to notify the Commission prior to the use of any aeronautical frequency bands by their systems. The public notice coincided with the release of three separate citations – addressed to an inn, an elder care residential facility, and a rehabilitation hospital – seeking more information about possible violations of those obligations and warning of potential fines and other penalties should any violations persist.

Obviously, the FCC is trying to get the word out that enforcement in this area may be on the upswing. So if you’re a non-cable MVPD – whether or not you’re aware that you fit in that category – you’d be wise to pay attention.

A couple of definitions are in order.

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Fifth Circuit Short Circuit: Court of Appeals Limits Rights of FCC Forfeiture Defendants

The Fifth Circuit has separated when and where a forfeiture defendant can raise defenses based on fact or on law.

Suppose you receive a Forfeiture Order from the FCC demanding a large check for allegedly violating FCC rules, as happened to Jerry and Deborah Stevens back in 2010. And suppose you want to raise a challenge. When and where do you do that?

The U.S. Court of Appeals for the Fifth Circuit has chimed in with a ruling that stirs up these already turbulent waters.

After the usual preliminaries, here and here, the Enforcement Bureau issued a Forfeiture Order that dinged the Stevenses $10,000 for operating a pirate FM station out of their home without a license. Although at very low power, the transmitter nonetheless exceeded the permitted power levels for an unlicensed device. The Stevenses did not pay. Eleven months later, the FCC sued them in a Texas federal district court to collect the money. The Stevenses objected that their FM station reached only one state, and claimed the FCC had jurisdiction only over “interstate” radio communications. Accordingly, they argued, the Forfeiture Order was invalid, and the FCC’s lawsuit should be dismissed. The district court declined to dismiss; the Stevenses appealed to the Fifth Circuit.

The Fifth Circuit’s problem was to reconcile two statutes.

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FCC Consent Decree Puts Whammy on Fender

Not to be strung along, FCC shreds instrument maker’s apparently faulty paperwork. 

The FCC regulates most digital devices, which nowadays include almost anything having an on/off switch. Non-compliance can have unpleasant consequences. Latest to find itself center stage in the FCC’s spotlight: the iconic guitar maker Fender Musical Instruments Corporation, which makes the Stratocaster, Telecaster, and other instruments and electronic gear that have dominated pop, rock, and jazz for generations.

Audio manufacturers in particular have recently been targets of FCC enforcement, including this case and this one. Fender signed a consent decree in which it did not admit guilt, so details of its alleged offense are sparse. But it fretted enough to pay $265,000 to settle the matter, which apparently involved faulty paperwork connected with the importation of bass amplifiers, pre-amplifiers, tuners, audio mixers, and wireless microphones, packaged either separately or with musical instruments. Fender may also have slipped up in providing required labels and information in its instruction manuals.

So far as we can tell, the FCC did not allege that any of the devices involved actually failed to meet required technical standards. The shortcomings appear to consist entirely of omissions in documentation and labeling. Which is a shame, because the underlying rules are just not that hard to follow. Fender's problems should strike a chord with any company that manufactures or imports any kind of digital equipment.

After Settling for $1.25 Million, Does Verizon Still Charge for Tethering?

Carrier made “voluntary contribution” to resolve “network neutrality” charges on its 4G frequencies.

Remember the debate about “network neutrality”: the principle that an Internet service provider should not discriminate among Internet sites or technologies? Verizon Wireless remembers; it recently agreed to pay $1.25 million to settle an alleged violation. But our own very limited testing suggests the alleged violation may persist.

Verizon’s problems began not with the network neutrality rules governing all Internet providers – those remain to be adjudicated – but with a specific rule that applies only to certain wireless companies.

At around the time the neutrality debate was first heating up, the FCC was busy making plans to auction the 700 MHz band for mobile data applications. At Google’s instigation, the FCC imposed a limited neutrality rule on one portion of the 700 MHz spectrum, called the “C Block.” Licensees on those frequencies, said the FCC, “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice . . . .” When the C Block spectrum was auctioned off, Google bid up the price to the FCC’s minimum and then dropped out, leaving Verizon to take the spectrum in most places.

Skip ahead a few years, while Verizon builds out its C Block facilities. . . .

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$68K for Unlicensed STLs - Could That Be You?

Hefty fine serves warning: be sure your auxiliaries are properly licensed or be prepared to pay.

It’s important not to lose sight of the Little Things. Your primary operating license? That’s a Big Thing. You know where that stands, and you make sure that everything about it is in good order. But how about your auxiliary licenses – studio-transmitter links (STLs), remote pickups, that sort of thing? Those Little Things may seem like unimportant incidentals in the greater scheme of your operation, but heads up: the FCC doesn’t share that perception.

One broadcaster found that out the hard way: it got spanked to the tune of $68,000 in fines arising from four STLs whose licenses turned out not to be in proper order. You can find the four separate orders here, here, here and here.

This might be a good time to check up on your STLs, just to be sure.

For the uninitiated, STLs are RF devices that take a station’s signal from the studio to the transmitter. All broadcast auxiliary authorizations (STL, remote pickup, intercity relay, etc.) tend to be inexpensive and low maintenance. They renew automatically with the main station license, so you don’t need to file a separate renewal application for them. In the hierarchy of FCC authorizations, they rank low on a couple of scales: the filing fee for a new or modified STL is a scant $150, and the annual regulatory fee for each STL has been a paltry $10 for several years now. While the process of obtaining a new STL may entail some additional fees (for frequency coordination, engineering services, legal services, etc.), STLs are obviously not a high end investment.

But that doesn’t mean you can simply forget about them.

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Student-Run College Radio: A Species Endangered by FCC Fines?

By beating up on college stations, the FCC creates a threat to the viability of college radio that could have unfortunate long-term effects.

The FCC has been slapping forfeitures left and right on college-owned, student-run radio stations. Three recent examples: $6,500 to a station operated by students at Bethany College in Bethany, West Virginia, $10,000 to a Rollins College station, and another $10K to a Toccoa Falls College station.

The misconduct underlying those fines was not especially earth-shattering: a late-filed renewal, some missing issues/programs lists, occasional failures to notify the FCC when the station is off the air for more than 10 days, that sort of thing. Nothing really to write home about.

We at Commlawblog.com can understand the FCC’s position. Rules are rules, and when rules get broken, there are (or should be) consequences. 

But there’s a bigger picture here that the FCC may be missing. By imposing such fines on student-run stations that are probably already money-losers for their parent educational institutions, the Commission may be hastening the demise of such stations.

And that would be a serious loss to the broadcast industry and the listening public.

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Lack of Little Label Language Leads to Elgato Liability.

Company pays $2,800 to settle for omission of required language from user manual or packaging.

Even if you comply with all the big rules, sometimes the little rules will turn around and bite you.

The FCC has technical rules governing TV receivers. One of them says a TV receiver may not put out radio-frequency emissions that exceed a stated, very low level, just a few billionths of a watt. The FCC-mandated procedure for ascertaining compliance is simplicity itself: the manufacturer or importer tests the product for compliance and keeps certain records – a process the FCC calls “verification.” There is no submission to the FCC, or to anyone else. But a label on the product is required.

As specified by the rules, the label is supposed to say “This device complies with part 15 of the FCC Rules.  Operation is subject to the condition that this device does not cause harmful interference.” The rule has an exception, though. If the device is too small to carry that much text, the same information can go instead in the instruction manual or on the packaging. The FCC routinely extends this exception to any device smaller than the palm of the hand.

Elgato Systems imported and marketed exactly one model of digital TV receiver, of the type that plugs into a computer. So far as we can tell from the record, the product complied with the radio-frequency emission limit. Elgato even kept up the verification-related paperwork. Due to the small size of the device, it was not required to carry the label quoted above. But Elgato did not provide the label text in either the instruction manual or on the packaging.

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Update: Supremes Shut Down FCC Appeal in Janet Jackson Case

Eight years after the half-second exposure, the Janet Jackson case is over – but the indecency debate lives on.

The Janet Jackson case is, for all intents and purposes, finished. 

With a one-sentence order stuck toward the end (at page 13, to be precise) of a routine 15-page listing of mundane orders, the Supreme Court has stuck a fork in the long-running indecency case. Specifically, the Supremes have declined the FCC’s invitation to review the most recent decision from the U.S. Court of Appeals for the Third Circuit, which had twice found fatal flaws in the FCC’s treatment of the Jackson case.

But, as has been customary with just about everything surrounding L’Affaire Jackson, even the Supreme Court’s final order included some unexpected flair.

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The Swami . . . Online!!!

 He’s ready for his close-up.  Are you?

You’ve read his stuff, and you’ve probably wondered – who is this Man of Mystery they call the Swami? Now you can hear him and see him as he expounds, with customary eloquence, about the Supreme Court decision in FCC v. Fox Television Stations. The Swami, Kevin Goldberg, is now available to you on the small screen (probably the one you’re reading this on). He quotes Cher. He quotes Bono. He quotes Nicole Richie. He does it all. Is this a great country or what?

Kevin’s online appearance comes to you thanks to our good friends at LexBlog, the legal-focused blogging platform that hosts CommLawBlog.  He sat down for a short Skype-based interview with LexBlog’s Colin O’Keefe, answering a few questions regarding the history of the case and the issue, the Court’s decision (and why it was unanimous), and the likely impact on broadcasters.   This is part of LexBlogs “LXBN TV”, a cool service that brings blog posts to life.

You can see all 12 minutes and 48 seconds of the interview here.

FCC v. Fox (Supreme Court - Round Two): The Swami Explains

[Blogmeister’s Note:  As we reported, after months of deliberation, the Supreme Court resolved the Fox/NYPD Blue indecency case by, um, not really resolving it. We were hoping that the Court would provide a clear and conclusive resolution of the longstanding tension between the First Amendment, on the one hand, and the FCC’s efforts to regulate “indecency”, on the other. Instead, the Court snuck out the side door, choosing to ignore the First Amendment and rely instead on a very narrow application of the Fifth Amendment. So the First Amendment question lives on, to be decided some other day years from now.

The Court (in a unanimous decision authored by Justice Kennedy) held that the FCC could not penalize Fox or ABC for the particular broadcasts at issue (those would be a couple of awards shows in which presenters let slip with one or two “fucks” or “shits” and an episode of NYPD Blue featuring a very brief glimpse of Charlotte Ross’s tush). While that bottom line ruling is no doubt a relief to Fox and ABC, it does little for the rest of us. Or does it? 

For insight into what the Court’s decision means going forward, we called on the Swami, Kevin Goldberg. In response, the Swami sent us a gazillion-page opus whose central motif was based on a classic – and entirely on point – catchphrase from one of the pinnacles of 1980s cinema.  That’s not what we had in mind, so we have pared his response down here. Devout Swami followers who would like a complete copy of Kevin’s disquisition in its (more or less) original form may request copies through the “comments” option, below.]

Blogmeister: So Swami, when you reported on the oral argument in the Fox case, you counted the votes as 5-3, maybe 4-4. The actual vote turned out to be 8-0. In the words of Mike LaFontaine, “Hey! Wha happened?

Swami:  I may have missed on the vote count, but I nailed the result – both in terms of the victor and, more importantly, the narrowness of the holding. 

Why was I so sure that the Supremes would keep it tight?

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FCC v. Fox: Heading Back to the Second Circuit, Again

Supremes toss FCC's Fox, NYPD Blue actions for lack of notice.

It looks like we may all be going on another spin around the Indecency Merry-Go-Round. The Supreme Court has vacated the Second Circuit’s most recent decisions in the Fox and NYPD Blue cases and shipped them back down for further proceedings. The Supremes’ decision has just been released, so we have not yet had time to get it into the hands of the Swami for full-tilt swamification. Look for a post on that shortly.

In the meantime, a very quick read of the Court’s decision – which was 8-0, with Justice Ginsberg issuing an interesting concurring opinion and Justice Sotomayor sitting this one out – indicates that our earlier prognostication got the correct bottom line (even if we didn't get the justice count quite right). While the decision to vacate the lower court’s rulings, which favored the broadcasters, would ordinarily be seen as a victory for the FCC, that is not the situation here. Instead, the Supremes have determined that neither Fox nor ABC had adequate notice of exactly what the FCC’s indecency policy prohibited. Accordingly, the Commission’s determinations penalizing Fox and ABC for their broadcasts have now been set aside.

But, as we predicted, the Court stopped short of even thinking about reconsidering its 1978 Pacifica decision.

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From the FCC Police Blotter: No Blood from the Stone? Demand More Blood!

Broke licensee who can’t pay $8K fine gets extra $25K fine for not paying first fine.

The FCC has demanded $25,000 from a licensee who failed to make a “voluntary contribution” which it had committed to pay as part of a consent decree (i.e., a settlement agreement in an enforcement proceeding). That earlier payment wasn’t made because the licensee said it didn’t have the $8,000 which it had promised to pay. Tough, says the FCC – mere financial distress will not justify relief if you break your promise.

An AM licensee in Puerto Rico was fined $15K in 2005 for various violations. After several years of back and forth, the licensee and the FCC entered into a Consent Decree, which included an $8K “voluntary contribution” to the U.S. Treasury (we love the way the government uses the term “voluntary” – it reminds us of the things we “volunteered” to do for Uncle Sam in basic training).

Things weren’t going so well business-wise for the licensee (more on that below), and it never paid the eight grand. Wow, the FCC said – short changing the government is no-go in spades. So last year the FCC proposed an additional $25,000 forfeiture for failure to pay the $8,000. 

“Can’t pay,” the licensee responded. How come? According to the licensee, all but two of its owner’s companies are in bankruptcy, and it’s facing “overwhelming debt and almost nonexistent cash”. But the FCC didn’t have to take the licensee’s word for all this – the licensee gave the Commission a number of financial documents. The Commission grudgingly acknowledged that those documents “may arguably support [the licensee’s] asserted inability to pay”.

But so what?

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From the FCC Police Blotter: Misrep Lite - When Thinking You're Being Honest Just Isn't Enough

Texas AM whacked $25K for statement that might have been inaccurate.

One of the most fundamental axioms of communications law: correctness is essential, whether you’re filling out an application, filing a pleading, responding to an FCC inquiry, or whatever. When you tell the Commission something, you had better be right. We’re not talking about affirmatively lying to the Commission. That, of course, is even higher up on the list of mortal sins in the FCC’s catechism. But nowadays, any inaccuracy in what you tell the agency – even if it’s not an intentional inaccuracy – can land you in hot water, unless you can show that you had a “reasonable basis” for your statement. The FCC enforcement folks, whose contributions to the government's coffers have increased dramatically in recent years, have recently driven this point home with considerable vigor.

As we have previously observed, Section 1.17(b) of the Commission’s rules prohibits what we have referred to as “misrepresentation lite”. As my colleague Mitchell Lazarus described it, the misconduct prohibited by the rule

does not involve “misrepresentation” – what many of us know as “lying” – because that requires some element of deceit. No showing of deceit is necessary to trigger Section 1.17. All it takes is the filing of “incorrect” information “without a reasonable basis for believing” that the information is, in fact, correct. This seems to say that any mistake in an application could subject the applicant to a very substantial penalty, even if the mistake is purely unintentional.

An AM licensee in Texas found out about this the hard way.

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NCE LMAs: Profit-generating Monetization Not Allowed

Bureau concludes that KUSF(FM) programming arrangement monetized too much; $50K “voluntary contribution” extracted from buyer and seller

Local marketing agreements – a/k/a LMAs or Time Brokerage Agreements or TBAs (among other catchy titles) – have been a common feature of the broadcast landscape for a couple of decades now. The regulatory boundaries relative to LMAs have become reasonably well established, at least as far as commercial stations are concerned.

For noncommercial (NCE) stations, not so much.

But NCE stations are now officially on notice that, when they broker airtime to a third-party programmer, the collection of any fees in excess of “reimbursement of operating expenses” is verboten.   That news comes to us through a Consent Decree (CD) between (a) the University of San Francisco and Classical Public Radio Network, LLC, on the one hand and (b) the Media Bureau, on the other. The CD provides that the Media Bureau will grant the license assignment of NCE Station KUSF(FM), San Francisco, from USF to CPRN – provided that USF and CPRN make a joint “voluntary contribution” to Uncle Sam to the tune of $50,000. 

Why the hefty price tag (which, by way of comparison, is exactly twice the fine issued to Google for thumbing its nose at the Commission)? Because, under the CPRN/USF deal as initially implemented, CPRN was making it worth USF’s while to hand programming time over to CPRN while the assignment application was pending. Oh yeah, and CPRN and USF guessed wrong about how the FCC would feel about that.

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Audio Division Re-Affirms Ruling: Studio Site Moves Based on Longley-Rice Must Be Approved in Advance

Studio relocation without prior FCC OK leads to $7K fine (minus $1,400 for good behavior)

When it comes to main studio site compliance and Longley-Rice, the Media Bureau’s Audio Division is sticking to its guns. As we reported back in October, 2010, the Division had issued a Notice of Apparent Liability (NAL) to an FM licensee even though its main studio was within the station’s city-grade contour, as required by the rules. Now the Division has followed up with a Forfeiture Order re-affirming that NAL. If you’ve got a main studio whose legality hinges on Longley-Rice signal coverage calculations and if you weren’t paying attention when the NAL came out in 2010, now would be a good time to focus on this. 

What’s the problem with relying on Longley-Rice, you ask? Nothing, as long as you jump through the right hoops in the right order, according to the Division. It seems that this particular licensee’s studio location was not within the city-grade contour according to the FCC’s predicted method, even though it was within that contour as determined by a Longley-Rice analysis. According to the licensee, it performed the Longley-Rice analysis to confirm that the site in question was within the contour as required by the main studio rule; comfortable with that knowledge, the licensee went ahead with the move, simultaneously notifying the Commission of the move. In the notification the licensee asserted that the new location complied with the rules. (It later moved a block or two down the street, to a site that also complied with the rules, according to Longley-Rice.)

More than a year after the first move, the Commission started an investigation when somebody (we’re guessing it was a competitor, but you never know) complained. The licensee explained what it had done. In response, the Division whacked the licensee with a $7,000 fine, even though everybody agreed that, per Longley-Rice, the studio was street legal.

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Don't Touch That REC button . . .

UNLESS and UNTIL you’ve got consent – Section 73.1206 leaves very little wiggle room.

The telephone rule strikes again! Back in February of last year, we thought we made it pretty darn clear that, with very few exceptions, you’re not supposed to record any part of a telephone conversation for future broadcast unless you have first obtained consent from the other party to the conversation. You can look it up – it’s Section 73.1206. And yet, barely three months later, another licensee did just what it wasn’t supposed to do. If only it had paid attention to CommLawBlog.com, it could have avoided a $2,000 fine. Oh well, maybe next time.

Truth be told, this violation was not as bad as some others we’ve seen – including, particularly, the one we wrote about last year. In this case, a station’s morning team called some guy at about 6:00 a.m., possibly to discuss some dispute the guy was involved in. With the recorder running (but not on the air), the announcers ID’d themselves. The guy immediately asked whether he was on the air. No, responded the jocks, but they acknowledged that “[t]echnically you’re being recorded right now.” [Note: Why they qualified that admission with “technically” is not clear, since they were, in fact, recording him. But it was 6:00 in the morning, after all.] The guy astutely advised them in no uncertain terms that he did not consent to the broadcast of his voice.

To which the announcers replied: “Oh bummer”.

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Dead Men File No KidVid Reports

Tales from the crypt: Video Division reaches into grave to yank Class A tickets

 We have previously written about the Commission’s apparent quest to move as many Class A television stations back into the LPTV category as possible.  Presumably this quest is motivated by the Commission’s seemingly all-consuming urge to free up as much TV spectrum as possible for “repurposing”. 

That urge has now driven the Commission’s Video Division to reach into the grave to take a couple of Class A authorizations back from a dead guy. (The two orders may be found here and here.)

The case involves two Class A – er, one-time Class A, at least as of today – stations in Texas licensed to a gentleman named Humberto Lopez. Back in March, 2011, when the stations were both still card-carrying members of the Class A Universe, the Video Division asked how come Mr. Lopez apparently hadn’t filed children’s TV reports (FCC Form 398) for 2006, 2007, 2008, 2009 and 2010. Commission records revealed no such reports, so the reasonable assumption was that no such reports had been filed – but the March, 2011 inquiries were designed to give Mr. Lopez the chance to set things straight.

Wouldn’t you know it, Mr. Lopez died in May, 2011, within a month or two of the FCC’s inquiries. It’s hard to respond to FCC questions where you’re, um, dead.

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Google v. FCC: And the Winner is [REDACTED].

In Rorschach-like NAL, FCC proposes whopping $25,000 (ouch!) fine for impeding an investigation into the Google Wi-Spy controversy.

In a Notice of Apparent Liability (NAL), the FCC has proposed to fine Google. Not, mind you, for the alleged misconduct the Commission first set out to investigate. Rather, Google would be fined for allegedly impeding that investigation – even though the FCC now pretty much concedes that no violation took place. But it’s hard to tell exactly what happened, because large portions of the FCC’s published order are redacted. One thing that wasn’t redacted: the proposed fine. That would be the princely sum of $25,000.

This much is known: between 2007-2010, Google collected Wi-Fi network data all over the world in support of its Street View project. In addition to providing totally bitchin’ online photos of just about anywhere in the world, the Street View project collected network data to support various location-based services. But in collecting those data about available networks here, there and everywhere – including home wireless networks – Google also happened to collect the actual content of various unencrypted communications carried over these networks (i.e., “payload” data) – things like e-mails, text messages, passwords, Internet usage history, and other potentially sensitive personal information.

When word of this surfaced, governments everywhere – federal, state, foreign – launched (with considerable fanfare) investigations, on the theory that the unauthorized collection of that kind of private data couldn’t possibly have been legal.

Our federal government sicced an agency tag-team on Google. First, the Federal Trade Commission (FTC) took a close look at Google’s activities, but closed down its investigation without finding any problems.  The FTC came away convinced that Google didn’t plan to use any of the payload data, would be deleting that data pronto, and was taking steps to improve “its internal processes”. Nothing to look at here, folks.  Show’s over. Just move along.

Then the FCC jumped in.

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FCC Gives T-Mobile an Earful

Carrier socked with potential $819,000 fine for not offering enough hearing aid-compatible phones

The FCC has been extraordinarily vigilant about enforcing the requirement that telecom carriers offer their customers certain minimum numbers of hearing aid-compatible handsets.   This requirement arose in 2008 when the Commission established a gradually increasing quota of acoustically coupled and inductively coupled handsets which carriers must make available to hard-of-hearing customers. The idea is that hearing-impaired folks must have a broad range of handsets of different feature levels to select from.

Although the FCC alerted the industry repeatedly to the requirements of Section 20.19 of the rules, T-Mobile seems to have seriously dropped the ball. According to a recent Notice of Apparent Liability (NAL), T-Mobile came up way short: as many as 33 acoustic hearing aid compatible handsets short in 2009 and 2010, and 14 inductive handsets short in that same period. These shortfalls were clear on the face of the annual report that T-Mobile (like other carriers) must file with the FCC detailing, among other things, the handsets they offer. The NAL doesn’t explain how T-Mobile could have failed to take steps to bring itself into compliance when its own disclosures apparently showed a shortfall in the required handsets.

The price tag for this problem?  $819,000.

Several things are notable about the NAL which, we hasten to mention, is only a preliminary set of allegations, not a final determination. T-Mobile will still have plenty of opportunity to plead its case to the Commission.

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FCC Settles with Individual for Selling Assembled Kits

Putting together AM radio transmitter kits and selling the end product results in $7,000 payment.

The FCC has always been friendly to electronics hobbyists, in part (we suspect) because many of the FCC’s engineers got their own start that way. A lot of hobbyists get their start, in turn, by assembling commercial kits, before moving on to design and build their own gear from scratch. 

Kits could present a problem under the rules that require FCC certification for most small transmitters. It would be inconvenient, to say the least, for each hobbyist to have to test his or her finished product for compliance and get it certified by the FCC. Anticipating the problem, the FCC has long provided an exception for kits. Consumers are free to buy most kits, assemble them, and use the resulting device without paying any attention to the FCC.

Kits, in other words, are essentially unregulated. One Richard Mann dba The Antique Radio Collector tried to stretch this exception.

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Access of Evil? FCC Unveils NOITALS

Don’t be surprised when Broadband the FCC Cat pops up on your screen.

The Commission has long bemoaned the fact that the Great Unwashed are “woefully ignorant” of the nitty-gritty details of their Internet access. Not for long. That bell you just heard was signaling the start of classes at the University of FCC, Online Division. Attendance is required. Prepare to get schooled.

In a surprising move – made all the more surprising by the low-key way in which it was disclosed – the Commission is taking aggressive steps to correct the rampant problem of high tech know-nothingism.

Meet NOITALS – the Nationwide Online Information Tracking and Logistics System. (Apparent pronunciation: “KNOW-IT-ALLS”.) In a public notice announcing, among other things, an expansion of the 2012 Measuring Broadband America Performance Study of Residential Broadband Service in the U.S., the Commission mentions NOITALS, pretty much in passing, without any fanfare at all. The Commission plans to use NOITALS to measure everybody’s Internet access speed, along with other parameters of Internet performance). 

How’s it going to do that? 

It seems that NOITALS enables the Commission to see what’s going on in each individual computer, nationwide, without the intervention of the computer’s user.

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"Mother May I?" - FCC-Style

After rejecting serial petitioner 11 times, FCC confirms that he’ll have to ask permission before he can file anything more on the topic.

Long-time readers will recall the individual who, as of last July, had been turned down by the FCC eleven separate times on the same matter. In the ninth turn-down, the FCC said, “We plan to give no further consideration to this matter, and the staff is hereby directed to dismiss summarily any subsequent pleadings . . . .” Number ten followed that guidance by dismissing in two short paragraphs.

When the individual came back yet again, turn-down number eleven deemed his last several submissions to have been frivolous, and imposed a rare sanction: it required the individual to seek advance permission from the relevant bureau before filing any further documents. Think “Mother May I” or “Simon Says”, but for grown-ups, in official pleadings. In a passage it may have come to regret, the FCC gave him time to comment before the sanction went into effect.

You will not be surprised to learn the affected individual had something to say. The FCC has now responded.

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More Steps Toward TV Band Clearing

Sixteen more Class A stations face the loss of their Class A status.

The thinning of the ranks of Class A TV stations continues.  We reported recently that the FCC has started to propose the downgrading of a number of Class A television stations to LPTV status, presumably to make room for the almighty broadband to take over TV spectrum.  The stations targeted in the first round of that effort had (a) failed to file Children’s TV Reports and (b) failed to respond to FCC’s inquiries about the whereabouts of those reports.  (The Commission later fined a number of other stations which had also failed to file kidvid reports; they escaped the dreaded downgrading because they had at least responded to the FCC’s inquiries.)

Another 16 Class A’s now face the prospect of being demoted to LPTV status. 

Like the stations we’ve already reported on, the latest batch of targeted Class A’s got onto the FCC’s radar by not filing Children’s TV Reports.  In response to the FCC inquiry about those missing reports, each of the three licensees (one holding 13 licenses, another two, and a third one) acknowledged their respective failures to file.  Each also acknowledged that their stations had operated, at most, only sporadically over the last several years.  Two blamed the economy for the extended darkness; one claimed that its non-operation – its two stations had operated a total of less than four months in the last five years – arose from a “need to locate permanent transmitter sites”.   Two of the three licensees’ responses also indicated that their stations no longer had main studios (much less public files located their main studios).

In order to qualify for Class A status, a licensee must maintain a main studio and broadcast a minimum of 18 hours per day, with an average of at least three hours weekly of locally-produced programming and three hours of children’s programming.   From the responses described above, the Commission concluded that none of the 16 stations still qualified to be Class A – accordingly, they’re looking to be downgraded.

The FCC suggests that Class A stations who find themselves temporarily unable to meet the minimum regulatory requirements for Class A status may, in some circumstances, be eligible for special temporary authority to operate at variance from those requirements.  But such STA would be only temporary, and would not cover extended time periods of noncompliance, particularly when the reason for the STA is financial distress.  The Commission is particularly skeptical about stations that close their main studios and/or de-construct their transmission facilities. The result of this strict approach, of course, is to impose the greatest hardship on the most vulnerable. 

The other side of the argument is that no one is proposing to take away licenses; rather, all that’s involved here is a status downgrade (from Class A to LPTV), which still allows the stations to resume operation.  Whether there is a difference between taking away the license and taking away only Class A status remains to be seen after we know more about the prospects of space remaining for LPTV stations after implementation of the FCC’s plan to truncate the TV spectrum by 10-20 channels.

FCC Reminder: Cell Phone Jammers are Illegal

FCC warning follows much-publicized incident on a Philadelphia bus.

The FCC has issued one of its periodic warnings against selling or using jammers to interfere with cell phones, GPS, Wi-Fi, or any other radio-based service.

The story this time begins with a guy named Eric who rides the buses in Philadelphia. Whenever someone on the bus disturbed his tranquility by talking on a cell phone, Eric fired up his pocket-sized cell phone jammer. The caller’s phone stopped working, and Eric resumed his internal dialogue undisturbed. “A lot of people are extremely loud,” explained Eric, “no sense of just privacy or anything.  When it becomes a bother, that’s when I screw on the antenna and flip the switch.”

One of Eric’s fellow passengers works for a local TV station. “He’s blatantly holding this device that looks like a walkie-talkie with four very thick antennae,” she reported to her colleagues in the news department. “I started to watch him and any time somebody started talking on the phone, he would start pressing the button on the side of the device.”  A news crew went undercover and caught Eric in the act.

It must have been a slow news day in Philadelphia. The story went semi-viral, drawing both support and condemnation. Some people, along with Eric, believed that jamming cell calls is not illegal. 

The FCC wants you to know that’s wrong.

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Telecom Companies Take Note: Your Form 499-A Deadline Is Less than a Month Away

It’s that time of year again – all telecoms and VoIP providers must file their annual Form 499-A by April 2.

That “other” April deadline is right around the corner: all telecommunications carriers are required to file FCC Form 499-A by April 2, 2012. If you’re an intrastate, interstate or international provider of telecommunications in the U.S., this probably means YOU (but check below for the short list of exemptions).

 Form 499-A is used to true up the carrier’s Universal Service Fund contributions reported during the previous year. The revenues reported on the form will also be used to calculate upcoming 2012 contributions to the Telecommunications Relay Service, the North American Numbering Plan, and the Local Number Portability Fund.  (For 2012, the proposed “contribution factor” – i.e., percentage of revenues that must be paid – will be a whopping 17.9 percent, up from 15.3 percent in the last quarter of 2011. Ultimately, these contributions come from consumers, who are assessed a surcharge as a percentage of their phone bill.)

The new 2012 form was released on March 5, giving carriers less than a month to get on file. It’s mostly the same as last year, except that now non-interconnecting VoIP providers must file to fulfill their new obligation to contribute to the Telecommunications Relay Service Fund. (That new obligation comes courtesy of the Twenty-First Century Communications and Video Accessibility Act of 2010.)

A reporting company’s initial 499-A filing must be paper and ink; after that, carriers can file online through USAC’s website.

Before starting to fill out the form, a reporting company will need to pull together some financial information – i.e.,billed revenues for 2011, broken down into various categories. There is a safe harbor percentage available for entities that have difficulty separating their telecommunications versus bundled non-telecoms revenues. There is also a safe harbor for cell and VoIP providers to use in breaking out their interstate versus intrastate revenues.

Additionally, carriers with a lot of international revenue should take note of the “limited interstate revenues exemption” (LIRE). That allows companies whose interstate revenues are 12% or less than their international revenues to exclude international revenues in their “contribution base” (the amount upon which their contribution is assessed). Don’t look for this exemption in the Form 499-A instructions; it’s buried in a worksheet in an appendix.

If you’re not sure whether you’re a telecommunications carrier or not, you probably are. The category of mandatory 499-A filers is broad, including resellers, non-common carriers and VoIP providers. However, there are limited exemptions for:

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Missing KidVid Reports Lead to $13K Fines for Class A Stations

FCC is an equal opportunity whacker when it comes to doling out fines.

Last month we posted about the FCC’s apparent effort to thin the ranks of Class A stations, presumably to free up spectrum for broadband.  The targets there were 16 Class A licensees who had not filed all their Children’s TV Reports (FCC Form 398) and who did not respond to the FCC’s letters of inquiry about that failure.  As we suggested then, it wasn’t clear how the Commission planned to deal with Class A licensees who hadn’t filed the required reports but who had responded to the FCC’s inquiries by demonstrating that they had in fact (a) aired kids’ programming and (b) followed up by filing appropriate (albeit late) reports.

Now we know.

It looks like the price tag is going to be $13,000 (per station, not per licensee).  In each of three Notices of Apparent Liability, the Media Bureau has fined the targeted licensee $3,000 for failure to file reports and $10,000 for not having the reports in the public file.  One of the licensees in question has two stations – so it got hit for a total of $26,000.  You can read the FCC’s Notices here, here and here.

The amount of the fines does not appear to vary according to the number of Children’s TV Reports that may have been missed.  One targeted licensee missed 17 reports, another 16, another eight – but they all got the same fine on a per station basis. 

Perhaps more importantly, the amount of the fines does not vary according to the size of the licensee.  An individual licensee holding only three Class A/LPTV stations is treated the same as a large corporate licensee with a score of full power stations.  While little guys can try to get their fines reduced by pleading poverty, the FCC has historically been unwilling to reduce any fine that does not exceed about 5%-7% of the station’s gross revenue, without regard to profitability.  We know of one instance where the FCC’s disinclination to consider the practical economic hardship its fines impose directly resulted in a station’s having to lay off employees to fund the payment. 

The government’s need for revenue marches forward.  And you thought that the FCC’s agenda was about job creation….

Audio Manufacturer Pays $72K to Settle with FCC

Consent decree resolves claim of failure to comply with digital device rules.

For the second time in less than a year, the FCC has moved against a manufacturer of audio gear for violation of its “digital device” rules.

Digital equipment – which nowadays includes almost everything with an on/off switch – generates internal signals that operate at radio-type frequencies. Inevitably, some of that energy leaks out in the form of radio waves. Because the leakage has the potential to interfere with radio communications, the FCC sets maximum limits, and mandates procedures manufacturers must use to establish and document their compliance with those limits.

A company called American Music and Sound (AMS) got in trouble with the FCC for not having complied with those procedures. In entering into a consent decree, it did not admit wrongdoing, but did agree to a “voluntary contribution” of $72,000 to settle the charges. This follows a similar case last May.

The AMS case is troubling because the company manufactures gear for professionals, not consumers, which made it subject to a relatively painless regulatory regime. Compliance with respect to any particular device consists of measuring that device’s radio-frequency emissions (which can be ten times higher than for a consumer product), and putting the test results in a drawer. There are no requirements for the test lab, no submission to the FCC, and no special labeling. (Procedures for consumer products are only a little more involved.)

Other manufacturers might benefit from AMS’s misfortune. If you (a) make a product having any digital components, and (b) do not qualify for a small handful of exceptions, then you are regulated by the FCC and you ignore its rules at your peril.

Can Your Local Police Shut Down Cell Phone Service?

An FCC inquiry follows a transit authority’s deliberate disabling of passengers’ wireless phones.

The FCC has always been interested in preventing interruptions to telephone service. Usually it focuses on failures due to natural disasters, and plain old equipment breakdowns. But now it has a new concern: deliberate service stoppages implemented at the request of a state or local government. Yes, it sounds like something out of protests in the Middle East. But it happened at least once in the United States, and now the FCC is looking for policy guidance, hopefully before it happens again.

Last August, the folks who run the Bay Area Rapid Transit (BART) system in San Francisco/Oakland had word that protesters, objecting to BART police having shot and killed a man wielding a knife, planned to disrupt train service. (See a contemporaneous news account.) The protesters intended to use mobile devices, according to BART officials, to coordinate their activities and share information on the deployment of BART police. Fearing platform overcrowding and other unsafe conditions, and hoping to disrupt the disruptions, the BART people pulled the plug on underground cell phone service. (Protesters nonetheless managed to briefly shut down three stations.)

The BART system is something of a special case, in that BART itself owns the underground wireless network in its tunnels. Its actions consisted merely of turning off its own equipment.

Or maybe the matter is not that simple.

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Telecom Tickler 2012 - CPNI Certifications Due By March 1

It’s that time of year again – that is, if you happen to be a telecommunications carrier or interconnected VoIP provider. If you’re one of them, your Customer Proprietary Network Information (CPNI, for short . . . but you already knew that) certifications are due at the Commission by March 1, 2012. The FCC has issued a convenient “Enforcement Advisory” to remind one and all of the deadline. Like similar advisories in past years, this year’s includes a helpful list of FAQs and a suggested template showing what a certificate should look like. 

 As we have explained before (last year, for example), the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure. (If you’re a glutton for punishment and want to read the actual rules, you can find them in Subpart U of Part 64 of the Commission’s rules. Here’s a link that will take you there, but don’t say we didn’t warn you.) Since 2008, the rules have required that telecommunications carriers and interconnected VoIP providers have an officer sign and file with the Commission a compliance certificate, annually, stating that he or she has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with the rules. The carrier must also provide: (a) a statement accompanying the certification explaining how its operating procedures ensure that it is or is not in compliance with the rules; and (b) an explanation of any actions taken against data brokers and a summary of all customer complaints received in the past year concerning the unauthorized release of CPNI.  

The Commission takes this reporting requirement very seriously – so seriously, in fact, that it has in many instances initiated forfeiture proceedings against carriers who, as it turned out, had fully complied with the rules.

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Last Tango in Translator-Land?

Audio Division turns up the heat on the practice of “hopping” FM translators

The FM Translator Tango.  Always a complicated dance. Some may have figured that it was a harmless pastime, a no-lose bet with zero downside and nothing but upside. 

They may have figured wrong, as a recent Audio Division letter demonstrates

What’s the Translator Tango? It’s the dance in which enterprising FM translator owners hop their stations across significant distances to where they are more useful and more valuable. It’s a slow, gradual dance that uses a series of rule-compliant minor modification applications.  The choreography:  Starting with a construction permit specifying service to Nowheresville, the licensee moves the permit to Better Market. Better Market is invariably far away, so far that, under the Commission’s “major change” rules, the licensee could not ordinarily propose simply to move there in one giant leap. So the dance consists of a series of incremental steps, or hops, each moving the licensee farther away from Nowheresville and closer to Better Market.

Each incremental step involves a number of gyrations. The licensee has to file an application for a new construction permit specifying modified facilities. The Commission has to grant that permit. The licensee then has to construct the modified facilities and file a license to cover them. Then it’s supposed to go on the air from that location. The FCC follows by granting the license. Then the process starts again. Repeat as necessary to get to Better Market. 

We described this process in less terpsichorean terms several months ago. As we reported then, the FCC staff had signaled its great displeasure with the process of moving translators through a series of minor modification applications. You think? In a September 2, 2011 letter, the Audio Division put it about bluntly: “We believe the filing of serial modification applications [for FM translators] represents an abuse of process.” 

Harsh, but perhaps not totally daunting to the die-hard hopper.

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Time for a Change in the FCC's Contest Rule?

Entercom proposes that required disclosure of licensee-conducted contest rules be made on-line, rather than over-the-air.

The promotions department at KOST (and at least some other Clear Channel stations) should be sending “thank you” notes to the folks at Entercom Communications Corp. As we reported just last week, KOST was recently spanked to the tune of $22K for violating the FCC’s contest rule (Section 73.1216) in part by failing to broadcast all the material terms of a contest it was running on its website. (The fact that KOST was a recidivist violator of the contest rule didn’t help it much.) 

But now Entercom (which owns more than 100 radio stations) has filed its own petition for rulemaking asking the Commission to bring the contest disclosure requirement into sync with “how the majority of Americans access and consume information in the 21st century.”  That would be the Worldwide Web, of course. 

According to Entercom, “Americans expect to instantly access information at their fingertips by merely logging on to a website”. That being the case, if the FCC wants to be sure that potential contest participants are advised of the contest’s rules, it should be enough that those rules be available on-line.  Any required over-the-air disclosures can thus be limited to announcements that full contest rules are available on station websites.  (Any web-averse Luddites out there can be taken care of on request by e-mail or fax.)

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FCC STILL Applies Over-the-Air Contest Rules to On-Line Contests

Contest rule violations fetch $22K fine

Almost three years ago we reported on a decision by the Enforcement Bureau indicating that on-line contests conducted by broadcast licensees are subject to the broadcast contest rule if the contest is promoted on the air. The station that got whacked back then was KOST.

Fast-forward three years. The folks in the Enforcement Bureau have issued another fine for pretty much the same misconduct. And check it out – one of the wrong-doing stations is none other than KOST! C’mon, guys – really?

This time around, the station (along with several other commonly-owned stations) ran an on-line contest calling for contestants to make video commercials (for Chevys) and submit them on-line. A panel of “impartial judges” would then review the entries and pick up to 20 finalists that would be posted on the participating stations’ websites for listeners to vote on. No aspect of the contest involved on-air activity (e.g., “listen-to-win”, “be the tenth caller”, etc.), BUT the contest was promoted on the air. 

And that was enough to trigger the broadcast contest rule (Section 73.1216), which requires (among other things) full on-air disclosure of all material elements of the contest. The licensee conceded that it didn’t broadcast the rules. The rules were available on the station’s website – but the Commission requires that the rules be broadcast, so the fact that they were available on-line (or elsewhere) doesn’t mean diddly. That’s Violation Number One.

Upon further review of the contest rules that were posted on the website, the Commission noted an interesting fact. Entries were permitted up to the “close of the Contest Period”. The “Contest Period” was defined as February 11-March 21. So far, so good.

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FCC v. Fox: The Swami Tells It Like It Was, and Like It Will Be

On January 10, the Swami and the Blogmeister took a field trip to the Supreme Court to catch the Fox/ABC indecency argument. Here’s their report.

[Blogmeister note: Last year the Supreme Court agreed to consider the constitutionality of the FCC’s broadcast indecency policies in the context of two cases, one involving comments made during awards shows aired by Fox Television, the other involving an episode of NYPD Blue on ABC. Check our previous posts for more background. The argument before the Supremes was held on January 10. Kevin “the Swami” Goldberg and Blogmeister Harry Cole attended.]

Blogmeister:  I think we can agree that, from the perspective of a broadcaster, the argument was disappointing. After the Second Circuit’s sweeping endorsements of First Amendment rights for broadcasters in Fox and ABC, it was a let-down to hear the far more cautious tone of the Supreme Court Justices.

Swami: Disappointing – maybe. I also thought “demoralizing” at first – but on further reflection, I don’t think this is a lost cause by any means. 

Blogmeister: Interesting. But before we ask you to gaze into your crystal ball and come up with a prediction of the vote, how about your thoughts on the overall arguments? For instance, what happened to the FCC’s interest in protecting children’s innocent ears from the evils of vulgar words? Pacifica was based in large measure on precisely that interest, but there was virtually no discussion of that at all during the argument. Instead, the government harped repeatedly on the notion that broadcasters have been given the use of their spectrum for free by the government, and they have derived “billions and billions of dollars” from that spectrum.

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FCC to Convenience Stores: Oops!

Procedural stumble results in withdrawal of citations and proposed fines

We reported last year on FCC citations against convenience store chains Circle-K and 7-Eleven. We don’t usually think of convenience stores as being subject to FCC regulation. But because the stores stocked prepaid cell-phone handsets, the FCC designated them “resellers of wireless services,” and went on to fault them for failing to file certain reports relating to compatibility of the handsets with hearing aids.

The FCC has now withdrawn those citations along with eight others, plus nine proposed fines.

When the FCC or any federal agency adopts a rule that imposes new paperwork burdens, the hilariously-named Paperwork Reduction Act requires the rule to be approved by the Office of Management and Budget (OMB) before it can go into effect. The FCC ships the newly-adopted rule over to OMB for review, a process which normally takes just a few weeks. OMB almost always approves the rule, even if it triggers staggering amounts of new paperwork, and gives the rule a “control” number. The FCC then puts a notice in the Federal Register saying the rule is effective.

Unfortunately, this seemingly simple process has been breaking down with increasing frequency.

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EEO: Web-only, Word-of-Mouth-only Recruitment NOT Enough

The Internet may be the go-to place for job-seekers, but the FCC still insists on an Old School approach when it comes to broadcast jobs and EEO.

Despite the fact that the Commission has itself acknowledged, repeatedly, that the Internet is an important, maybe even “critical”, resource for job-seekers, broadcasters with jobs to offer had better not rely on the Internet alone when recruiting for those jobs. If they do, they’re looking at a fine that could run into five digits. Ask a couple of licensees – one in Virginia, one in South Carolina – who just found out the hard way.

The FCC has long required broadcast employment units with five or more full-time employees to recruit broadly for minority and female applicants for all job openings. A report of recruitment efforts, including the referral sources that are notified of openings, must be placed in the public file of all stations in such employment units every year; they must also be posted on the stations’ websites (if they have websites). At the middle of the license term and at renewal time, those employment units must submit reports on their EEO efforts to the Commission. And each year the Commission also conducts random audits of EEO performance.

We have cautioned clients for at least a couple of years that the FCC insists on a broad spectrum of recruitment sources. The classic “word-of-mouth” approach and “referrals from friends” are not enough. And as we wrote just a year ago, the FCC has also cautioned that Internet-based recruitment cannot be relied on alone. (Irony alert: the fact that some businesses accept job applications only via the Internet has been touted by the Commission as a justification for its National Broadband Plan, which includes repurposing TV broadcast spectrum for wireless broadband.)

In the two recent cases (released on the last business day of 2011), the FCC nicked two station groups for $8,000 and $12,000 for inadequate dissemination of recruitment notices for some of their openings. For some, but not all, of their openings the groups had relied on Internet and word-of-mouth to spread the word. Not enough, the Commission announced. Its FCC’s words are direct and speak for themselves (although we’ve highlighted a particularly noteworthy sentence below):

The Licensee’s reliance on non-public sources such as word-of-mouth referrals and its own employee board, did not constitute sufficient recruitment as contemplated under the Commission’s rules, which require public outreach. …While the Commission does not require the use of a specific number of recruitment sources, if a source or sources cannot reasonably be expected, collectively, to reach the entire community, as here, a licensee may be found in noncompliance with the Commission’s EEO Rule. Further, the Commission’s interpretation of the EEO Rule does not allow a licensee to recruit solely from Internet sources to meet the requirement to widely disseminate information concerning the vacancy.   

We have been told over and over again by clients that the Internet is just about the only recruitment source that produces any results and that mailing notices of vacancies to a large list of community organizations is an exercise in futility.  That may be so in the Real World, but on Planet FCC things are apparently different – so the wise licensee will continue to keep a good supply of paper and postage stamps on hand.

Commission to Contest-Conducting Stations: Present Prizes Pronto!

Prompt delivery is a material term of contests, according to Commission

If you’re a broadcast licensee thinking about conducting a contest for your audience, heads up. The Commission has just made clear that it expects you to get the prizes into the winners’ hands “promptly”. The failure to do so – or maybe the failure to promote the fact that you’re going to do so (the FCC’s reasoning on this point isn’t a model of clarity) – could cost you an extra $4,000. 

Of course, the FCC’s contest rule – Section 73.1216 – doesn’t say exactly how long the licensee has to award prizes. In fact, the rule doesn’t address that question at all. But in a recently released Order on Review, the Commission held that a licensee’s apparent foot-dragging in the prize delivery department violated the rule nevertheless.

The issue arose in a contest conducted by a radio licensee back in 2005. The grand prize was a two-year lease on a car (or cash equivalent), plus a “trunk load full” of unspecified “Aerosmith memorabilia”. It’s not clear what that “memorabilia” was supposed to include, but it may be safe to assume that the real grand prize was the car lease, which was valued at $8,000.

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TV Shared Services Agreements: Danger Ahead!

Media Bureau concedes Hawaii shared services arrangement is legal, but signals that that might not be enough for renewal

If you’re looking for evidence of the Commission’s ambivalence toward “shared services arrangements” involving TV operations, look no further than a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture (MO&O) released by the Media Bureau the day after Thanksgiving. Although the Bureau acknowledged (as it had to) that such arrangements are not barred by any Commission rules and that the complained about three-station deal in Hawaii didn’t violate any laws, the Bureau couldn’t bring itself to fully bless the deal. 

Instead, it ominously hinted that, come renewal time, the parties to the shared services arrangements might run into some rough water. The agreements may technically be street legal, the Bureau sniffed, but they are still “clearly at odds with the purpose and intent of the duopoly rule”.

So just because those agreements might not violate any rules, the Bureau figures that the Bureau won’t be precluded “from considering whether this or similar transactions are consistent with the public interest within the context of individual licensing proceedings” come renewal time. How’s that for providing useful guidance to the folks who have already entered into, or who may be thinking about entering into, such arrangements? Sure, says the Bureau with its regulatory eyebrow raised to new heights, what you’re doing may be legal and all, but that doesn’t mean we won’t try to find a way to whack you anyway.

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When is a Requirement Not a Requirement?

“Effective dates” can be hard to pin down,  thanks to contradictions, omissions and an overall lack of clarity by the FCC – take Form 477 as an example

The November 7, 2011 edition of the Federal Register contained what appeared at first blush to be a fairly routine notice that certain rules had received approval from the Office of Management and Budget (“OMB”) and were therefore going into effect as of the publication of that notice.   But when we lift up that seemingly innocent flat rock of a notice, we observe a swarm of ugly questions about just how and when FCC rules become effective. Because FCC regulations have the force of law and are enforceable by fines in thousands and even hundreds of thousands of dollars, it is critical that the public know exactly when compliance is required. Yet that seemingly simple detail – when do we have to obey a new rule? – can be hopelessly obscure, as was certainly the case in the proceeding referenced in the November 7 notice.  

That proceeding involved amendments to Form 477, but the same question – i.e., when does a requirement become “effective” – applies to many other FCC proceedings.

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A Closer Look at the 4A's Non-Discrimination Policy

Commissioners cheer new policy, but is it really what they had in mind?

In late October, amid much congratulatory buzz, the American Association of Advertising Agencies (which sometimes refers to itself as the 4A’s) adopted a new “best practices” policy recommending that ad agencies adopt “non-discrimination vendor policies and procedures”. In the eyes of some – Commissioners Copps and McDowell, for two prominent examples – this move was just what the Commission had in mind back in 2007-2008, when it first announced that broadcasters would have to certify (in their renewal applications) that they (that would be the broadcasters) don’t discriminate on the basis of race or ethnicity in their advertising contracts.  The Commission’s action was designed to put a stop to, or at least curb, so-called “No Urban/No Spanish” dictates in ad time buys.

The Commission’s policy is not without its conceptual shortcomings. Not the least of those shortcomings is the fact that, since it’s applicable only to broadcasters, the FCC’s policy leaves a gaping hole in protection against the supposed discriminatory practices to which it is directed. After all, broadcasters are in the business of selling time for others’ commercial messages; broadcasters are thus generally not the ones making the decisions as to which station’s time will be purchased. Moreover, stations are often at least one step removed from those decisions, since advertisers frequently rely on ad agencies in crafting their campaigns, including the stations on which the ads are to be placed.

The new 4A’s best practices statement would seem at first blush largely to fill that hole. As noted above, the announcement was met with laudatory statements from two Commissioners. Commissioner Copps effused that “[t]hese best practices from the advertising agencies will pave the way for more equal treatment,” and that they will have “a positive impact in communities across the country.” 

Hold on there. Let’s take a look at the actual language of the “Non-Discrimination Policy Related to Vendor Selection”.

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Indecency 2011: Third Circuit Sides With CBS, Again

In re-run of 2008 Janet Jackson decision, FCC extends its losing streak in court of appeals indecency cases

In a long-awaited if anticlimactic decision, a divided panel of the U.S. Court of Appeals for the Third Circuit has again sided with CBS in its seven-years-and-counting fight with the Commission over the 2004 Super Bowl® half-time show. For those of you with short memories, that was the show that featured Janet Jackson, Justin Timberlake and (for a spectacularly noteworthy appearance lasting 9/16 of a second), Ms. Jackson’s right breast, seen from a considerable distance.

While this most recent decision in CBS’s favor may be cheered by many (if not most) broadcasters, it is limited in scope. As a result, the impending Supreme Court show-down in the Fox Television case – already briefed, with an argument likely to be scheduled for early 2012 – remains the primary focus of attention among First Amendment aficionados.

But even so, the Janet Jackson case cannot be ignored. This was, after all, the situation that re-kindled the FCC’s interest in strict regulation of “indecency” on the airwaves.

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TV Public Files Moving (Virtually) to the Portals?

Commission proposes to host all TV public files on its servers; Form 355 is now dead – but possibly not for long.

We have some good news and some bad news. 

First the good news: in an “Order on Reconsideration and Further Notice of Proposed Rulemaking” (FNPRM),  the Commission has abandoned the dreaded “enhanced disclosure” Form 355, its 2007 attempt to bulk up the quarterly issues and programs lists for TV licensees.

Now the bad news: the Commission is still looking to impose significantly increased program reporting obligations on the television broadcasting industry (and, possibly at some time down the line, on their radio sibs as well). And the number of items required to be routinely submitted to the Commission could be increased dramatically. Oh yeah, and the notion of an “enhanced disclosure” hasn’t been tossed entirely; it’s merely on the backburner, apparently awaiting a notice of inquiry that is expected to be circulated in the near future.

Of course, in its FNPRM the Commission does not characterize its proposal as increasing any burdens. Au contraire, its goal here is supposedly to “modernize the way television broadcasters inform the public about how they are serving their communities.” And how does it plan to do that? The FNPRM proposes that TV stations would no longer have to maintain all of the hard-copy local public inspection files that have been obligatory for decades.

 So no more public file? 

Not quite.

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"Bill Shock" Off the Docket

FCC proceeding placed on hold as wireless industry adopts voluntary measures to reduce bill shock

As we reported a little less than a year ago, the FCC released a Notice of Proposed Rulemaking proposing that wireless carriers be required to take steps to avoid “bill shock”.  Readers with good memories will recall that in the summer of 2010, Congress, the Administration and the FCC were highly exercised about the heartbreak of bill shock. Numerous complaints were rolling in from parents of teenagers and international travelers, among others, who were shocked to discover that they had somehow exceeded their plan limits or incurred international roaming charges which they had not expected. Horror stories of phone bills of $34,000 and $18,000 prompted our trusty regulators to leap into action with a plan to make carriers warn consumers of impending danger before it strikes.

That was then; this is now.

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Reefer Madness III: Feds Looking to Bust Broadcasters?

She may just be blowing smoke, but one G-woman in California is making threatening noises about dope advertising.

We reported a couple of days ago on increasingly aggressive prosecutorial efforts being launched by Department of Justice officials in California against medical marijuana dispensaries and their landlords. We suggested that it wasn’t much of a stretch to figure that the Feds might eventually also target broadcasters who carry ads for such dispensaries.

Looks like our speculation wasn’t too far off. 

According to a post on the Center for Investigative Reporting website, at least one U.S. Attorney on the Left Coast has concluded that broadcast ads for grass are verboten. The post quotes Laura Duffy, U.S. Attorney for the region including San Diego County, as saying that “[n]ot only is [marijuana advertising] not appropriate . . . it’s against the law.” Ms. Duffy is looking at possibly sending out formal notices to TV, radio and print outlets giving them the formal heads up that they’re violating the law. She was understandably vague about what might happen after that, but did mention criminal prosecution as one possibility. This may not be a direct threat that the Feds are coming, but it’s pretty darned close.

So we’re now looking at the impending collision of two considerable forces: from one direction, we have the Great State of California (and others), satisfied that medical marijuana is a valid, beneficial and humanitarian therapeutic resource; from the other direction, we have the Federal government, still convinced that marijuana is the killer weed in which lurks murder, insanity and death.

And located right at the collision point of these two forces will be broadcasters and their print confrères, clutching the First Amendment.

This is a story that will likely be developing big time in coming weeks. But for now, the restraint we recommended last time around is still the order of the day. Check back here for updates.

Reefer Madness II: Update on "Joint" Sales Advertising

Is the pipe dream of marijuana advertising going up in smoke?

What’s up with broadcast advertising of medical marijuana? 

It’s been two years since the Department of Justice hinted that maybe, just maybe, the federal government might go easy on fiendish pushers of the evil weed, er, we mean legitimate businesspersons seeking to provide dope to patients with legitimate prescriptions for the stuff. State laws permitting use of the drug for medical treatments opened the door to this particular area of commerce. But those state laws also created a conundrum, particularly for federally-licensed broadcasters: if marijuana trafficking is illegal under federal laws but legal under state laws, should a broadcaster accept advertising for grass?

We previously expressed caution on that front. Events this year indicate that any thoughts of a federal retreat in the War on Drugs were but a pipe dream.

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When the FCC Comes Calling . . .

Unless you’re looking for even more trouble than you’re probably already in, try to keep The Man happy.

Here’s a helpful tip: If an FCC inspector stops by your station, notices something amiss, and tells you to turn your station off, you’re probably better off following that particular instruction. About $7,000 better off, it looks like. Don’t take our word for it – just ask the licensee of a low power FM station in Dunnellon, Florida.

The lo-po’s problems started when the local FCC Field Office got a call from the local airport complaining about interference to an Air Traffic Control frequency. That kind of call generally gets the FCC’s attention pronto (and, speaking on behalf of the flying public, CommLawBlog supports that kind of attention). Using direction-finding gear, they tracked the offending signal to the LPFM station. The Feds showed up at the station’s doorstep, explained the situation to the only station staffer in sight, and asked him to turn the transmitter off. The guy refused. They got the station’s owner on the phone, and the inspectors asked him to tell his employee to turn the station off. The owner refused – unless the station’s engineer was present. The owner was finally convinced (after about half an hour) to get his sweet self down to the station, at which point he agreed to let the FCC folks inspect the operation. The inspectors found that the station was operating with a transmitter not certified by the Commission. The owner turned the transmitter off, and the interference to the airport ended.

The standard fine for operating with unauthorized equipment is $5K – and that’s exactly where the Enforcement Bureau’s Notice of Apparent Liability started. But the Bureau then tacked on an “upward adjustment” of $7,000 – a bump amounting to nearly 150% over the starting point – because the interference caused by the unlawful operation affected the safety of life and property and because the owner and his employee refused to comply with the inspectors’ request that the station be turned off immediately. Total fine: $12,000. Make you check payable to the FCC. Thanks for your business.

This isn’t brain surgery. Congress has given the FCC the authority to inspect broadcast stations (really – it’s in Section 303(n) of the Communications Act), and the FCC can exercise that authority. If FCC inspectors show up at your station, the best policy to follow 99.99% of the time is to invite them in, make them comfortable, and do what they tell you to do. As tempting as it might be to try to tell The Man where to get off, that’s bound to be a losing proposition no matter how you slice it.

Good News/Bad News for FM Translator Licensees

Audio Division signals expansion of “minor mod” possibilities, but only in some circumstances; “Serial modification applications” – or “hops” – now officially disfavored.

It’s been a tough year so far for FM translator licensees, who have seemed repeatedly to get stuck at the back of the line – behind, in particular, would-be LPFM applicants – as the quest for spectrum ratchets up. But a decision by the Audio Division appears to loosen at least one of the regulatory provisions that have limited the efforts of existing translator licensees to improve their facilities.

That’s the good news.

The bad news is that the Division has now also explicitly declared verboten a practice by some translator licensees that the Division has historically condoned (if only tacitly) and that the Division concedes has not been (and is not now) prohibited by any specific rule. The now-taboo practice involves the filing of serial applications – or “hopping” – in order to relocate a translator away from its original, usually less-than-desirable smaller community to a distant-but-bigger community.

Let’s start with the back story.

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The FCC Is Watching You . . . or At Least Your Website

Media Bureau staff continues to check station websites for compliance

A couple-three years ago, we warned readers that the staff of the FCC’s Media Bureau appeared to be browsing the websites of broadcast stations, checking for compliance with the EEO rules. Actually the FCC staffers were then apparently checking for compliance with an imaginary EEO requirement that didn’t – and still doesn’t – exist, but the important take-home message was the same regardless: FCC staffers were inspecting broadcasters’ websites.

It appears that that practice continues.

Recently, an FCC staff member emailed us, questioning whether one of our clients had posted its annual EEO report on its website. (As noted below, the rules do require such posting.) The staffer reported that she had been unable to find the report on the site. Happily, we were able to confirm (and demonstrate) that the report had in fact been posted – albeit not necessarily in the most obvious place on the station’s site – and the staffer apparently went away satisfied.

But that encounter prompts us to remind broadcasters that their websites are wide-open for inspection by anybody, including FCC staffers.  And nowadays those staffers are apparently motivated to engage in such inspection in connection with the license renewal process, which is swinging into high gear. (Two batches of renewals have been filed already, with more to come at two-month intervals for the next few years.)

The Commission’s rules currently specify only one type of “public file” document that must be included on a station’s website (assuming, of course, that the station has elected to have a website): the licensee’s most recent annual EEO report, the specs for which may be found in Section 73.2080(c)(6) of the rules. (Obscure regulatory factoid: The public file rule technically still requires that DTV transition education reports – Form 388 – be posted on websites. However, since the retention period for those reports is only one year, and since all but a dozen or so TV stations completed their move to digital more than a year ago and thus no longer have to file Form 388, the continuing impact of that particular requirement is minimal at this point.)

Of course, stations with fewer than five full-time employees are exempt from the annual EEO report requirement. But if you are not exempt, and if you do have a website, it would be a good idea to be sure that your most recent EEO report is posted there. While the rule does not specify how prominently the report is to be posted, it would probably be a good idea to make it pretty darned easy to get to the report from the station’s home page. That should assist FCC staffers in locating the report at your site – thus enabling them to move on to somebody else’s site that much quicker.

Our recent interaction with the staff did not indicate that the FCC is looking to dole out fines to stations that don’t happen to have posted their reports as required. But you never know.

Update: Public Inspection File Inquiry Arrives at OMB

The FCC digs its regulatory heels in.

We have movement on the local public inspection file front!

The proceeding the FCC kicked off last April – inquiring into (among other things) whether there really is any need for the public inspection file requirements of Sections 73.3526 and 73.3527 – has now been bucked over to the Office of Management and Budget. This opens up one final 30-day period during which comments on the requirements may be submitted (to OMB). The deadline for comments is September 15, 2011.

Why another round of comments? It’s all part of the Paperwork Reduction Act (PRA) process. In PRA parlance, the public file requirements constitute “information collections”. Because of that, the FCC can’t impose those rules without approval from OMB, which approval can extend for no more than three years. Once the three-year clock tolls, the FCC’s got to go back to OMB and request an extension of the previously-issued approval if the FCC wants to keep the requirements in place. As part of that extension process, the FCC must: (a) give everybody a 60-day opportunity to submit comments to the Commission; (b) review those comments and prepare a “supporting statement” addressing the comments; and (c) ship the comments and its supporting statement to OMB. Then OMB must provide a 30-day comment opportunity of its own. That’s where we are right now.

If you want to read the FCC’s supporting statement, you can find it at the OMB’s website, or you can click here. We’ll address some of its highlights below. In addition to the supporting statement, the Commission has posted a downloadable Zip file containing approximately 516 comments that were filed.  (To get to that file, click on the link in the previous sentence and scroll down to the "Public Inspection File Comments" link.)  Don’t be daunted by that number – more than 90% consist of the same 191-word four-paragraph letter urging the FCC to retain the public file requirements. (While we suppose that it’s theoretically possible that 470+ individuals may have independently come up with precisely the same combination of 191 words in precisely the same order, we suspect it more likely that some form of AstroTurf® operation may have been at work here. Not that there’s anything wrong with that . . .) We’ll get to those letters, too.

Mixed in with the robo-comments are 30+ comments mainly from broadcasters and state broadcast associations. They generally oppose the continued imposition of all or most of the public file requirements.

Let’s take a look at the FCC’s supporting statement first.

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Reconsideration Request Draws Eleventh Rejection from FCC

Applicant is barred from making further filings on same matter without FCC staff permission; Quoth the FCC, “Nevermore . . . and we mean it”

We reported last year on a wireless provider whose applications for a certain service were dismissed by the FCC. The applicant sought reconsideration and review of that decision – not once or twice, but (up to that point) ten separate times. The FCC consistently turned him down.  In refusal number nine, it added, “We plan to give no further consideration to this matter, and the staff is hereby directed to dismiss summarily any subsequent pleadings . . . .”

We reported how the applicant sought reconsideration yet again. A Deputy Bureau Chief, in two brief paragraphs that cited the “no further consideration” order, dismissed the applicant once more.  While we promised then to provide updates, we thought, frankly, that would be the end of it. 

We were wrong.

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AstroTurf ® Filings Condemn AstroTurf ® Filings

Group that decries hidden interests keeps its true interests well hidden.

Here in Washington, we’re used to a certain amount of hypocrisy. It’s part of the atmosphere, like exhaust fumes from the high school tour buses.

But once in a while even we get taken aback. No, not about the debt-limit debate, although that also strains our tolerance. We are referring to an unusual spate of filings in one of the FCC’s rulemaking dockets.

The rulemaking itself is an inside-the-Beltway matter. The FCC allows interested parties to file views on its proceedings even after the published comment schedule has expired. These late submissions are called “ex parte” filings, from the Latin for “one-sided,” which they generally are. In the past, they offered a way to put useful technical and policy information before the FCC staff. With the advent of electronic filing, the ex parte process has also become a way for special interest groups speaking through complaisant individuals to flood the FCC with dozens, sometimes hundreds, of nearly identical statements.

The rulemaking in question asks for comment on whether groups filing ex parte statements should have to identify who they really are. After all, an organization called “Citizens for Better Phone Service” may in fact be a telephone company seeking relief from regulation. “Coalition for a Free Internet” may be a front for a cable company opposed to network neutrality rules. And so on. Such groups are often called “AstroTurf®” entities: an artificial construct masquerading as a grass-roots organization. (AstroTurf ® is a registered trademark, even if the registration doesn't cover this particular use of the term.)

In addition to the usual suspects – lobbying groups that make frequent ex parte filings with the FCC – this rulemaking has attracted well over 200 identical submissions signed by individuals. They all read as follows:

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Update: Effective Date of Anti-Spoofing Rules Set

Earlier this month we reported on the adoption of the FCC’s new “anti-spoofing” rules. Those rules, mandated by Congress in the Truth in Caller ID Act, make it unlawful to transmit misleading or inaccurate caller ID information – that is, to “spoof” – if the goal is “to defraud, cause harm, or wrongfully obtain anything of value”.

The Commission’s Report and Order has now been published in the Federal Register. As a result, we can report that the new rules will take effect on August 19, 2011.

While the new rules may have been initially conceived as a protection primarily for consumers, the Commission has expressly acknowledged that spoofing committed to “wrongfully avoid payment of intercarrier compensation charges would be a violation” of the rules. That would include spoofing by the originating provider or an intermediate carrier, among others. Thus, when the new rules become effective, they should provide a weapon through which carriers can seek to discourage other carriers from attempting to use spoofing to duck their intercarrier obligations.

FCC Targets Spoofing

It’s not nice to try to fool caller ID services – in fact, it’s now illegal, with violators looking at possible $10K penalties.

“Spoofing” a phone call – that is, hiding your true identity from caller ID services – may sound like a harmless prank, but it’s a serious enough problem to have attracted the attention of Congress. Last year Congress passed (and, in December, President Obama signed) the “Truth in Caller ID Act”, making it unlawful to transmit misleading or inaccurate caller ID information “with the intent to defraud, cause harm, or wrongfully obtain anything of value.” The law charged the FCC with responsibility for enforcing the new prohibition. In late June, the Commission dutifully revised its own rules to reflect the new law;  it also issued a report (ordered up by Congress) on caller ID in new telephone technologies.

The upshot of all this: a new anti-spoofing regulation with a potentially stiff penalty (max $10K for each violation) and a request that Congress broaden the FCC’s authority to reach more spoofers.

Spoofing provides many opportunities well beyond the merely mirthful; in fact, it affords the motivated criminal plenty of ways to wreak serious damage. A malicious caller might, for example, elicit a social security number from an individual by appearing to be from a bank or government office. Or circumvent a bank’s security screening by appearing to be the account holder, calling from the number of record. Or, in a really creepy use, make threatening calls from the recipient’s own number, thus appearing to be actually in the house. Nothing mirthful there.

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The Swami: Looking At Violent Video Games Now, Seeing Indecency In The Future

Do the Supreme Court opinions in Brown v. Entertainment Merchants Association shed light on likely outcome of FCC v. Fox Television Stations indecency case next term? The Swami thinks so. 

When the Supreme Court agreed to hear a challenge to a California law regulating the sale or rental of violent video games to minors, many First Amendment types like myself asked why. A key issue was whether the Court would carve out a new exception to the First Amendment. And the Court accepted the case just one week after it decided United States v. Stevens, in which it emphatically declined to create such a new exception for videos that show cruelty to animals.   Why take another First Amendment case so soon? Perhaps the Court was signaling an intent to limit the Stevens decision to its particular facts (i.e., animal cruelty videos) by opening the door to regulation of violent video games marketed to human children. And if so, might the Court be opening the door to FCC regulation of violent programming?

After the decision in Brown v. Entertainment Merchants Association, it appears the Court knew exactly what it was doing. Brown struck down the video game law, relying on Stevens in refusing to create another new kind of unprotected speech, even as to minors. Broadcasters should be happy. The decision clearly implies that the FCC does NOT have the authority to regulate violent programming. The decision also leads me to conclude that, perhaps more importantly, the Court will side against the FCC in FCC v. Fox Television Stations,the indecency case it accepted on the same day Brown was decided.

The timing may be a coincidence; it was, after all, the last day of the Court’s term.   But I prefer to see an interconnected series of events that takes us from Stevens to Fox in just two moves, with Brown linking them together. Six Degrees of First Amendment law.

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IXC v. CLEC: Tariff Tossed Due To "End User" Definition

Q: When is a carrier’s local subscriber not an “end user”? A: When the subscriber doesn’t have to pay.

In a recent decision in the ongoing saga of who should pay the cost of “free” conference calling services, the full Commission – not just a subordinate Bureau – declared unlawful the interexchange switched access charge tariff of a competitive local exchange carrier (CLEC) because some of the CLEC’s end user customers do not pay for their local exchange service.

The FCC normally cuts CLECs a lot of slack in setting rates. That’s because if a CLEC charges too much, it won’t be able to woo customers away from the local incumbent local exchange carrier (ILEC) with which it must compete. But there is one area that is not so competitive – access charges imposed on interexchange carriers (IXCs) for incoming calls. An IXC must deliver each call to whichever LEC serves the destination subscriber, and the IXC has no influence over which local carrier the destination subscriber uses. So if a call is destined for a CLEC customer, the IXC has to pay that CLEC’s rates, or else the call won’t go through.

The opportunity to set incoming access charges with relative impunity has led to arrangements where the principal business of a CLEC may be providing local service to services that generate large volumes of incoming traffic and nearly no outgoing traffic – for example, conference call and chat line services. The CLEC files a tariff with terminating charges that are high enough to cover all of its costs and then some. To attract high volume customers, the CLEC provides local service for free and may even pay the customer a share of its access charge revenues. Needless to say, these arrangements are highly attractive to conference calling and chat line providers. They’re also appealing to the general public, which may enjoy the services for no more than the normal cost of a long distance call – and that cost may be essentially zero if they use one of the newly popular bundles with flat rate unlimited long distance. 

The attitude of IXCs toward such arrangements is substantially more negative, to say the least, because the access charges they pay sometimes exceed the toll rates they charge their customers.

Qwest Communications Company decided to blow the whistle on Northern Valley Communications, which operates in South Dakota, by filing a formal complaint under Section 208 of the Communications Act.

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First Amendment Face-off: Supremes To Consider Constitutionality of FCC Indecency Regime

Fox and NYPD Blue cases could provide last word in long-running debate

The Supreme Court has agreed to review the decisions of the U.S. Court of Appeals for the Second Circuit in the Fox Television and NYPD Blue cases. In a terse order issued the last day of the Court’s term, the Supremes said that it would consider only the following question:

Whether the Federal Communications Commission’s current indecency-enforcement regime violates the First or Fifth Amendment to the United States Constitution.

And with that the stage has been set for what could be the final battle in the decades-long struggle relative to the regulation of so-called “indecency” on broadcast stations.

The FCC rulings that will provide the focal point of the case involve two awards shows (in which first Cher, and then Nicole Richie, let loose with some supposedly unscripted expletives on live TV) and an episode of NYPD Blue which featured a brief – less than seven seconds, by our count – view of Charlotte Ross’s naked rear end (prompting the FCC to declare buttocks to be a sexual organ).

We have blogged repeatedly about the long-running indecency saga – click here and scroll down for a sampler – and the Supreme Court’s order provides little additional insight into what might be in store. (Interestingly, Justice Sotomayor did not participate in the decision to review the case; it’s not clear whether that means that she might recuse herself entirely from the case.) However, the Court’s express limitation of the case to the constitutionality of the FCC’s indecency policy does indicate that, unlike the last time this case was before the Court, we are in fact likely to get a determination of the constitutionality of that policy. And let’s not forget Justice Thomas’s separate opinion the last time Fox was before the Court – an opinion in which he suggested that, if the case came back, he might be inclined to look into the continuing validity of the Red Lion doctrine. (Red Lion is the 1969 Supreme Court decision in which the scarcity rationale was embraced by the Court as a justification for according broadcasters less than full First Amendment rights.)

The Court will now set up a briefing and argument schedule. Look for briefs to be submitted by the end of the summer or early fall, with an argument date following several weeks later. It’s reasonably likely that the argument will be held before the end of the year, although the Court might not issue its ruling until June, 2012. Check back here for updates.

[Blogmeister’s Note: Let’s not forget that, almost a year ago, our resident Swami Kevin Goldberg predicted that, if the Fox case were to go back up to the Supremes, Fox would win, by 6-3, or maybe 7-2, margin. We’ll be checking back with the Swami after the argument next fall to see if he’s sticking with that.]

FCC Hammers Crammers

Companies billing for unauthorized services are fined $11.7 million.

The FCC has proposed multi-million dollar fines against four companies for allegedly “cramming”: billing telephone customers for services they did not ask for. At the same time, the FCC issued guidelines to both telephone companies and the public about how to detect and prevent cramming, and plans to offer new rules against the practice.

Cramming problems usually relate to charges by third-party companies for services supposedly ordered by the phone company’s customers, and included on the phone bill. The FCC’s “Truth-in-Billing” rules require phone bills to include clear descriptions in plain language for each service, with a toll-free number for customers to question or dispute the charges.  Until a customer complains, though, the phone company has no way of knowing whether the charges are legitimate. This leaves it up to customers to review their bills for suspect charges. Knowing this, crammers sometimes try charging just two or three dollars a month, hoping that busy consumers won’t notice. The FCC’s Enforcement Bureau says thousands of people have fallen victim. 

The FCC and the Federal Trade Commission (FTC) share responsibility for protecting consumers from cramming. The FCC has jurisdiction over the telephone carriers and other communications service providers. The FTC has jurisdiction over the third-party service providers whose charges (for things like chat lines, diet plans, etc.) are wrongly added to a telephone customer’s bill. The two agencies coordinate their enforcement activities to protect the public.

In the most recent cases, the FCC proposed fines ranging from $1.5 million to $4.2 million against four companies. (The individual “Notices of Apparent Liability” are here, here, here and here.)

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FCC Fines Man for Not Having an Unobtainable License

The FCC stopped sending out CB licenses decades ago – yet the lack of one triggered a $15K penalty.

The FCC fined a man named John Hays $15,000 for operating a Citizens Band radio without a license.

Wait a minute. You don't need a license for a CB radio. Well, okay, technically you do, but it’s not something you have to apply for. Everybody with a CB radio is automatically deemed to have one. The FCC calls this “license by rule,” a legal fiction that simplifies life for everybody. Including the FCC, which long ago got tired of licking stamps to send out actual licenses.

But if CB licenses are automatically granted to all CBers, how could Mr. Hays get in trouble for not having one?

The power limit for CB radios is four watts. Mr. Hays had used an illegal device, called a linear amplifier, that stepped up his transmitter power to 750 watts. When the FCC showed up at his door and explained the rules, Mr. Hays voluntarily disconnected and destroyed the device. But a few months later he was using another one, down to 75 watts, but still well above the legal limit.

The FCC charged Mr. Hays with operating without a license.

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Field Office: Public File Faux Pas Not Fixed? Forfeiture Figures To Be Higher!

Failure to correct omission of issues/programs lists triggers $4K uptick in fine

The market for a reasonably-priced time machine has probably expanded a bunch with the issuance of a Notice of Apparent Liability for Forfeiture and Order (NAL) which might indicate that a Class A TV licensee is expected to reconstruct eight and a half years’ worth of issues/programs lists . . . within 30 days.

At first blush the NAL looks routine.  Inspectors from the FCC’s San Diego Field Office visited the Class A’s studio in June, 2010, and asked to see its public file.  Nothing unusual there.  The file was lacking 34 issues/programs lists.  Since the station had not received Class A status until August, 2001, that means that the licensee had none of the lists that would have been required.  While perhaps on the high side in terms of the raw number of missing lists, the fact that the inspectors found lists to be missing is also not unusual.

In March, 2011, the Field Office sent the licensee a follow-up letter of inquiry asking about the status of the station’s public file.  The letter specifically requested a list of the contents of the file.  The document list which the licensee sent in response included no issues/programs lists.

Next thing you know, out comes the NAL, which (a) assessed the licensee a $14,000 fine for failure to comply with the public file rule, and (b) ordered it to file a statement under penalty of perjury within 30 days stating that the station is in compliance with that rule.  The NAL explicitly states that, while the standard fine for a public file violation is $10,000, an extra $4,000 was tacked on because the licensee “failed to correct the violation subsequent to the inspection”.

Let’s think about that for a minute.

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Consent Decree Is Beginning, Not End, Of Licensee's Troubles

When you agree to pay a fine, the FCC really does expect you to pay the fine.

It turns out that, sometimes, the job’s not over even after the paperwork is done. An AM licensee found that out the hard way when it got slapped with a $25,000 notice of apparent liability for failing to take care of a couple of items on a to-do list that it had promised the Enforcement Bureau it would take care of.

The story starts back in 2005, when the licensee (real name: “A Radio Company, Inc.”) received a notice of apparent liability for a short laundry list of problems, including incomplete public file, inadequate tower fencing, and operating with unauthorized facilities (seems the directional AM was using its daytime directional pattern at night). Total damage: $15,000.

The licensee dickered over the details and managed to get the fine backed down a grand (in 2007), but it kept the ball in play by appealing parts of the remaining $14K fine. In 2008, the licensee entered into a Consent Decree with the Enforcement Bureau that shaved another $6,000 off the bottom line. So at that point the licensee was looking at an $8,000 fine, a bit more than half the original amount. According to the Consent Decree, all the licensee had to do was pay the fine, set up a “Compliance Plan” designed to prevent future violations, and file three (count ’em, three) “compliance reports” with the Commission – one 90 days after the Consent Decree, the second a year after, the third two years after – confirming that the Compliance Plan was up and running. Good deal, right?

Apparently not good enough.

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Update: FCC Process Reform Hearing Date Set

And so it begins . . . on Friday the 13th.

A couple of weeks ago we reported about Congressional interest in FCC process reform, and the likelihood that hearings on that subject might be just around the corner. And sure enough – the Communications Subcommittee of the House Energy and Commerce Committee has announced that it will hold a hearing on FCC Process Reform, May 13 at 9:30 a.m. (if you’re in town and want to pop in for a look-see, stop on by Room 2123 in Rayburn Building).  Note that this is a rescheduling – the hearing was originally set for May 3.  The listed witnesses are Chairman Genachowski and the four commissioners. 

As noted in our earlier report, Subcommittee Chairman Greg Walden (R-OR) believes basic reforms can be addressed in a “positive and constructive way.”  With issues such as net neutrality, merger review (AT&T/T-Mobile anyone?) and agency sunshine rules in play, the upcoming hearing will provide an early public test of that theory.

FCC Settles for Big Bucks over Audio Gear . . . Wait - Audio??

Large “voluntary contribution” stems from rules on unintentional radio-frequency emissions.

The FCC regulates the use of radio waves. So why did PreSonus, a company that distributes professional audio equipment (for recording and live performances), agree to pay $125,000 to settle claims it had violated FCC rules? The company also consented to a detailed compliance plan intended to prevent future violations. Yet no one thinks the FCC has jurisdiction over sound waves.

The FCC got involved because PreSonus’s products, like many others nowadays, incorporate digital circuits. Like all such circuits, these generate and use radio-frequency signals inside the device. The computer or phone on which you are reading this post works the same way, by shunting electrical activity around its chips and boards at hundreds of millions of pulses per second. Although needed only for internal use, some of that radio-frequency energy inevitably leaks out of the device, where it can pose a threat to radio communications. Ever since 1979, when early desktop computers caused severe interference to home TV reception, the FCC has regulated what it calls the “unintentional emissions” from digital devices.

The FCC has not disclosed the exact charges against PreSonus, but the information it did release suggests the company had not followed the required procedures to demonstrate compliance with the rules limiting unintentional emissions. It also appears that the company’s products did not display certain labels required by the FCC, did not provide required text in the instruction manuals, and did not follow certain importation procedures. The size of the “voluntary contribution” PreSonus must pay under the settlement – about 10-15 times higher than usual for this kind of offense – would be appropriate if many different product models were involved. An earlier digital audio case went even higher, to $1 million, again in part because the alleged violations applied to multiple models.

Manufacturers, are you paying attention? The FCC really does enforce compliance with unintentional emissions limits, along with the associated labeling and paperwork. There are exemptions in the rules for certain categories of digital circuits; but the FCC interprets these narrowly. The vast majority of devices containing digital circuits are subject to the rules. Fortunately, compliance is rarely difficult. As to companies that fail to make the effort, an FCC official once said, “we’ll keep jacking up the fine till we get their attention.” After the PreSonus  case, we think they mean it.

Ex Parte Follow-Up Paperwork Requirements Expanded

Additional proposals for increased reporting after ex parte meetings out for comment

Folks trying to get their way at the Commission routinely engage in what we professionals refer to as “ex parte” contacts – which usually consist of face-to-face, one-on-one meetings with Commissioners or Commission staff. Such meetings theoretically provide an up close and personal opportunity for the outside party to pitch its side of some issue to the regulators.

Ex parte meetings can be useful, but they also can be problematic from the perspective of due process and fairness. The term “ex parte”, after all, derives from the Latin for “one-sided”. If the issue which the private party is pitching in the meetings is contested, what are the chances that the other side of that issue will be fairly and accurately presented? (Non-FCC illustration: how would you feel if you found out that your soon-to-be-ex-spouse had had a private tête-à-tête with the judge presiding over your hotly-contested divorce case?)

In order to assure itself maximum access to potentially useful information (through, e.g., ex parte contacts) while still preserving at least the illusion of fairness and openness in the decision-making, the Commission has crafted a number of rules to govern the ex parte process. Those rules prohibit ex parte contacts in certain types of proceedings; in other types, such contacts are permitted as long as the private party follows up the meeting by submitting a notice summarizing the gist of the meeting (including any written materials that might have been handed out during the meeting). That notice is then placed in the FCC’s public files so that, theoretically, anyone with an interest in the proceeding at issue will be alerted to the meeting.

As happens periodically, the Commission has now adopted new rules clarifying, and expanding, the post-ex parte disclosure requirements.  Although the Commission announced the new rules back in February, they aren’t scheduled to take effect until June 1. (A couple of the changes involve “information collections” and, as a result, won’t be effective until approved by the Office of Management and Budget.) Additionally, the Commission has proposed further changes to those requirements.

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FCC Process Reform: Change In The Air?

Key Congressional figures signal interest in examining the way the FCC does business

Have any thoughts on how the FCC could operate better? Increasingly, a number of influential members of Congress seem to believe they do. Momentum continues to build on Capitol Hill for reform of the Federal Communications Commission with recent statements – and hints of action – from key members of the House Energy and Commerce Committee.

Speaking at the American Cable Association’s annual summit on April 13, House Communications Subcommittee Chairman Greg Walden suggested there would be a hearing and movement on legislation on FCC reform in the near future. Expectations are that the five FCC commissioners will be called to testify before the subcommittee within a few weeks of Congress’ return from recess.

Walden made a strong pitch for Congress to actively oversee the agency, stating: “Failure to do that only gives them license to do other things they don't have the authority to do.” Walden, of course, introduced a House-passed resolution to invalidate, as an overreach of FCC authority, the Commission’s recent net neutrality rules.

Walden expressed his belief that both the Democrat and Republican FCC commissioners agree on the basic need to improve how the agency functions (see, e.g., “Copps, Commissioner, sunshine rules” and “Baker, Commissioner, merger review”) and that such reform can be done in a “positive and constructive way”.

And Walden is not alone in his interest in Commission process reform.

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Shut Up And Deal

FCC asks Supreme Court to review Second Circuit indecency decisions in Fox and NYPD Blue.

Like a hard-core poker player on a losing streak, the Commission isn’t going to let a recent string of defeats on the indecency front discourage it. Au contraire, the FCC’s going double-or-nothing, putting all its chips in and looking to Lady Luck for a change in fortune: it has asked the Supreme Court to review both of the Second Circuit’s 2010-2011 indecency decisions. But there’s no guarantee that the Commission will even be dealt a hand in the next round . . . and if it does get dealt in, the odds may be against the FCC in what could turn out to be a very high stakes game.

The two cases involve (1) Fox’s broadcasts of the 2002 and 2003 Billboard Music Awards and (2) an episode of ABC’s NYPD Blue. We’ll spare you the historical details here – you can read about them in our previous posts (like here and here). The U.S. Court of Appeals concluded in the Fox case that the FCC’s indecency policy, as it has evolved in recent years, is unconstitutionally vague and fails to give broadcasters a clear enough idea of precisely what types of material may or may not be deemed “indecent”. In the NYPD Blue case the same court held that its Fox ruling applied equally not only to language (which had been at issue in Fox) but also to visual images.

The one-two punch delivered by the Second Circuit effectively scuttled the FCC’s efforts to enforce its quasi-ban on indecency.

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Public Inspection File Rule: FCC Asks If It's Really Necessary

Thanks to Paperwork Reduction Act, public file rule now out for comment

Here’s a surprise! The FCC has invited comments on whether or not the local public inspection file requirement is really necessary. Since the Commission has assiduously ignored – for more than five years – a petition for rulemaking seeking the abolition of those requirements, this invitation should puzzle some and thrill others.

As it turns out, the obligations imposed by the public file rules constitute “information collections” (in the parlance of our old friend, the Paperwork Reduction Act), and we all know what that means: periodically (like every three years) the FCC must justify such requirements to the Office of Management and Budget. The current OMB approval is set to expire on September 30, 2011, which means that, if the Commission plans to keep those rules on the books, it’s got to re-justify the rules to OMB’s satisfaction. That process entails two opportunities for public comment stretching over at least 90 days. With less than 180 days to go before expiration, the FCC has now started that process.

Unlike other Commission proceedings that get kicked off with much fanfare – public notices, Commissioners hailing “vibrancy”, “robustness”, “transparency” and the like, maybe even a webcast or blog – this one is more like a stealth item wrapped in an invisibility cloak flying under the radar. So far all we’ve seen is a blander-than-bland Federal Register announcement

But that doesn’t mean that the party hasn’t started, so come on down.

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Saber-Rattling On The Nondiscrimination-In-Advertising Front

“Enforcement Advisory” wags threatening finger at broadcasters, but still leaves questions unanswered. After three years, that’s par for the course.

The FCC has unleashed a new “Enforcement Advisory” announcing its intention (in the Chairman’s words) to “vigorously enforce its rules against discrimination in advertising sales contracts”. The Advisory also “alerts” broadcasters about their “new” obligations concerning nondiscriminatory advertising contracts. Unfortunately, the Advisory (and its accompanying news release) leave something to be desired.

Which is par for the course with respect to the nondiscrimination-in-advertising policy (NIAP).

Three years ago, the FCC released what has come to be known as the Diversity Order, a sprawling piece of work by which the Commission sought to increase, um, “diversity” in the broadcast industry. The order included new and amended rules, a sprinkling of new and revised policies, some expressions of good intentions, and a bunch of proposals.

In two paragraphs buried in the middle of the Diversity Order (those would be Paragraphs 49 and 50, if you’re looking), the Commission announced that it would henceforth “require broadcasters renewing their licenses to certify that their advertising sales contracts contain nondiscrimination clauses that prohibit all forms of discrimination, as outlined below.” The phrase “as outlined below” suggested that further details about what this meant for affected broadcasters might be found elsewhere in the Diversity Order. 

But no such details were to be found.

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NCE On-Air Fund-Raising For Japan Relief Efforts

FCC announces procedures for waiver requests by noncommercial broadcasters

In our experience, broadcasters respond to catastrophes with incredible humanity, offering help wherever and whenever possible. As the horrific stories and images from earthquake- and tsunami-devastated Japan continue seemingly unabated, broadcast stations may want to undertake fund-raising efforts to support relief efforts. The FCC clearly does not want to do anything to discourage such laudable humanitarian impulses. However, rules are rules – and the Commission’s rules (Sections 73.503(d) for radio and 73.621(e) for TV) generally prohibit noncommercial educational (NCE) broadcasters from engaging in on-air fund-raising activities on behalf of anybody but the station itself.

Not to worry. The Commission has historically waived that prohibition following “disasters of particular uniqueness or magnitude” – Hurricane Katrina, the 2004 Southeast Asia earthquake/tsunami and the 2010 Haiti earthquake come to mind as ready examples. And just to be sure that we all know that the FCC views the Japan earthquake/tsunami to be in the same league, the Commission has issued a public notice laying out the procedures by which NCE licensees may request waivers so that they can engage in fund-raising for relief efforts.

Stations seeking such waivers should prepare an informal request providing the following basic details of their fund-raising activity:

  • the nature of the fund-raising activity;
  • the proposed duration of the activity;
  • the organization(s) to which fund will be donated; and
  • whether the fund-raising activity will be part of the station’s regularly-scheduled pledge drive or fund-raising efforts

The informal request should then be emailed to the FCC.  NCE television licensees should address their requests to Barbara Kreisman (barbara.kreisman@fcc.gov). NCE radio licensees should address their requests to Peter Doyle (peter.doyle@fcc.gov) and Michael Wagner (michael.wagner@fcc.gov). Those points of contact are also available for any particular questions you might have about such things.

Caveat Carriers: Telecom Report Form 499-A Is Due April 1

FCC pillories telecom provider with $600K+ fine as the Form 499-A deadline draws near. Coincidence? We suspect not. 

With less-than-subtle timing, the FCC has fined ADMA Telecom, Inc., a Florida telecommunications company, more than HALF A MILLION DOLLARS for Universal Service Fund (USF)-related violations.  The message is clear: telecom companies that ignore the FCC’s paperwork requirements run the risk of hefty financial penalties. So get out your calculator, look through your books,  and get those 499-A’s on file by April 1, 2011.

As we all know, Congress has long required the FCC to establish and oversee a number of programs aimed at assuring the provision of telecommunication services to all Americans. Those programs are for the most part funded by consumers, through telecom providers. The FCC has developed an extensive set of reporting requirements so that it can keep track of all providers and determine how much each of them owes to the various programs. (Those programs include the USF, the Telecommunications Relay Service (TRS), and the North American Numbering Plan (NANP).)

The reporting requirements include an initial registration (to let the FCC know that the telecom provider has started providing telecom services) and then annual (and, in most cases, quarterly) worksheets – either Form 499-A or 499-Q – from which USF contributions are calculated. These filing chores apply to most telecommunications carriers, including resellers and interconnected VoIP providers.  Limited exceptions include government-only providers, broadcasters, certain non-profits, and systems integrators that derive less that 5% revenue from telecoms resale. Carriers owing less than $10,000 are considered de minimis and do not have to contribute, but still must file the form and pay any TRS and NANP contributions.

Since these programs involve billions of dollars, the Commission has an obvious incentive in riding close herd on the players, to make sure that everybody pays what they owe. And it has an equally obvious incentive to make examples of those who come up short. 

ADMA, for example.

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Indecency Complaint, With A Spanish Accent

Además el cambio ca, además de que es lo mismo.

Five years ago I was quoted in an article in Billboard about whether Spanish-language broadcasters get a pass when it comes to enforcement of the FCC’s indecency rules. Several English-language broadcasters – including Howard Stern (who quoted me on the air) – have frequently complained that the FCC does not enforce the rules equally.  Suspected reasons for the disparity: fewer complaints get filed against Spanish language programs, and the Spanish-speaking staff at the FCC has traditionally been undermanned. 

Now a couple of groups are looking to change the first of those possible reasons.

The National Hispanic Media Coalition (NHMC) and the Gay & Lesbian Alliance Against Defamation (GLAAD) have filed a complaint (173 pages in all, including extensive attachments) with the FCC against a TV station in the Los Angeles area. The focus of their complaint: the Spanish-language television talk show “José Luis Sin Censura” (translation: “José Luis Uncensored”).

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FCC Declines To Clarify Enigmatic Interference Rules

Unilateral and unsuccessful measures held to satisfy requirement for “cooperation” in 3650-3700 MHz band.

The FCC has reviewed its interpretation of a rule that some parties found to be unhelpfully vague. In refusing to make changes, the FCC has left those affected uncertain of their obligations.

As is generally expected of rules, most at the FCC take the form of “Thou shalt” or “Thou shalt not.” Sometimes there is room for dispute on how a rule applies to a novel situation. But in ordinary cases, the requirements are usually pretty clear.

These principles fail to hold, some think, in the policies governing the 3650-3700 MHz band. The procedures are unique in the FCC rulebook. There is no formal frequency coordination, as in most licensed bands, to protect first-in users against interference from later arrivals. But neither is there an everybody-into-the-pool approach like that governing Wi-Fi. The FCC does keep a database of users, much like the ones frequency coordinators rely on, but its implementation is strictly on a do-it-yourself basis, and arguably optional.

Back in December 2009, we reported on a decision by the FCC’s Wireless Telecommunications Bureau concerning this band.

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FCC Calculates Major Fine For Minor Error

Use of unlicensed transmitter on non-certified frequency brings fine for operation without a license

The FCC has proposed a $25,000 fine against AT&T for the offense of . . . well, let’s talk about that.  In its zeal to protect the spectrum, the FCC may have charged AT&T with the wrong offense.

A little background may help.

The FCC allows unlicensed operation in a band up above 5 GHz. The applications tend to be a lot like Wi-Fi, but under a different set of rules, called U-NII, for “unlicensed national information infrastructure.” (No, that won’t be on the exam.)

A few years ago the FCC expanded the U-NII band into a region of the spectrum also used by airport weather radars. The radars are used to detect wind shear in the vicinity, important to flight safety. In careful collaboration with the FAA, the FCC added rules that require U-NII devices to listen for the radars and avoid their frequencies – a capability called dynamic frequency selection, or DFS. The band is now popular for wireless Internet access service, among other applications.

But the technical rules did not work as planned.

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Old Complaints Never Die . . . And They Apparently Don't Fade Away, Either

Four-and-a-half-year-old allegation of telephone rule violation leads to $25K fine

The FCC’s rule on the broadcast of telephone conversations is straightforward and, when you get right down to it, pretty simple. But a recent fine for a violation adds a new and troubling dimension to the enforcement of that or any other rule, a dimension that broadcasters should be aware of.

First things first. The telephone rule (Section 73.1206, if you want to get technical) comes into play when a broadcaster wants to air a telephone conversation, live or recorded. When that happens, the licensee is required, BEFORE the call is EITHER broadcast OR recorded, to inform the person on the other end of the call of the licensee’s intention to broadcast the conversation. The mike can’t be opened and the recorder can’t be started unless and until that notice has been given – and if, upon receiving the notice, the caller chooses not to participate further, that’s that. (There are some narrow exceptions, but they’re not relevant here.)

The practical, and wholly intended, upshot of the rule is that it discourages – actually, it flat-out illegalizes – a wide range of classic radio bits that many find amusing. Fake phone calls – designed to elicit shocked or befuddled reactions which in turn generate laughter from all but the unfortunately shocked/befuddled soul on the call – are taboo. So, for example, if an announcer were to call someone and claim to be an intruder hiding under the call-ee’s bed (without, of course, letting on that the whole thing was a joke), and if that call were to be broadcast live as it was happening, that would be a violation of the rule. Ditto if the announcer identified himself as a loan shark looking to collect on a debt.

The standard penalty for violation of Section 73.1206 is $4,000. 

Now, about that recent fine.

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Scamming Jammer Slammed

FCC moves to revoke certification for illegal cell phone jammer; evidence shows company tested a different product to qualify for certification.

Cell phone jammers are illegal in the United States. Everybody knows that.

Yet a cell phone jammer has appeared for sale on the Internet carrying an FCC ID number. That is presumptive evidence the device is approved for sale. Of course, anybody can put a made-up number on a device label. This number, though, when checked in the FCC’s database, returns an apparently valid FCC certification. Lest there be any doubt, the certification document used to carry the note “RF Jammer.”

How could this happen? Why would the FCC and its Telecommunications Certification Body (TCB) – a company authorized to issue certifications on behalf of the FCC – ever okay a product the FCC has repeatedly declared to be unlawful?

Simple. The manufacturer lied.. . . or so it appears.

According to all the evidence, the device submitted for compliance testing and certification was not the cell phone jammer that subsequently appeared on the market, but an altogether different species of animal: a PC peripheral. (A peripheral either sits outside a PC and connects to the inside, like a printer, or sits inside the PC and connects to the outside, like a network card.) The test data that led to certification are not those of a cell phone jammer – there is not enough signal on cell phone frequencies – but rather show the profile expected from a digital device, like a peripheral.

There were other hints, though, that the application might something other than it seemed.

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Misrepresentation Lite: Five-Figure Fine For Deceit-Free Fallibility

Inadvertent errors in applications draw $20K fine for Cricket

FCC enforcement procedures continue to baffle us.

Take the case of Cricket Communications. They are a cell phone company, as you probably know – their ads are hard to miss. To move their phone traffic from place to place, they operate dozens of microwave stations. The FCC rules require licenses for these. If you want one, you have to apply for it, but you need not wait for the license to be granted. Rather, you can begin operating as soon as the application is filed, assuming certain conditions are met. Once the FCC does grant the license, the licensee has 18 months to get its station built and on the air (if it isn’t already), and has 15 days beyond that to certify to the FCC that it has done so. Without that certification, the license cancels automatically.

Cricket had trouble with two of its microwave licenses.

As to one, it filed the construction certification on time, stating it had built the station within the 18 months allowed. But it later found the certification was in error, and had to amend. The new certification showed it had built and begun using the station much earlier, before it had even filed the license application. That amounts to unauthorized operation, which is a violation of FCC rules.

As to the other license, Cricket got the contents of the construction certificate right the first time. But it filed the certificate late, after the 18-months-plus-15-days had elapsed. And this certificate likewise showed that operation had commenced before the application was on file.

The Enforcement Bureau has proposed a fine of $20,000, which is exactly the expected penalty for two instances of unauthorized operation.

That should be the end of the story.

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Telecom Tickler 2011 - CPNI Certifications Due By March 1

Heads up, all you telecommunications carriers and interconnected VoIP providers! Your annual reports certifying compliance with the Customer Proprietary Network Information (CPNI) rules are due by March 1, 2011. And you don’t have to take our word for that: the Commission has issued a helpful reminder notice to make sure that you’re on top of this chore. The Commission has also helpfully provided a copy of an acceptable template for CPNI certifications, as well as a series of Frequently Asked Questions (FAQ). 

As we have explained before (here and here, for example), the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure. Since 2008, the rules have required that telecommunications carriers and interconnected VoIP providers have an officer sign and file with the Commission a compliance certificate, annually, stating that he or she has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with the rules. The carrier must also provide: (a) a statement accompanying the certification explaining how its operating procedures ensure that it is or is not in compliance with the rules; and (b) an explanation of any actions taken against data brokers and a summary of all customer complaints received in the past year concerning the unauthorized release of CPNI.  

The Commission takes this reporting requirement very seriously.

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You Could Be A Wiener!!!

FCC launches Design-An-App contest; Goal: Equip citizenry for self-defense in Open Internet struggle

Are you a “citizen solver”? Do you want to become one?

As broadband providers across the country contemplate what they’re going to have to disclose to consumers under the FCC’s new “Open Internet” transparency requirement, the Commission is looking to open a new transparency front. The troops to be deployed to that front? An army of consumers, who would be provided with software that will reveal to them, in the comfort of their own homes, precisely what their ISPs’ traffic management practices are. 

And the Commission has thought of a fun and cheap – well, cheap, at least – way to accomplish this goal.  A contest!  Like one of those Thanksgiving Day essay contests, but with software and the Internet and stuff. You get to spend hundreds of hours designing a software application or writing a research paper, which you then submit to the FCC. If your entry wins, you get to travel to Washington, D.C., to attend a reception with Chairman Genachowski. And (are you sitting down?) up to $500 of your travel costs will be paid by Uncle Sam, plus if the winning entry is from a team, a total of up to $1,500 in travel costs will be reimbursed! Be still my heart! (There is no second prize, but if there were, we suspect it would be the opportunity to attend two receptions with the Chairman.)

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NYPD (Not Too) Blue Moon

Second Circuit tosses FCC fine against ABC stations for bathroom scene featuring Charlotte Ross's buttocks

The U.S. Court of Appeals for the Second Circuit has handed the FCC another set-back on the indecency front. A unanimous panel of the Court has issued a Summary Order vacating the $1.2 million in fines that the Commission sought to impose on ABC and its affiliates for a 2003 episode of NYPD Blue. According to the Court, the FCC effectively conceded away its case.

As indecency cognoscenti will recall, the FCC got its knickers all in a twist about the show’s opening scene, which featured the comely Charlotte Ross disrobing in a bathroom as she prepared to shower. The scene included shots of Ms. Ross’s buttocks for slightly less than seven seconds, total. But that was enough for the FCC, which determined that the “lingering shot” of her derriere was “shocking, pandering and titillating”. (The Commission was not, however, similarly disturbed by the fleeting image of the side of one of her breasts.) The penalty? A $27,500 fine against each of 44 ABC affiliated stations.

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Media Bureau Cracks The EEO Whip

Bureau whacks two licensees for $8K and $20K for inadequate recruitment and record-keeping

The Media Bureau celebrated the end of 2010 (or maybe the arrival of 2011) by serving warning that, for every single full-time job opening – no exceptions – broadcasters must notify multiple recruitment sources that are likely to refer applicants from diverse backgrounds. Exclusive reliance on over-the-air announcements and Internet postings will not do the trick.  Neither will reliance on word-of-mouth or unsolicited walk-ins standing alone.  And, of course, all notification activities (and other recruitment minutiae) must be documented in the annual EEO report that stations place in their public inspection file on the anniversary of their renewal application filing.

Happy New Year!

This celebratory heads-up was delivered in Notices of Apparent Liability (NAL) issued to two separate broadcast groups late on December 29.

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Listen Up! Final Pieces Of Hearing Aid Compatibility Rule Revisions Now In Effect

As we reported last August, the FCC had adopted new rules governing hearing aid compliant handsets. Those rules – most of which became effective back on October 8 – closed some loopholes that had allowed manufacturers like Apple to sell iPhones without having to comply with certain regulatory chores applicable to the sale of broader lines of handsets. But one element of the new rules did not take effect back in October: specifically Section 20.19(f), which requires manufacturers to disclose to consumers if handsets operate over air interfaces or frequencies for which no technical standards have been established. Since the disclosure requirements of that section (and related revisions to FCC Form 655, the Hearing Aid Compatibility Status Reporting Form) needed prior approval from our friends at the Office of Management and Budget (OMB), those particular aspects of the new rules have been in a holding pattern for several months. But OMB finally gave the FCC’s changes the old thumbs up (on December 7), a fact which the FCC has now duly published in the Federal Register . As a result, Section 20.19(f) has become effective on December 14, 2010.  

Handset sellers take note.

Some Fine Points About Fining

Notice of apparent liability illustrates questionable priorities in FCC’s “base forfeiture” calculation approach.

March 31, 2010, was probably not a good day for Daniel Smith, the individual licensee of a stand-alone FM in scenic Belle Plain, Kansas (just a hop, skip, and 26-mile jump down the road from Wichita). That’s when the folks from the Enforcement Bureau arrived to inspect his station. Seven months later, he’s looking at a Notice of Apparent Liability (NAL) that says he owes the guv’mint $25,000

While that’s a healthy fine for sure, closer analysis of Mr. Smith’s alleged transgressions and the way the Feds are calculating his penalty provides some interesting, and possibly troubling, insight into the FCC’s priorities.

It’s safe to say that Mr. Smith was apparently not a stickler for complying with the Commission’s rules.  Here's what the NAL tells us about the inspection of his station:

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Comcast And The Tennis Channel: ADR, Here We Come

Mediation may be completed before Thanksgiving 

Comcast and the Tennis Channel have opted to try to resolve their differences through “private mediation using a third-party neutral selected by the parties.” So if you were planning on camping outside the FCC’s offices in hopes of snagging courtside seats in the FCC’s hearing room to watch a full-blown public hearing, your calendar just got freed up. The parties filed a “Joint Notice” advising the Commission of their decision to go the Alternative Dispute Resolution route. Since the notice was a mere two sentences long, it was somewhat lacking in detail – although Comcast and the Tennis Channel did say that they have agreed to “complete the mediation by November 24, 2010” and that they’ll be sure to let the FCC if they wrap things up before then.

Bureau Seeks Comment Re New Act's Effect On Hearing Aid Compliance Proposals

 Back in August we reported on a wide-ranging “Policy Statement and Second Report and Order and Further Notice of Proposed Rulemaking” (Order) aimed at expanding the reach of the Commission’s rules governing hearing aid compatibility. And just yesterday we reported on the recently-signed-into-law Twenty-First Century Communications and Video Accessibility Act of 2010. Recognizing that that far-reaching law could have an impact on the proposals the Commission has put on the table in its Order, the Wireless Bureau has now published a notice in the Federal Register expressly asking commenters to address the effect of the 21CenComVidAccAct on the FCC’s proposals. Anyone planning to try to help the Bureau out in assessing the Act’s impact better get cracking, though: the Bureau is not altering the previously-established comment/reply comment deadlines. That means that you have until October 25, 2010 to file comments and November 22, 2010 to file reply comments. Since the 21CenComVidAccAct consists of 26 pages of fine-print legalese, time may already be running short.

In Surprising Turnaround, FCC Warns Wrongdoer To Tell The Truth

Recent case suggests it is okay to keep lying to the FCC, until they write back and ask you not to.

Pop quiz: Raise your hand if you think you can get away with a deliberate flat-out lie to the U.S. Government – even after they catch you at it. Joshing with the post office clerk doesn’t count. We mean responding to an official letter of inquiry with an intentional falsehood about a material fact.

We don’t see your hand raised. Surprise – chances are, the worst the FCC will do is send you a letter asking you to please not do it again.

We reported back in April about the unwisely-named “Phonejammer” company, fined $25,000 by the FCC for selling, as you might expect, cell phone jammers, which are illegal in the United States. (In a humorous digression, the April piece stated that Texas and Florida allow open carry of firearms. Thanks to the many, many readers who sent us emails, we understand now that was incorrect. Please stop writing us about this.)

As we noted, Phonejammer denied to the FCC that it had marketed in the United States. The denial came in two letters, responding to questions from the FCC. The company bluntly said it “does not market to the United States, and has not shipped or distributed units to the United States.” The FCC read this while holding a jammer in each hand, both purchased in the U.S., with a Phonejammer invoice for one and a Phonejammer credit card receipt for the other. The FCC also had open the Phonejammer web site, which gave every sign of selling and shipping to U.S. residents.

Both FCC inquiries to Phonejammer included a requirement that answers be supported by affidavit, so that untruths could be prosecuted for perjury. The company’s responses left out the affidavit both times.

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Tennis Channel Raises Racket Against Comcast

Questions of possible anticompetitive conduct to be examined

It’s ad in, with the Tennis Channel serving against Comcast at the FCC. The Media Bureau has designated for hearing the Tennis Channel’s program carriage complaint against the cable giant (and would-be NBC merger partner). While that doesn’t necessarily mean that the Tennis Channel will ultimately prevail in the match, it’s a good step in that direction. But there’s still plenty of in-court (or maybe out-of-court) action on tap before the final call will be made.

The Tennis Channel put the ball in play by serving up a complaint against Comcast. According to the Tennis Channel, Comcast has insisted on carrying it on Comcast’s Premium Sports Tier, even though Comcast carries several of Comcast’s affiliated cable channels – channels that happen to compete with the Tennis Channel – on more broadly distributed tiers. From the Channel’s perspective, this is a bad call: broader distribution means access to larger audiences and more potential revenues.

While Comcast struggled in the early rounds to counter the Tennis Channel’s volleys, the Bureau concluded that the complaint established a “prima facie” showing that Comcast had unreasonably discriminated against the Tennis Channel.

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Longley-Rice Dependent Studio Site? No Prior Authorization? $7K, Please!

Audio Division issues fine for failing to ask for prior approval of a compliant studio site

The Media Bureau’s Audio Division has shone a light on a question relating to the placement of a main studio. The question:  what is the proper procedure for relying on Longley-Rice calculations to assure compliance with the main studio location rule?

SPOILER ALERT: For those of you who prefer to cut to the chase, here’s the answer. According to the Audio Division’s latest pronouncement, broadcasters MAY rely on Longley-Rice to confirm that a site is within the appropriate contour for main studios, BUT FCC review and approval of the underlying calculations MUST be sought BEFORE the main studio is relocated to that site. Oh, and by the way, if you happen already to have jumped the gun and moved your main studio to a Longley-Rice-justified site without having asked for the Commission’s blessing, get your checkbook out: if this decision stands, you’re probably looking at a $7K fine if and when the Commission finds out about your premature relocation.

The story starts back in 2002.

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FCC Blackout Coming

Financial records to be unavailable October 1-18 (maybe longer) as Commission implements new financial system

Don’t be lending the FCC any money if you need to get paid back before mid-October, at the earliest. The Commission has announced that the first 18 days (at least) of the next fiscal year – starting on October 1, 2010 – will be a “financial system blackout period”. The Commission is implementing a new financial system, and the down-time will be necessary to ensure that the new system gets properly installed and fully operational.

This could affect a variety of applicants and licensees, so listen up.

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Broadcasters Beware: Non-Operation Could Lead To Non-Renewal

Silence may be golden, but apparently not to the Media Bureau.

With the start of the next broadcast renewal cycle less than a year away, now would be a good time for broadcasters to start preparations for that octennial exercise. And the first thing each licensee ought to do is make sure that its station is actually operating. It appears that the Media Bureau, troubled by the number of non-operating stations – which is at an historic high, according to one in-the-know observer – is looking into how a station’s failure to operate during the preceding license term might be factored into the renewal process.

This is not good news if you happen to be off the air. It’s really not good news if your non-operation has dragged on over a significant portion of your most recent license term.

The available stats establish that just under 200 AM and FM stations had reported to the Commission that they were off-the-air as of September 1.  And beyond that is the separate universe of stations that have (a) ceased operation but (b) not bothered to tell the Commission (even though the FCC rules – Sections 73.561(d) for NCE FMs, 73.1740(a)(4) for commercial stations – require them to do so). 

As some folks at the Commission see it, it’s quiet out there . . . too quiet.

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Comment Deadlines Set In Hearing Aid Compliance Proceeding

Listen up! Last month we reported on a Notice of Proposed Rulemaking looking to extend the reach of the Commission’s Hearing Aid Compliance rules. The NPRM has now been published in the Federal Register, which in turn sets the dates for responsive comments and replies. Comments on the NPRM are due by October 25, 2010; reply comments are due by November 22, 2010.

Fox v. FCC: FCC Concentrates And Asks Again

Take "no" for an answer?  No way!  FCC seeks rehearing at Second Circuit.  (Supremes will just have to wait.)

As we reported last month, the U.S. Court of Appeals for the Second Circuit overturned the FCC’s indecency enforcement regime as unconstitutional. That left the FCC with only three options if it wanted to fight to defend its indecency regime. It could either: (1) go back to the three judges who rejected the policy, trying to convince them that they got it wrong; or (2) ask the entire en banc Second Circuit (which includes ten active-service judges) to reverse the three-judge panel’s decision; or (3) go for broke and ask the U.S. Supreme Court to review the case. (Obviously, abandoning the indecency regime was also a fourth option, albeit not one the FCC was likely to embrace).

Late in August, the FCC made up its mind: it’s going for Options (1) and (2), leaving for another day (and maybe another case) the possibility of Supreme Court review of indecency enforcement.

According to the FCC’s petition for rehearing, the Second Circuit panel’s Fox decision went too far in overturning the entire indecency enforcement regime. The Commission asserts that the panel’s conclusion – that the FCC’s overall indecency policy is unconstitutionally vague – is inconsistent with earlier decisions by the Supreme Court, the D.C. Circuit, and even the Second Circuit itself. The Commission argues that the Fox decision rejects the “contextual approach” to indecency analysis the FCC has used in the past – and that, by so doing, leaves the Commission with no way to enforce the federal laws prohibiting indecent broadcasts.

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Enforcement Shot Clocks - Tick Tick Tick . . .

Statutes of limitations apply to FCC enforcement actions

Let’s say you’re a licensee on the wrong end of one (or more) of the several hundred thousand (or more) complaints sitting in piles in the Enforcement Bureau, awaiting some kind of action. You might be frustrated by the glacial pace of the FCC’s processes – after all, many of those complaints have been pending for years. 

But wait – there may be a silver lining to that slow-moving dark cloud hanging over you. 

Federal law – 28 U.S.C. §2462, if you care to look it up – requires that lawsuits to enforce a civil fine, penalty or forfeiture be initiated within five years after the underlying claims accrue. In other words, if the government’s got a claim against you, they’ve got five years to use it or lose it. The good news is that this “statute of limitations” could shield you from financial penalties even if the FCC eventually decides that you violated FCC rules.

Much of the credit for this potential benefit goes to the byzantine procedural maze the FCC must navigate before it can even start to think about suing a broadcast licensee.

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Contest Faux Pas: A Day Early, $4K Short

Attention to detail de rigueur when it comes to contests

A Maryland FM station jumped the gun on its own contest back in June, 2008 – and it looks like it’s going to cost the licensee $4,000, according to the Enforcement Bureau.

The station’s heart was obviously in the right place. It invited listeners to send in photos of their dads, with one entry ultimately to be chosen for the grand prize just in time for Father’s Day. The “official rules” and on-air promos provided that the contest would run “through June 13” (which happened to be the Friday before Father’s Day in 2008). But the rules also provided that the winner would be selected on June 13, and promos for the contest indicated that each daily drawing would be announced at 7:20 a.m. So while the “through” language suggested that entries could be submitted all day long (possibly even up until 11:59 p.m., at least as a technical matter), the fact that a drawing was to be conducted on June 13 gave the contrary impression that the cut-off might be earlier in the day than that – and the fact that daily winners were to be announced at 0-dark-30 indicated that the cut-off time would logically have to be no later than 0-dark-29. 

So when was the real deadline on June 13?

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Listen Up!

FCC expands access to wider range of hearing aid-friendly devices 

In a wide-ranging “Policy Statement and Second Report and Order and Further Notice of Proposed Rulemaking” (Order), the FCC has taken the expected step of expanding the universe of devices covered by its Hearing Aid Compliance rules, and at the same time has sought comments on measures that would extend the reach of its rules even further. Its goal is to ensure that hearing-impaired folks will have access to “innovative and advanced” handsets that will assist them in “participat[ing] fully in the American economy and society.”

Since 2003, the FCC has been slowly ratcheting up the quantity and quality of wireless handsets which must be made available to persons with hearing problems. The Commission has for years required equipment manufacturers to produce, and CMRS carriers to provide, certain numbers or percentages of hearing aid compliant (HAC) handsets as part of their offerings to the public. In 2008 the Commission mandated phased-in increases (through 2011) in the percentages of available HAC handsets; it also specified how many “acoustic coupling” or “inductive coupling” units had to be available to customers. (Acoustic coupling amplifies sound from the handset device while inductive coupling effectively creates a new audio receiver in the hearing aid from the telephone unit, reducing feedback and undesired ambient noise amplification.)

The FCC also requires annual reports in which carriers must detail the dates and quantities of each type of HAC unit they offer.   Enforcement of the rules has been unusually vigilant and stern, with many carriers receiving five-figure fines for falling a phone or two short, or even for simply failing to file the required report.  (The Commission has gone so far as to threaten such non-telecom companies as 7-Eleven and Circle K with hefty fines for failing to file HAC reports – since both 7-Eleven and Circle K stock prepaid handsets for their customers.)  

Clearly, the FCC means business when it comes to HAC phones.

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Sometimes The FCC Says Please

FCC seeks voluntary cooperation in protecting airport weather radars from interference.

Having occasionally criticized the FCC for what might be perceived as over-enforcement – here, for instance, or here, or here – we welcome the chance to balance the record by crediting the Commission when it takes a kinder, gentler approach.

Not everyone gets Internet service through the phone company or cable company. Some subscribe to a wireless Internet service provider, or WISP, that installs a radio link to the user’s home or business. Many WISPs favor three particular frequency bands that do not require an FCC license, yet allow relatively high power operation that can reliably cover distances of several miles.

Seeking to add capacity, the FCC began a proceeding in 2003 to enlarge one of these bands, at 5 GHz. The frequencies it sought to add were occupied, as is most usable spectrum – in this case by federal government radars.

With the help of federal spectrum experts, the FCC wrote rules that allow WISPs and others to use the band, so long as their radios are capable of detecting and avoiding the radar signals. That took some time. Another delay ensued while the FCC, the government users, and the manufacturers worked together on test procedures to evaluate whether candidate devices in fact met the detect-and-avoid requirements. But eventually everything was in place.  The FCC began issuing equipment certifications, and WISPs began offering service in the band.

But a problem arose.

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Muy Caliente: Million Dollar Payment In Univision Payola Probe

 Not quite two years ago, we called our readers’ attention to developments on the sponsorship ID front, Spanish-style. What got our attention back then was the fact that the Enforcement Bureau had sent out a number of Letters of Inquiry (LOIs) to a number of Spanish language stations which allegedly had dealings with Univision Music Group (UMG), an entity controlled by Univision Communications, Inc. (UCI). The back-story: a former UMG executive had spread a boatload of specific factual allegations about specific payola-like conduct in a lawsuit filed out in California. Word of those allegations – along with a list of stations allegedly involved in payola-like conduct – had reached the FCC, and the Commission was interested in checking things out for itself.

We concluded that report by pointing out that we didn’t know how long this regulatory telenovela would take to play out, or what the final upshot would be.

We now know.

Univision Radio, Inc. has entered into a Consent Decree with the Enforcement Bureau. No admissions of wrong-doing, mind you, but Univision Radio does agree to make a “voluntary” contribution to the Feds to the tune of $1,000,000. Plus, it agrees to an extensive set of “Compliance Plans” and “Business Reforms” designed to discourage sponsorship ID violations.

URI gets something in return.

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Swami, How I Love Ya, How I Love Ya . . .

[Blogmeister’s Note: A recent post alluded to our crack First Amendment guru and Supreme Court Observer, Kevin Goldberg, and his assessment of the likely vote should the Second Circuit’s Fox decision return to the Supremes. In response to a surge of reader interest in his prognostications, we have asked The Man to give us a look-see into Kevin’s Krystal Ball. Kevin has asked that we note for the record that he: (a) accurately predicted the result in the original Fox v. FCC decision in the Supreme Court (well, sort of accurately – he mixed up the votes of Souter and Kennedy) and (b) has correctly picked the winner of the last three World Cup finals. So he seems to feel that he’s on a bit of a roll . . .]

I see the Supreme Court affirming the Second Circuit – and, thus, tossing out the FCC’s indecency policy – by 7-2, or maybe 6-3.   Here’s my thinking.

Let’s start with the Court’s recent decision in United States v. Stevens.  There the court voted 8-1 not to carve out new exceptions to the First Amendment in order to criminalize the production or sale of videos depicting animal cruelty.  Sure, trafficking in animal cruelty videos isn’t the equivalent of broadcasting indecent speech. But Stevens sheds light on (a) the degree of unpleasant (or even outright disgusting) speech each Justice is willing to tolerate and (b) the level of vagueness he or she will or will not tolerate in a law or regulation. Throw in several statements made during the oral arguments the first time the Fox case rolled through the Supreme Court (it was argued on Election Day 2008), and we can get some sense of how each Justice might vote on the constitutional issue.

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Indecency In A Post-Fox World: What's Up Next?

Whither the Commission, and the rest of us, from here?

Now that the initial hoopla attendant to the release of the Second Circuit’s Fox decision has quieted down, let’s take a gander at legal scenarios that might be in store for us.

Most obviously is the prospect of further efforts by the FCC to convince some court, any court, that the Second Circuit panel’s decision was wrong.   The options available to the Commission are:

Petition for rehearing to the Second Circuit panel. This would require the FCC to convince at least two of the panel’s three judges that the decision they just made was wrong. Good luck with that.

Petition for rehearing en banc to the full Second Circuit. This would require the FCC to convince at least six of the ten active judges sitting on the Second Circuit that the whole court should take a look at the panel’s decision. According to the Federal Rules of Appellate Procedure, en banc rehearings are generally “not favored” and “ordinarily will not be ordered”. So good luck with that, too.

Petition for writ of certiorari to the U.S. Supreme Court. This is the classic “taking it to the next level”, and is probably the best appellate option the FCC has. But the Supremes are under no obligation to review the case; in fact, the odds are that they won’t agree to review any case (in the term ending in June, 2009, the Court reportedly denied 98.9% of the cert petitions filed). Still, the Court heard the Fox case back in 2009, so the Supremes obviously have some interest in it. If the FCC wants to keep the ball alive on the judicial side, Supreme Court review is likely its best bet.

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TV On The Move Means Less to Watch

FCC waiver opens door for digital mobile TV receivers that won’t receive most stations.

A big chunk is missing from the armor of the All-Channel Receiver Act, the law that lets the FCC require every television receiving device to receive all TV channels. The FCC has adopted and enforced all-channel rules in the past, applying them not only to conventional TV sets but also to any device with a TV tuner – even VCRs and DVD players that have no video screen.  The rules have required reception of not only all channel numbers but also all transmission formats. A half century ago, the FCC required all TVs to have UHF tuners to receive Channels 14-69.  More recently, it insisted that all receivers include digital receiving capability, and handed out hefty fines for anyone trying to dump their inventory of analog-only TVs without adequately warning purchasers they were buying soon-to-be-obsolete hardware.

Today’s new video frontier is digital mobile TV that you can watch in the car, on the bus, or on your skateboard.  [Blogmeister Disclaimer: The preceding sentence is not intended to promote watching TV while skateboarding, or driving, or on public transportation without adequate sound-proofing.]  Manufacturers recently started producing mobile digital TV receivers that do not have analog tuners, because analog tuners mean a little more cost, more weight, and less battery life.  Some versions cannot even receive conventional digital television, the kind we watch at home. 

A small minority of TV stations add a special “mobile/hand-held” (M/H) bitstream to the standard digital signal for better reception in a mobile environment. Some of the new digital mobile TV devices require this bitstream to work – as a result, they can’t receive any analog or most digital TV stations.

In other words, the new devices with those limitations violate the standards imposed by the FCC under the All-Channel Receiver Act.

Realizing they might be on the precipice of catching severe regulatory flak, Dell and LG Electronics – both of whom happen to make the devices – ran to the FCC and asked for a quick waiver, so that they can move products that don’t receive all TV formats. Sure enough, they got what they wanted pretty quickly.

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Second Circuit Flushes FCC Indecency Policy

Fox wins third round in long-running slug-fest; next stop – the Supreme Court?

In a huge win for broadcasters and First Amendment-loving citizens, the U.S. Court of Appeals for the Second Circuit has struck down the FCC’s indecency policy.  According to the Court, that policy violates the First Amendment because it is unconstitutionally vague and creates a “chilling effect” on constitutionally protected free speech. Importantly, the Court’s decision extends beyond the “fleeting expletives” aspect of indecency regulation (which was the original focus of the case) and, instead, strikes down the FCC’s fundamental policy on indecency.

The Second Circuit issued its opinion in Fox v. FCC, about which we have written before (check here and here and here, for examples). The case involves comments made in front of an open mike by (a) Cher (“fuck ’em”) and (b) Nicole Richie (“Have you ever tried to get cow shit out of a Prada purse?  It’s not so fucking simple.”). 

The FCC initially held that those comments, which were broadcast by Fox, were indecent. Fox appealed to the Second Circuit and, in 2007, the Circuit overturned the FCC’s policy on technical, administrative law grounds. As the Second Circuit saw it, the supposedly indecent remarks were “fleeting expletives”, the kind of incidental, extemporaneous exclamations that the FCC had historically not penalized. While that hands-off policy had changed with the 2004 Bono/Golden Globes decision (involving a broadcast in which Bono, upon receiving an award, famously exclaimed, “This is really, really, fucking brilliant” ), in its first whack at the Fox case in 2007 the Second Circuit determined that the FCC had not adequately explained the shift in its treatment of “fleeting expletives”.

In 2009 the U.S. Supreme Court reversed that narrow decision, holding that the FCC’s explanation was just fine, thank you. The Supremes shipped the case back down to the Second Circuit for another look. The Second Circuit’s initial opinion had included an extended, non-decisional discussion of constitutional issues – a discussion which unmistakably indicated that the Circuit felt the FCC’s policy to be unconstitutional. As a result, many – possibly most – observers figured that the Second Circuit would use this second bite at the apple to reach the constitutional issue for real.

The Second Circuit did not disappoint.

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Form 323: SSN Disclosure Requirement Largely Written Out Of Form In Last-Minute Revision

Court ruling on Fletcher Heald mandamus petition confirms elimination of need for new SSN-based FRNs to complete revised Ownership Report

Last week we reported that the U.S. Court of Appeals for the D.C. Circuit had denied our mandamus petition, and that the July 8 deadline for biennial Ownership Reports (FCC Form 323) would remain in effect. What with the last-minute nature of the Court’s order and the consequent need to wrap up a bunch of 323’s by the deadline (not to mention various other distracting obligations), we didn’t highlight perhaps the most important aspect of the order: the Court effectively confirmed that nobody needs to provide his/her Social Security Number (SSN) for a new FRN in order to file ANY Ownership Report – biennial or otherwise – until further notice.

According to the Court, the FCC has taken the position that “no individual attributable interest holder will be required to submit a Social Security number to obtain an FRN [i.e., FCC Registration Number] for the July 8, 2010, biennial filing deadline or for any imminent non-biennial filing of Form 323.” And since the Court’s denial of our mandamus petition was based on the FCC’s stated position, it appears extremely doubtful that the FCC will be moving off that position soon.

As a result, any person holding an attributable interest in a commercial broadcast licensee – i.e., any person who would have to be reported on Form 323 – who has not already submitted his/her SSN to the FCC in order to obtain an FRN need not do so. This is a significant development, and a significant retreat on the part of the Commission.

Here’s a step-by-step chronology of the rise and fall of the FRN requirement.

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Form 323: The Court Weighs In

We’ve received many calls over the last week or so asking whether the D.C. Circuit had issued any decision with respect to our mandamus petition about the revised Form 323. The answer has been “no” – until, that is, today, when the Court issued a very brief order, which you can read here, denying the petition.  As a result, Thursday's deadline remains in effect. 

Thar She Blows!

Enforcement Bureau sets out on an indecency fishing expedition, or a wild goose chase – or, perhaps more accurately, a Fox hunt.

Grab your rod, bait your hook, put on your floaties – and don’t forget the sunscreen – it looks like we’re all going on a fishing expedition, thanks to the FCC’s Enforcement Bureau!

Apparently determined to make the already murky area of indecency regulation even murkier, the Bureau has: (a) issued a Notice of Apparent Liability, to the tune of $25,000, to Fox because Fox’s response to a Bureau inquiry was not, in the Bureau’s eyes, responsive enough; and (b) issued more than 200 more letters of inquiry, addressed to all Fox affiliates. With that many hooks in the water, the FCC is obviously hoping to land a couple of big ones.

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Honey, Please Pick Up Milk At The Phone Company

FCC dings convenience stores – again – for selling phones and not filing forms.

The FCC has issued official warnings – “citations,” they call them – against eight wireless phone companies, alleging failure to file certain reports relating to compatibility of handsets with hearing aids. Seven of the companies indeed look like wireless service providers. Actually we don’t know that for sure, but at least their names include words like “wireless” and “cellular.”

But the eighth alleged offender is Circle K Stores, Inc., which most people don’t think of as a phone company. It operates a chain of convenience stores. Nevertheless, the FCC calls Circle K a “reseller of wireless services” because it stocks prepaid handsets. Circle K had earlier told the FCC it obtains the handsets from an external source. It also told the FCC it is not now, and never has been, involved in the operation of a wireless telephone service.

But the FCC, unmoved, warned Circle K that continued violations (i.e., not filing reports) could expose the company to fines of $150,000 per violation, per day. That’s a lot of milk.

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Part 17 Rulemaking Comment, Reply Comment Deadlines Set

A couple of weeks ago we reported on the FCC’s Notice of Proposed Rulemaking (NPRM) looking to overhaul the Commission’s regulation of towers, er, we mean “antenna structures”. The NPRM has now been published in the Federal Register, which establishes the deadlines for comments and reply comments in response to the NPRM. Mark your calendars: comments are due by July 20, 2010; reply comments are due by August 19, 2010.

Serial CPs, Implied STAs and Spectrum Warehousing

Audio Division raises regulatory eyebrow at efforts to prolong construction permits beyond their expiration

Spectrum warehousing – the practice of acquiring spectrum and then sitting on it, unused. Maybe because you don’t want your competitor(s) to have it, maybe because you can’t afford to do anything with it just now, maybe for other reasons. Whatever may be the case, the FCC has historically frowned on the practice. The Commission figures that once authority to use spectrum has been issued, that spectrum should be used.

The trouble is, while the Commission talks a good game, its willingness to throw the flag on apparent warehousing practices has been more muted – and occasionally, at least in the eyes of some, misdirected. (For instance, the trial balloons floated by some FCC reps in connection with the National Broadband Plan – the suggestion being that TV licensees are somehow wastefully sitting on spectrum that could be better used for broadband.  But it’s been less than a year since the TV industry completed its forced march out of Analog Land and into Digital Paradise, so even if they’re not taking full advantage of the spectrum – and it’s not at all clear that they’re not – it’s a bit early in the game to declare them malingerers and take their spectrum away because of that. Oh yeah, and has the FCC analyzed how much broadband-suitable non-broadcast spectrum is sitting fallow? – some Senators don’t think so. But I digress.)

In any event, we can report that the FCC’s Audio Division recently flexed more than its vocal cords when it comes to spectrum warehousing. And in doing so, it alerted licensees involved in channel reallotments that they had better be on their toes or risk losing the authority to operate at all.

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Want To Save Yourself $3,000? Update Your ASR Registration!

From our “The Job’s Never Over ’Til The Paperwork’s Done” file

Here’s a tip for anyone who’s buying a station the assets of which include a tower subject to FCC registration.

When ownership of an antenna structure which is subject to FCC registration changes hands, the new owner must update the tower’s Antenna Structure Registration (ASR) to reflect that change.  The update does not occur automatically when notice of consummation of the assignment of the station’s license if filed with the FCC. Moreover, the Commission has made clear that responsibility for insuring that the notification is made falls on the buyer, not the seller. Since the ASR information is in a separate FCC database, it needs to be updated separately.  Way back in our March, 2004 Memo to Clients, readers were reminded of this relatively obscure requirement.

We mention this here because a couple of licensees apparently didn’t get the memo: both were the subject of recent forfeiture orders – to the tune of $3,000 each – for failing to update their ASR tower ownership. (You can read those orders here and here.) 

So, apparently, you can either remember to update the FCC’s records, or you can run the risk of having to fork over $3,000. Your call.

Updating ownership information is a relatively simple on-line chore – one which certainly seems to be easier than writing a $3K check to Uncle Sam. You go to the FCC’s ASR homepage, login (you’ll need your FRN and FRN password for that), and work your way through a number of screens. We’ll get you started: (1) The first choice you have to make is simple: pick “Manage Your ASR Numbers”; (2) at the next screen, select the option for “OC – Ownership Change”, and then click “continue”. You’ll encounter several more screens after that. You’ll need the FRN of the tower’s seller (since the tower’s registration presumably is listed under the seller’s ID), and it will be helpful to have the registration number(s) of the tower(s) changing hands. The later screens may not be as obviously user-friendly as, say, your favorite ATM, but not to worry – you should get the hang of it in short order.

And remember, by taking care of this little chore, you’re insuring yourself against a potential $3,000 disappointment.

Good luck.

Part 17: Subject To Change

FCC looks to overhaul antenna structure strictures.

You know how people have been telling you for, like, years that you really ought to clean out your refrigerator? And when you finally get around to it, you find (among other things) that those fuzzy things that look like a science experiment sprouting behind the old jar of maraschino cherries at the back of the top shelf have sell-by dates that went by several years ago?

That’s what the FCC is experiencing right now – but instead of its refrigerator, what needs cleaning up are the rules governing antenna structure construction, lighting, marking and maintenance. 

And so the Commission has released a Notice of Proposed Rulemaking (NPRM) looking to overhaul its tower-related rules, which comprise Part 17 of the rules. While the Commission specifies a number of particular changes it has in mind (see below for examples), the proceeding appears to encompass the entire regulatory scheme of Part 17. Anyone who has an antenna structure or expects to build one may want to take the opportunity to offer their suggestions, since history suggests that, once the structure rules are revised, they’re likely to stay that way for a while.

The FCC, of course, has long required all of its regulatees to comply with various non-RF related aspects of their antenna structures.  (Insider tip: While you may want to refer to them as “towers”, don’t; the government prefers the more elegant term “antenna structures”.) And it routinely issues forfeitures for non-compliance with, e.g., lighting and painting specifications. The goal is to keep aviators and aviation passengers from flying into those structures.

But because the focus here is on aviation, the FCC shares antenna structure responsibilities with the Federal Aviation Administration (FAA). Historically, the FAA has set most of the substantive standards (for, e.g., lighting and painting), even though the FCC has the responsibility for enforcing those standards.  But the two agencies apparently don’t coordinate as well as they might – and, as a result, discrepancies between the FAA’s requirements and their FCC equivalents can develop.

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Reminder II: Closed Captioning Contact Information Still Due

March 22 deadline passes with less than total compliance

We told you so. Back in March, we reminded all video programming distributors (VPDs) that they were supposed to file their contact information with the Commission as required under the newly-effective rules relative to the closed captioning complaint process. The contact information was due on March 22. But did everybody do what they were supposed to? Apparently not, because on April 27, the Commission issued a public notice reminding VPDs of the filing requirement, noting that “many VPDs” have yet to provide the required information. Demonstrating the seriousness of all this, the public notice warns ominously, if somewhat vaguely, that “[f]ailure to provide such information could result in enforcement action.” That’s tellin’ ‘em.

Anyway, since the Commission seems to feel so strongly about this, we figure that the least we can do is try to give it a hand – so this is a CommLawBlog public service message, reminding VPDs that they’re supposed to submit to the Commission contact information to be used in the event of a closed captioning complaint.

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FCC Proposes Tough Love For 2.3 GHz Licensees

FCC suggests, seeks comments on, harsh new standards for WCS licensees

Of the many, many tasks which the FCC has set for itself in its National Broadband Plan (NBP), attentive readers may have noted one in particular. At page 86 of the NBP, the FCC committed to “accelerat[ing] efforts to ensure that WCS [Wireless Communications Service] spectrum is used productively for the benefit of all Americans.” We had to smile at the use of the word “accelerate” in this context since the FCC has been doing precisely nothing for the last 13 years to bring this spectrum to productive use.   In fact, in contravention of its own rules it has been sitting on applications for almost three years which could already have been providing innovative WCS service. The NBP is striking in that regard, since it repeatedly fails to acknowledge how the Commission’s own inaction and irresolution have often stymied, thwarted or delayed the very objectives which the FCC now claims to be so urgently needed.

Be that as it may, the FCC – while still leaving incumbent WCS licensees and new applicants in limbo – has now requested comment on some very rigorous build-out standards for the 2.3 GHz WCS service.  

Currently, licensees in this service need demonstrate only that they have provided “substantial service” at the end of their ten-year license term.  The term “substantial service” has not been defined with any specificity; instead, the Commission has invoked the ancient formula of “service which is sound, favorable and substantially above a level of mediocre service that just might minimally warrant renewal”. Still, the FCC did deign to identify a few reasonably delineated safe harbors that licensees could rely on: for mobile and point-to-point uses, service to 20% of the population would be deemed “substantial”; for fixed point-to-point uses, service to four links per million of population would do the trick.

But now, apparently determined to bring WCS spectrum to productive use, the FCC is proposing to swing 180 degrees from those relatively liberal build-out requirements and instead impose requirements that are among the harshest ever.

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Jammer Jammed

Cell phone jammer company assessed $25,000 for two Internet sales

We have written elsewhere about the irritations of other people using cell phones in public places. Technology, having caused this problem, also offers a solution: widely available on the Internet are jammers that silence phones nearby, and sometimes at a considerable distance.  We Googled “cell phone jammer” and found dozens of places selling them.

Some outfit calling itself the “Federal Communications Commission” has declared jammers to be illegal. Recently it levied a fine of $25,000 against a company with the unwisely chosen name of “phonejammers.com” that offers them on the Internet. (This is like putting a license plate on your car that says SPEEDER.) The company denied marketing in the United States, but the FCC found two in use that the company had sold. Both were relatively high power, as jammers go – five and eight watts respectively. The five-watter, used by a Texas cosmetology school, resulted in a local cell phone provider lodging interference complaints; the other interfered with calls to and from a sheriff’s office in Florida. One suspects the users had these cranked up a lot higher than was needed to protect the immediate premises.

Ironically, in both Texas and Florida it is legal to openly carry firearms into a Starbucks, say. But not a phone jammer. So when the cell phone at the next table erupts into The William Tell Overture and its owner bellows, “HELLO? HEY! YEAH, IN A STARBUCKS! IT’S RAINING HERE! SO WHERE’RE YOU?” pulling out the jammer is not an option. It’s the firearm or nothing. This may not be good public policy.

Yet the FCC runs roughshod over citizens’ inalienable right to enjoy a cup of coffee in peace. Phone your congressional representative to complain. But please, step outside to make the call. Especially in open-carry states.

Reefer Madness: The Dope On "Joint" Sales Advertising

Blunt talk about marijuana spots

Back in the day, the mere broadcast of a song which might have something to do with drugs could bring the Feds down hard on a station. You old-timers might remember back that far. (You young ‘uns should check out 28 FCC2d 409 and 31 FCC2d 377 if you have any questions.)

 What a difference a couple of decades make! Now not only can you play songs about marijuana, but you might even be able to advertise the stuff. Is this a great country or what?

 There are, of course, all sorts of catches, so read on.

Marijuana is a controlled substance and its sale or distribution is prohibited under Federal and state narcotics laws. However, last October the Department of Justice announced formal guidelines governing its enforcement policy with respect to medically-prescribed marijuana in those states where medical use of the drug is now legal. (About a dozen states have legalized medical marijuana so far.)  In those grass-friendly states the DOJ has ceased prosecutions of legitimate growers and distributors of marijuana intended for medical use.

Legalizing some weed sales has, logically enough, opened up the possibilities for trying to promote such sales through advertising. And sure enough, a number of broadcasters have been asked to run spots for distributors of marijuana, including doctors’ offices and retail outlets. Unlike cigarette advertising, there is no FCC rule or policy that prohibits such advertising (although the Commission has long demonstrated a serious antipathy to drug use and distribution generally). In view of the DOJ enforcement policy, it appears that the current Administration is not likely to impose extra burdens on legitimate, state-sanctioned marijuana use – which suggests that advertising dope for such use should not cause problems (just as promotion of gambling in jurisdictions where it’s legal has long been approved).

However, anyone considering acceptance of medical marijuana ads should pay careful attention to factors such as the following:

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Something Erratum In The State Of . . .

Commission replaces “gender” with “ethnicity” in policy against discrimination in advertising contracts.

It’s really never too late to admit to a mistake. And so it is that, more than two years after the fact, the FCC has issued an Erratum making a seemingly major change to language originally announced in the Commission’s Diversity Order. (That Order was adopted by the Commission in late 2007, but was not released until March, 2008.) The mistake? When the Commission said “gender” in the original order, it didn’t really mean “gender”; it meant “ethnicity”.

Gender – ethnicity . . . ethnicity – gender . . . you say “tomato”, I say “tomahto”. That’s the kind of mistake that just about anybody could make, right?

The changed language appears in the policy designed to discourage the advertising business practice of including “No Urban/No Spanish” clauses when placing commercials on stations. (For a refresher course on the no-discrimination policy, click here.) The policy, as originally articulated in the Diversity Order, required broadcasters to certify, in their next license renewal applications, that their advertising contracts don’t discriminate on the basis of race or gender. Now the FCC says that it really meant that the certification should specify nondiscrimination on the basis of ethnicity rather than gender.

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Can Network Neutrality Survive Comcast v. FCC? (Spoiler Alert: Maybe.)

A look at successes of the past gives the FCC a way to move forward.

(Author’s note: Last November I posted an item here improvidently titled “How to Solve the Network Neutrality Problem.” My solution was overturned, along with the FCC’s efforts at Internet regulation, by the recent court decision in Comcast v. FCC. Below is a revised path to the same goal that still works after Comcast.)

Network neutrality advocates are in despair following the Comcast decision. That case arose when cable company Comcast selectively hindered customers’ access to certain file-sharing services. The FCC told it to stop. Comcast already had stopped, but went to court anyway to protest the FCC’s butting in. The court ruled for Comcast, asserting the FCC lacks authority to regulate Internet service providers. Comcast is free to decide what content to favor, impede, or block entirely. Read our account here

Network neutrality – the principle that Internet providers should treat content even-handedly – seems to be dead, waiting only for someone to close its eyes and straighten its tie.   The more desperate among its advocates – including at least one FCC Commissioner – speak openly about the nuclear option: a step called “reclassification.”  This means the FCC would reclassify broadband Internet service as a common carrier “telecommunications service,” thereby exposing it to a wide panoply of regulation. As my colleague Paul Feldman notes, reclassification would generate opposition from several industry segments and possibly Congress, and would certainly lead to protracted court appeals. Also the legality of reclassification is in doubt. Many components of Internet service simply do not fit the definition of telecommunications service (see below), and so are not plausibly subject to regulation.

Reclassification is a sledge-hammer. We need a scalpel. Fortunately, one is available.

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In The Wake Of Comcast: Quo Vadis?

FCC faces a range of options, none particularly attractive

As my colleague Mitchell Lazarus concisely analyzed here, the D.C. Circuit has vacated the FCC’s 2008 determination that Comcast’s network management practices violated the 2005 Internet Policy Statement. The Court held that the FCC’s attempt to enforce these particular “net neutrality” policies was invalid for lack of jurisdiction.

 Jurisdiction in this context means power or authority. An independent federal agency’s ability to take any action depends on the authority granted that agency by Congress. If Congress has authorized the agency to act, the agency may act; if Congress hasn’t authorized it, the agency may not act. Of course, things are seldom that cut and dried.  Sometimes Congress authorizes the agency to regulate in a general area but doesn’t mention anything about another, related, area.  (For example, prior to 1984 the Communications Act authorized the FCC to regulate broadcasting, but said nothing about regulating the cable TV industry.) The courts have agreed that, in such cases, the FCC may act in the not-specifically-mentioned area if such action is “reasonably ancillary” to the agency’s “statutorily mandated responsibilities”.

 In the Comcast case, the FCC claimed its regulation of Comcast’s practices was “reasonably ancillary” to a number of the Act’s provisions. But the D.C. Circuit concluded that none of the provisions cited by the FCC imposed any “statutorily mandated responsibility” to which the FCC’s regulation of Comcast might be deemed “reasonably ancillary”. And without that essential nexus, the FCC lacked the power, or jurisdiction, to do what it had done. As a result, the Court’s ruling also signaled that the FCC may lack the power to impose network neutrality principles.

 So where does the FCC go from here if it wants to promulgate net neutrality regulations? There appear to be four major options:

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Dealing With Duopoly: Getting All The Pieces To Fit

Media Bureau finds no problem with TV deal featuring SSA, JSA, other arrangements between two licensees in Corpus Christi market

In the latest of a growing line of cases, the Commission’s Media Bureau has approved a multi-level operating arrangement permitting two television stations in the same DMA to merge aspects of their operations in ways which bump up against – but apparently don’t violate (according to the Bureau) – the Commission’s duopoly rule.

The case involved two stations (we’ll call them Station A and Station B) in the Corpus Christi, Texas market. Common ownership of both stations would be barred by the duopoly rule, but the two licensees perceived considerable potential benefits if the two stations’ operations were conjoined in certain respects. And as often is the case, where there’s a will, there’s a way.

Station A agreed to sell its licenses, network affiliation and syndication agreements, and certain equipment and leases to a third party (“the New Guy”). At the same time, Station A entered into a separate agreement to sell Station A’s real property, certain other equipment, and additional assets to the owner of Station B. Station B and the New Guy also entered into a series of ten-year operating agreements, including a Shared Services Agreement (SSA), a Joint Sales Agreement (JSA), an Option Agreement and an Equipment Lease Agreement – but while the proposed sale of Station A was pending before the Bureau, the New Guy assigned those agreements to Station A. Additionally, Station B agreed to guarantee a bank loan for the New Guy.

Station A and Station B put the SSA, JSA and Lease Agreement into effect immediately, without waiting for FCC approval.  The net result was that significant elements of Station A’s operation became subject to substantial input, if not control, by Station B. For example, under the SSA, Station B provides newscasts (up to 15% of programming) and Station A pays Station B a monthly fee of $100,000. Under the JSA, Station B sells all of Station A’s commercial time and sets ad rates for Station A.

Needless to say, this arrangement attracted the attention, and aggressive opposition, of a competitor in the Corpus market. Alarmed that the arrangement would apparently give 50% of the ad revenues in the market to Station B, the competitor challenged the arrangement as a de facto duopoly and an unauthorized transfer of control. The Commission’s staff ruled otherwise.

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Calendar Update

Procedural fine-tuning, ex parte NPRM comment deadlines set

Two months ago we reported on a couple of Notices of Proposed Rulemaking in which the FCC was looking to fine-tune aspects of its procedural rules and its ex parte rules. Those NPRMs have now appeared in the Federal Register – the procedural rules NPRM here, the ex parte NPRM here. Those publications in turn establish the deadlines for comments and reply comments on the Commission’s proposals. Comments in both proceedings are due by May 10, 2010, reply comments by June 8, 2010.

Calendar Update

Robocall NPRM comment deadlines set

Two months ago we reported on a Notice of Proposed Rulemaking in which the FCC was looking to clamp down on unsolicited “robocalls”. That NPRM has at long last appeared in the Federal Register, which in turn establishes the deadlines for comments and reply comments on the Commission’s proposals. Comments are due by May 21, 2010, reply comments by June 21, 2010.

Absentee Licensee + Absent TBAs = $30K Fine

Enforcement Bureau NALs threaten loss of license for abdication of control

The FCC’s Enforcement Bureau has dropped two notices of apparent liability (NALs, in the vernacular) – each to the tune of $15,000 – on Birach Broadcasting Corporation (BBC). According to the NALs, BBC improperly handed control of its two Michigan AM stations over to the stations’ respective time brokers. The FCC also dinged BBC for failing to staff each station’s main studio with a BBC managerial employee and a BBC staff-level employee.  You can read the NALs here and here. If you’re a licensee with one or more stations LMA’d out to other folks, it would be worth your time to check them out.

  BBC’s trouble began in April, 2005, when FCC agents inspected the two stations, one in Zeeland, the other in nearby Rockford. According to the NALs, no BBC employees were present at either station. Instead, non-owners were there pumping out their own programming with no formal time brokerage agreement (“TBA”, a/k/a “LMA”) in sight at either station. Perhaps thinking, incorrectly, that he was helping BCC out, one programmer told the inspectors that the station was being operated on BBC’s behalf “pursuant to a ‘handshake’” TBA.)

Perhaps disturbed by the situation, the Bureau fired off a Letter of Inquiry (LOI) to BBC. (Actually, the Bureau could not have been that disturbed, since it took them not quite two years from the date of the inspections to get the LOI out the door.)  The LOI asked BBC to cough up any written TBAs it had. In response, BBC provided nothing entitled “Time Brokerage Agreement”, just some invoices signed by BBC and the programmers – one of which specified that the “Customer is responsible for any legal problem caused to the Station” – but no TBAs.

As to main studio staffing, BBC said its owner was responsible for operation of the stations. But according to the FCC’s records, that gentleman’s business address was roughly two hours away from the stations. Wouldn’t that, um, impair his ability to run them? No problem, said BBC’s counsel: given the state of technology, station operations can be supervised remotely.  Be that as it may, though, BBC advised the Bureau that, after the inspections, BBC had hired a management-level employee to work half-time at WMFN and half-time at WMJH.  

The Bureau was not favorably impressed with BBC’s response to the LOI.  (But, again, the Bureau could not have been that unfavorably impressed, since nearly three years passed between BBC’s response and issuance of the NALs.)

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Reminder: Closed Captioning Contact Information Due March 22

Requirement applies to all VPDs, even those exempt from captioning requirements

As we reported last month, the process for registering complaints about closed captioning problems has kicked in. And as part of that process, video programming distributors (VPDs) are required to provide to the FCC, by March 22, 2010, contact information (phone/fax/email) so that the FCC will know how to get in touch with the VPD relative to incoming complaints. VPDs can upload their contact information directly to the FCC by going to the designated page on the FCC’s website (which can be accessed by clicking this link), entering their FRN and FRN password, and then providing the necessary information.

Heads up: all VPDs are expected to upload their contact information, even if they happen to enjoy one or another exemption from the captioning requirements. The universe of VPDs subject to the Commission’s closed captioning requirements encompasses all broadcast television stations, including Class A’s and LPTVs. Some VPDs fall under certain exemptions which relieve them from having to caption programming that is not otherwise captioned.  (For example, VPDs are not required to caption programming if that captioning would cost more than two percent of the VPD’s gross revenues. Similarly, VPDs aren’t required to spend any money to caption their programming if their channel produces less than $3 million in annual gross revenues.) Those exemptions do not relieve the VPD of the obligation to provide contact information as specified by the rules.

While it may seem counterintuitive to require exempt VPDs to post their contact information, there is some common sense at work here. The exemptions apply in large measure to programming that the VPD itself produces. But those exemptions do not relieve stations – including LPTVs – of the obligation to pass through, with the captioning intact, programming which has already been captioned by others upstream in the program distribution chain. In other words, even though a station does not have to caption the programming that it itself produces, that doesn’t mean that the station doesn’t broadcast some (and maybe a lot of) programming that is captioned. And viewers who rely on that captioning will – so the theory goes – want and need contact information if it turns out that there’s a problem with the captioning.

Staff reachable through the provided contact information should be able to “to immediately respond to and address consumers’ concerns.” However, that does not mean that the VPD should be on the hook for any additional costs. The rule (Section 79.1(i)) specifically provides that the “contact information” requirement does not mean that VPDs must alter their normal staffing schedules. However, when staff are available to deal with technical questions, they must know how to deal with closed captioning concerns. In the case of a VPD which is itself exempt from any captioning requirements, the staff reachable through the “contact information” listing should know how, and to whom, to refer any concerns about captioning problems in programming provided by third parties. All closed captioning calls or inquiries should be returned or otherwise addressed within 24 hours.

FCC Rejects Same Application Ten Times - So Far

Persistent applicant seeks successive reconsiderations; Quoth the FCC, “Nevermore!”

This is another in our continuing series on people who just don’t give up.

Back in 2000, an individual with interests in several wireless companies filed applications to provide maritime radio service along various U.S. waterways. The FCC dismissed the applications because they did not meet the coverage requirements then in effect. Unhappy with the outcome, the applicant filed petitions for reconsideration (denied in 2001), a petition for further reconsideration (denied in 2001), applications for review (denied in 2002), and then appeals to the U.S. Court of Appeals (terminated by the court in 2007).

In 2002, the FCC changed the coverage requirements. The same applicant filed a request to have his applications reinstated (denied in 2004), a petition for reconsideration (dismissed in 2005 as untimely), a petition for reconsideration (denied in 2006), an application for review (denied in 2008), and a petition for reconsideration (dismissed in January, 2010). The FCC tossed this last one as repetitious because, in the Commission’s view, it offered no new relevant information. In an unusual move, the FCC added: “We plan to give no further consideration to this matter, and the staff is hereby directed to dismiss summarily any subsequent pleadings filed by [this applicant] or related parties with respect to these applications . . . .”

That makes nine separate times the FCC rejected the same applications. Most people, by then, would have concluded that “No!” means no. That last dismissal for repetitiousness would deter even the most determined applicant. Even fewer of those would have the nerve to try again, after the FCC ordered its staff not to consider further requests.

But this gentleman is apparently cut from different cloth. Undaunted, he filed a petition seeking reconsideration of the dismissal for repetitiousness of his last reconsideration request.

That one did not even make it to the full Commission. In two brief paragraphs, with a terse citation to the “no further consideration” order, a Deputy Bureau Chief dismissed the arguments yet again.

This is an exciting time for those with an interest in someone so indomitable of spirit.  They will eagerly scan the FCC daily releases over the weeks to come. Will he try to extend his streak at the FCC? Or challenge the most recent dismissal in court? Watch this space for updates.

Report From The Court: FCC - 6, Radar Jammer - 0

Fifth Circuit backs FCC on fine issued to manufacturer of radar jamming device.

Most companies are content to lose a case once or twice. But some don’t get the message, and just keep on running up against the wall.

Rocky Mountain Radar (RMR) makes a jammer intended to help motorists evade police radar. It is different from a radar detector (legal in 49 states), which merely signals the presence of a radar beam. The RMR jammer does more. It not only detects the radar beam, but modifies it and sends it back to confuse the police radar device so it cannot register the car’s speed. The driver sails by, with a friendly wave for the officer.

The FCC announced 14 years ago that such jamming devices are illegal. RMR ignored the memo and kept on selling the product. A short time later, the FCC’s then-named Compliance and Information Bureau cited RMR for marketing an unlawful “intentional radiator” – FCC-speak for what most of us call a transmitter.

RMR raised a Clintonian defense. The FCC rules define an intentional radiator as a device that “intentionally generates and emits” radio-frequency (RF) energy. Not guilty, said RMR. Our device does not “generate” RF. Rather, it simply picks up the RF from the police radar and sends it back. Not being an intentional radiator, the jammer is not subject to FCC regulation. QED.

The Bureau disagreed. The device does “generate” a signal, it said. The incoming police beam just serves as a power source. Besides, said the Bureau, the purpose of the device is to cause harmful interference to a licensed service (police radar), which is illegal no matter how we classify the unit.

RMR sought review by the full Commission, which backed the Bureau. Next, RMR appealed to the U.S. Court of Appeals for the Tenth Circuit, whose 1999 decision backed the Commission.

At that point RMR had lost in every available forum except the U.S. Supreme Court. Actually it tried that one, too, but the Court declined to hear the case.

Scholars of communications law are accustomed to ambiguity and uncertainty. But here, for once, there was none. Few principles have been established so plainly: radar jammers are illegal. Some might disagree on whether this is the right outcome, but no one could seriously think the law is otherwise.

Except, apparently, the people at RMR.

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FCC Fine-Tunes Procedural Rules

Proposals are intended to make FCC proceedings more efficient and transparent, and less prone to abuse.

Those of us charged with getting the FCC to do things – issue licenses, grant waivers, cancel fines, all of that – are vitally interested in the fine points of FCC procedures, because understanding them can spell the difference between success and failure.  Just as no one would sensibly sit down to a game of poker without knowing that three of a kind beats two pair, no competent practitioner would take on the FCC without knowing the somewhat more complex rules of that agency’s regulatory game. And, sometimes, part of the job lies in knowing how to navigate those rules most advantageously.

So we take notice when the FCC proposes to change its procedures, as it did in two recent Notices of Proposed Rulemaking (NPRMs).  By and large the amendments are meant to serve laudable goals:  to make FCC proceedings more efficient and transparent, and to forestall some of the more common forms of abuse.

One NPRM proposes internal housekeeping changes which would:

  • allow the staff (in place of the full Commission) to dispose of frivolous or repetitive requests for reconsideration;
  • allow the FCC to amend  an action (as well as to set it aside) within the first 30 days;
  • expand the use of electronic filing and notification;
  • close some of the 3,000+ dockets that have become inactive;
  • split overly large dockets; and
  • clarify the effective date of new rules.

In a separate NPRM, the FCC takes on the always-controversial subject of its ex parte rules.

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Get This Great Phone Free! *

* (With a two-year contract. Fees may apply.)

You know those pesky penalties the cell phone companies impose when you cancel your service before the contract period has expired?  How they keep you from switching providers even when the service turns lousy or the competition offers a better deal? Or a better phone? To folks in the biz, those are referred to as Early Termination Fees (ETFs), and they’re back under the FCC’s microscope.

Cell phone companies offer deep discounts on the phone du jour, but only if the customer signs up for a one- or two-year contract, during which the company recoups the subsidy (and more) from monthly charges. Locking the customer into the contract is an ETF that can range up to $350. Worse, the ETF often remains at the full amount up to the last day of the contract period. Customers have complained their company charges the fee even when they move to an area the company doesn’t serve.

Back in December, we reported that the FCC had put Verizon’s ETF in its crosshairs after public outcry moved Congress to act, or to at least to threaten action. The FCC asked about Verizon’s customer notification policy on ETFs: what do the customers know and when do they know it?

Recently, the FCC widened its scope to include AT&T, Google, T-Mobile, Sprint, and another letter to Verizon. The first, Verizon-only, round of questions focused on how the consumer learns about the ETFs. Now the FCC is interested in how the ETFs are calculated, how they are applied to various phones and service plans, whether (and how) ETFs are prorated, and whether it possible for consumers to avoid ETFs altogether.

The companies’ responses are due by February 23, 2010.

FCC Clamps Down on Automated Dinner Interruptions

Proposed rules would increase FCC restrictions on “robocalls”

You would think marketing experts would realize that making you crawl off your couch to field an unsolicited phone solicitation – especially one delivered via prerecorded message (i.e., a “robocall”) – is a poor way to generate loyal customers. But the practice persists.

Robocalls and other forms of telephone solicitation have been such an irritant that Congress, over the years, has passed several laws to regulate them, giving both the FCC and the Federal Trade Commission (FTC) authority to adopt telemarketing regulations. The two agencies’ regulations generally track one another, but sometimes gaps appear.

The FTC recently amended its rules to tighten the robocall restrictions. The FCC now wants to come into sync with the FTC, and accordingly released a detailed Notice of Proposed Rulemaking

You might ask: Why do we need both agencies to adopt regulations? Can’t we just rely on the FTC? Well, you probably could, if things were set up differently. But as it is, the FTC’s jurisdiction to regulate telemarketing, oddly enough, is less than universal: it doesn’t cover common carriers (e.g., telephone companies or airlines) when they are “engaged in common carrier activity”. Similarly, the FTC telemarketing rule does not reach banks, federal credit unions, federal savings and loans, or non-profit organizations. The FCC’s telemarketing jurisdiction, by contrast, covers promotions by all those industries.  Moreover the FCC has jurisdiction over both interstate and intrastate telephone solicitations, while the FTC’s rules cover only interstate telemarketing.

Under the proposed the FCC’s proposed new rules:

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"Fleeting Expletives": Second Circuit, Second Time Around

Constitutional challenge to the FCC’s indecency policy is center stage in Fox’s second trip to appeals court, judges appear unsympathetic to FCC arguments

If at first you don’t succeed, try, try again. And so it was that the FCC trudged back into the U.S. Court of Appeals for the Second Circuit on January 13 to defend the “fleeting expletives” portion of its indecency regime one more time. When last the Commission fought this particular fight in this particular arena, things didn’t go so well for the agency. From what we saw, the Commission is not likely to fare any better this time around. 

Back in 2006, in the wake of Janet Jackson’s Super Bowl flash, the Commission determined that fleeting uses of “fuck” and “shit” in two live awards shows aired by Fox in 2002 and 2003 violated the prohibition on indecent broadcasts. Fox appealed the decision to the Second Circuit, which overturned the FCC on non-constitutional grounds. According to the court, the FCC failed to explain why it had chosen to abandon a longstanding policy of not penalizing the occasional “fleeting” use of expletives. As we reported here last April, the Supreme Court, having agreed to hear the FCC’s appeal of the Second Circuit ruling, reversed the Second Circuit and shipped the case back down for further consideration.

While the FCC may have been pleased to have won a temporary reprieve from the Supremes, any Commission elation must have been tempered by the grim reality that it was about to jump out of the frying pan and into the fire.

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FCC Seeks To Build A Better Website

With “Reboot.FCC.Gov”, FCC solicits public input to improve public interaction with agency

Depending on who you ask, 2010 may or may not be the start of a new decade. Depending on who answers, 2010 may or may not be the start of a new FCC. That’s because the FCC is relying on you (and you and you, the guy in the brown shoes reading this during his lunch break) to help decide on the direction in which the agency should be moving. They’ve labeled this process “Reboot.FCC.Gov” and, like all the kids are doing nowadays, they’ have not only set up a website at that domain, but also tied the whole thing together with the Blogging, and the Twittering and the Facebooking and the YouTubing (there’s a bunch of other social media connections as well, including, for some reason MySpace, in case the next big indie band wants to participate).

A more conventional format was used to launch the rebooting process on January 13: a press release (the website does contain a one minute “welcome” video from FCC Chairman Julius Genachowski).  As that release explains, the Commission is “soliciting public input on ways to improve citizen interaction with the FCC.” The Chairman elaborates on this, explaining that the goal is to “get input from all corners of the country on ways to improve usability, accessibility, and transparency across the agency.”

The project’s efforts focus on five key elements:

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Telecom Tickler, 2010 - CPNI Certifications Due By March 1

It’s that time of year again – no, not tax time (well, not quite), but rather time to file annual Customer Proprietary Network Information (CPNI) certifications with the Commission. And just to make sure that the deadline is clearly highlighted on everybody’s “to do” list, the FCC has released an “Enforcement Advisory” reminding telecommunications carriers and interconnected VoIP providers that their CPNI certifications are due by March 1, 2010 (although they can be filed any time after January 1, 2010). 

CPNI is information relating to the quantity, type, destination, location, amount of use and configuration of service provided to telecom users. While it’s the kind of data that is collected routinely by carriers in the ordinary course of their business, it is nevertheless very private information – as the FCC has recognized in Subpart U of Part 64 of its rules. That subpart requires carriers and interconnected VoIP providers to establish and maintain systems designed to ensure that subscribers’ CPNI is adequately protected. 

And since the FCC is not in a position to inspect each and every company in order to confirm compliance with the rules, the Commission has dumped that particular monkey onto the backs of the companies themselves.  Each year telecommunications carriers must certify that they have established appropriate procedures and processes to protect CPNI. The certificate must include a description of how the procedures ensure that the responding company is or is not in compliance with the CPNI rules and must include a summary of all consumer complaints about unauthorized release of CPNI. It should also explain any actions taken against data brokers. And a detail which is often overlooked: the certification must be signed by a company officer who must affirmatively state that he/she has personal knowledge that the CPNI safeguards which have been established are adequate to ensure compliance.

Who has to file?

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Bureau Says 7-Eleven Is A (Super Big Gulp!) Telecom Reseller

Enforcement Bureau throws the (phone) book at convenience store

On January 14, just beating the expiration of the statute of limitations to punish offenders, the FCC’s Enforcement Bureau issued a spate of fines and citations against companies which had failed to file Hearing Aid Compatibility (HAC) Reports.   While the Bureau’s actions to some extent targeted the usual suspects (equipment vendors and carriers), they also, perhaps unwittingly, threatened a vast new class of businesses with regulation and enforcement actions. And by doing that, the Bureau also may have started a domino effect likely to lead to the elimination of the near-ubiquitous availability of prepaid phones and phone cards.

Despite the dire (and probably unforeseen, at least by the Bureau) consequences of its action, this whole affair started from good intentions. The Commission is rightly sensitive to the needs of the hearing-impaired. Because of that, the FCC’s rules contemplate that telephone equipment manufacturers will produce, and telecommunications service providers will make available to the public, a significant stock of cellphone handsets that are compatible with hearing aid devices. No problem there. And to keep everybody honest (in a “trust but verify” mode), the Commission requires all phone manufacturers and service providers to submit HAC reports on January 15 of each year, detailing their compliance with the handset stocking rules. Since these rules came into effect a few years ago, the FCC has taken an extremely harsh and unforgiving attitude toward carriers who fail in the slightest measure to meet the requirements of the rules.  

That harsh approach was evident in the fact that, among the Bureau’s targets was Firefly Mobile Communications. Firefly is a conventional telecommunications service provider, to be sure, but it was actually exempt from complying with the substantive handset stocking rules because it sold so few of them. Even so, Firefly was not exempt from the requirement to file an HAC report, so the Bureau slapped it with a citation and threatened to impose a fine if it fails to file the report again. (A “citation” is the FCC equivalent of a cop issuing you a warning rather than a speeding ticket; for some categories of offenders, the FCC is required to first issue such a warning before it can impose an actual fine.)

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Annual National EAS Test Proposed

Concerned about uncertain real-world-scenario performance of national EAS operation, FCC proposes annual national test for all EAS participants

The FCC has proposed rules providing for an annual test of the national alert capability of the broadcast Emergency Alert System (EAS).  What’s more, all EAS participants in the country will have to tell the FCC whether they received the test, whether they retransmitted it, and if not, what went wrong.

Just about every full power radio and television station in the country is required to have an EAS decoder in place, and most are also required to have an encoder and to conduct weekly and monthly alert tests.   All tests must be recorded in the station’s log.  Not every station is fully attentive to these responsibilities, and fines for non-compliance pop up fairly frequently.

The EAS is capable of both national alerts and alerts restricted to a smaller area, such as one state.  If a national alert is received, all stations must cease normal programming and either (a) put the alert on the air or, if they can’t put it on the air, (b) shut down.  Retransmission of smaller area alerts is optional on the part of the licensee.

The FCC has never tested the national alert system, so they are starting to wonder what would happen if the President ever pushed the magic button and tried to get his voice on every station in the country.  A lot of EAS decoders are automated, and a lot of stations operate unattended all or part of the day.  Would the nationwide system really work, or would it crash with a dull thud? 

(Actually, the Commission does have an idea of what might happen. It turns out that, in 2007, some FEMA workers in Illinois accidentally triggered a national-level EAS alert. Since it was not intended to be a test, presumably the alert looked like a real alert, and therefore it should have rocketed coast-to-coast lickety-split. Oops. Apparently, it “caused some confusion to broadcasters and other communications in the Ohio Valley and beyond” and ultimately ran out of gas because of a “combination of EAS Participant intervention and equipment failure”. That hardly encourages confidence that the system will work when it’s triggered on purpose.)

Such uncertainty may soon come to an end, if the FCC has its way.

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FCC Fines Companies for Relying on Official's Informal Advice

 Next time get it in writing, says FCC

Here in Washington, regulatory agencies – the FCC is an excellent example – announce official decisions in written orders or public notices. But those official documents are just the tip of the iceberg when it comes to the nitty-gritty task of regulating. Much more agency business goes on informally, in meetings and phone calls between agency staffers and lawyers like us.

That's generally a good thing. If every little decision had to undergo the agency’s formal review processes, actions would take even longer than they do now. Besides, many regulatory decisions just don't rise to a level of importance that warrants full-dress agency procedures resulting in detailed decisions memorialized in official documents.

On the other hand, relying on informal staff advice can get people in trouble.

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Verizon Early Termination Fees In The FCC's Crosshairs

One of the things that gripes an awful lot of people is the so-called early termination fee, or ETF, which you have to pay if you try to cancel your cellphone contract before two years are up. It is usually about $200, so if you are a Verizon customer drooling to get an iPhone, you are out of luck and can’t move over to AT&T unless you are willing to pay the piper’s penalty.

There is another side of the story, of course. Cellphone companies offer handsets at subsidized prices – below what they really cost – to woo customers. If you accept the subsidy, you should at least keep buying the service for a while, so that the carrier can recoup its investment in your whiz-bang phone toy. If you prefer not to subject yourself to an ETF, you can usually do so, but then getting the phone you want will cost you more. Because the cellphone companies make the deep discount on the phones so attractive, most people go for the ETF, which is, of course, exactly what the phone companies hope to accomplish: they get their hooks into you as a customer.

So many people got stressed out about ETFs, though, that Congress finally threatened to pass a law about them. Exactly how that would have shaken out we can’t say, because the cellphone companies made a pre-emptive strike by pro-rating their ETFs. In many cases, the fee goes down a little each month and is smaller in the final few months of your contract. Congress quieted down after that, even though the ETF stays high enough to cause indigestion when you have only a month or two to go before true freedom is yours.

However, quiet rarely endures.

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Power To The Parents Re-redux

Comment deadlines set in “parental empowerment” inquiry

Last month we reported on the FCC’s Notice of Inquiry into parental empowerment. That notice has now made it into the Federal Register, which in turn establishes the comment and reply comment deadlines. If you’re moved for whatever reason to chime in on any or all of the questions posed in the notice – sample question: Is there “a minimum level of media literacy that parents, teachers, and children must have to ensure that children can participate effectively in modern society and enjoy the benefits of electronic media while avoiding the potential harms” – you have until January 25, 2010. Reply comments are due on February 22, 2010.

"That's Right, You're Not From Texas"

Unlicensed operator rejects FCC authority, FCC rejects unlicensed operator’s rejection

They think big in Texas, and they think independent in Texas, and so it should be no surprise that an FM radio operator was not impressed when the Feds arrived at his doorstep. Some FCC agents claimed that the operator – one Raymond Frank – was lacking some piece of paper or other from some agency Back East in Washington, but Mr. Frank knew better. No “pirate broadcaster” he – no, he was operating strictly within the boundaries of the Republic of Texas, and so was not subject to the laws of the Yoo-nited States or any little ol’ FCC. (Frank also argued that the FCC’s rules violate the First Amendment. But if Frank was not a U.S. Citizen – being as how he claimed Republic of Texas citizenship and all – that argument may have been a tad inconsistent, but we digress.)

Not surprisingly, the Dallas office of the FCC’s Enforcement Bureau didn’t see things that way, and whupped Mr. Frank but good with a $10,000 fine for unauthorized operation.

The most interesting aspect of the Bureau’s Forfeiture Order is the fact that the Bureau felt the need to respond, in detail, to Frank’s claim that the FCC lacks jurisdiction over radio operations in Texas. To quote the Bureau:

We also note that Texas is a “State” of the United States of America, and it and its residents are subject to the laws of the United States. According to the to the [sic] Texas Historical Commission, Texas was annexed to the United States as the 28th state on December 29, 1845; Texas seceded from the United States and joined the Confederate States of America on January 28, 1861; and Texas officially was readmitted to the Union on March 30, 1870, following the period of Reconstruction. See http://www.thc.state.tx.us/triviafun/trvgov.shtml. Because Texas is a State, Mr. Frank’s invocation of the Foreign Sovereign Immunities Act is misplaced.

Presumably the Bureau felt that, by relying for this historical review on the “Fun Facts” page of the Texas Historical Commission website, the Bureau could not be accused of any kind of Yankee Revisionism. Yee haw.

FCC Invites Comments On "Text Broadcasting" Proposal

Another step closer to mobile spam?

Back in September we wrote about a petition for declaratory ruling filed by Club Texting, Inc., which appeared to be anticipatorily seeking a Get Out Of FCC Jail Free card for itself and others engaging in “text broadcasting”.   Deadline alert!!!  The FCC has just invited the public to comment on that petition. In a public notice issued November 9, the Commission summarizes Club Texting’s petition, and then opens the door for the Great Unwashed to chip in their two cents’ worth. Comments on the proposal are due by November 30, reply comments by December 7.

Curiously, the FCC’s public notice does not provide a link to Club Texting’s petition. Such a link would certainly come in handy to anybody who might want to take the Commission up on its invitation to submit comments. Even more curiously, when we went out to the FCC’s ECFS to try to track down the petition, we couldn’t find it – even using the spiffy new ECFS interface. No problem – we tracked down a copy of the petition  and are providing the link, above, as a public service.

The Commission’s notice tersely echoes the general points advanced by Club Texting in its petition. What the notice doesn’t emphasize is that “text broadcasting” is pretty much the same as (or, as Club Texting describes it, the “functional equivalent” of) that scourge of the late 20th Century, junk faxing. (Not surprisingly, Club Texting prefers the more benign term, “fax broadcasting”.) Nor does the public notice mention that Club Texting is touting, on its website, the fact that it has over 60 million cellphone numbers that it can make available to its customers who might want to text their important messages to some, or all, of those 60,000,000 phones. The Commission probably didn’t mention that factoid because Club Texting didn’t mention it in its petition.

Anyway, if you feel moved to comment on Club Texting’s petition, you’ve got until November 30.

Power To The Parents Redux

Trouble in River City?

If you’re looking for a good example of your tax dollars being spent – spent, yes, but not necessarily being put to work – you should check out the Notice of Inquiry (NOI) issued by the Commission on October 23. Entitled “Empowering Parents and Protecting Children in an Evolving Media Landscape”, it reads like a cross between an undergraduate course in child psychology and a weekend program on “modern parenting” that might be offered at the local community center. 

While no one can fault the Good Intentions presumably underlying the NOI – after all, Looking Out For The Kids ranks right up there with apple pie, the flag and motherhood in the pantheon of unassailable motivations – the NOI is grossly flawed in numerous ways. It lacks legislative authority, raises the specter of unconstitutionality, largely duplicates an inquiry just completed by the Commission, inserts the FCC into a regulatory area which other, presumably better suited, agencies are already working, and asks questions which are unanswerable.

If this is how the Genachowski Commission plans to deploy its resources, we’d all better fasten our seatbelts – it could be a bumpy night.

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Network Neutrality: The Chairman Sets A Course

Genachowski announces plans to expand, codify Network Neutrality Principles

In a speech this morning, FCC Chairman Julius Genachowski announced his intention to initiate a proceeding looking to the adoption of new rules designed to preserve and enhance the “openness” of the Internet, in accordance with the principles of “network neutrality.” (You can read the speech here or watch it being delivered here.) While the Chairman’s support for a so-called “Fifth Principle”, prohibiting discrimination by Internet service providers, was widely anticipated, he also made the surprising announcement of a “Sixth Principle” requiring broadband Internet service providers to be transparent about their network management practices.   A Notice of Proposed Rulemaking, to be issued in the near future, will certainly precipitate a hotly contested battle over the nature of “discrimination” and “reasonable network management.” 

Fifth and Sixth Principles? What are the first Four? Back in a different Internet era (2005), the FCC took a tentative first step in addressing the issues of Network Neutrality with its Internet Policy Statement (“IPS”). That laid out four “principles” designed to “preserve and promote the open and interconnected nature of the public Internet”. Specifically, the FCC stated that consumers are entitled to:

  • access the lawful Internet content of their choice;
  • run applications and use services of their choice, subject to the needs of law enforcement;
  •  connect their choice of legal devices that do not harm the network; and 
  • competition among network providers, application and service providers, and content providers.

Two elements of the IPS helped bring us to today’s announcement.

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Coming Soon: Mobile Spam?

FCC public notice attempts to squelch Internet rumor, but recent request for declaratory order sends a different message

Responding to a rumor that has already been circulating on the Internet for five years or more, the Commission has issued a public notice which – you should probably be sitting down for this one – denies the accuracy of the rumor! It’s charming, in a kind of down-home-folksy way, that the FCC thinks that, with the issuance of a one-page notice, it may be able to Set the Record Straight, freeing countless naifs from misinformation which the Internet-fanned rumor has forced them to embrace.

According to the notice, the “rumor”, circulated “mostly by e-mail”, warns that “a nationwide directory of cell phone numbers will be made available to telemarketers, and that consumers will start receiving telemarketing calls on their cell phones.” The Commission assures us that “[t]here is no truth to this rumor”.

But as it turns out, the “rumor” may not be too far from the truth.

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FCC Reminds Video Distributors of Emergency Broadcast Obligations

ALL emergency information must be accessible to ALL, regardless of disabilities

In the midst of wildfire season in California and hurricane season on the coasts, the Commission has issued a public notice reminding stations everywhere – not just in Cali or on the coasts – of their obligation to make emergency information accessible to those with either visual or hearing impairments. As stations in the danger zones have learned from past experience, there are no exceptions to this requirement, and no excuses will be accepted. The latest public notice makes clear that this policy applies in areas well away from the zones directly affected by the emergency conditions.

The obligations in question here arise from Section 79.2 of the rules, which requires that all video distributors make “emergency information” “accessible” to those with visual or hearing disabilities (the latter by closed captioning or other visual means). “Emergency information” is defined by the Commission to mean information “about a current emergency, that is intended to further the protection of life, health, safety, and property, i.e., critical details regarding the emergency and how to respond to the emergency”.

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Meanwhile, Back At The Second Circuit . . .

Briefing schedules set for indecency remands

As we all know, last April the Supreme Court affirmed the FCC’s re-cast indecency policy on APA grounds, and sent the matter back down to the Second Circuit for further consideration. For those of you who have lost track of the case amid various summer distractions, here’s a heads up: the Second Circuit has established a briefing schedule for the remand phase. 

Fox’s brief is due September 16, along with any amici briefs supporting Fox’s position. The FCC and its friends are set to file their responsive briefs on October 28, and Fox et al. will have until November 12 to file their replies. The Court has apparently decided to hold additional oral arguments at some point after it has had a chance to review the briefs, but it won’t be announcing a schedule for the arguments until after all the paperwork has been filed. Even if the current briefing schedule doesn’t get extended for any reason (and there are never any guarantees), it’s clear that the Court won’t likely be issuing any new opinions in the case until mid-2010, at the earliest – if you figure that arguments won’t likely happen until the middle of the first quarter of 2010 (again, at the earliest) and then the Circuit takes a few months to crank out its decision.

With that schedule, the parties would not likely be asking the Supremes to take another look at it until the latter part of 2010, which in turn means that we’re not likely to see a second Supreme Court take on the matter until 2011 or later.

Meanwhile, in Philadelphia, the Third Circuit folks got a slight jump on their Second Circuit colleagues by calling for briefs in the CBS case (involving L’Affaire Janet Jackson) starting earlier this month, with the last round of reply briefs currently due toward the end of September. No word yet about plans for oral argument. While the Third Circuit’s six-week head start over the Second may result in the CBS case getting to the Supremes’ door step before the Fox case does, we’re still probably looking at 2011 as the earliest before we’ll be seeing another Supreme Court decision on the merits of the FCC’s indecency policy.

FCC Applies Novel Rule Interpretation, Levies Fine

FCC rules have the force of law. That means people who violate them are subject to a fine.

But suppose a company sells a product having a feature the rules do not plainly prohibit. Even a careful reader might not take the rules as alluding to this feature at all. The company might plausibly think its actions are perfectly okay. And, just to make it interesting, let’s suppose another part of the FCC had approved the same feature as being lawful.

Now the FCC’s enforcement arm claims the feature is a violation, and imposes a fine.

The General Mobile Radio Service (GMRS) is a category of two-way radios, usually more powerful and of better quality than the little FRS “family radios” sold everywhere. Users must hold individual licenses from the FCC. The radios must be certified by the FCC for compliance with applicable rules. One of those rules prohibits GMRS users from sending “coded messages.”

Several brands of GMRS radios come with a “voice privacy” feature that converts the speaker’s voice to gobbledygook. Any radio from any manufacturer with the same feature converts the voice back to intelligibility.

The FCC recently singled out one of these manufacturers for a $21,000 fine, claiming the radio was capable of sending what it called “coded messages.” Could the manufacturer reasonably have known in advance that the feature was unlawful?

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FCC to Inter Tech: REALLY, Keep the Paperwork Straight!

More verification, certification fines for FM transmitter marketer

We reported in February a proposed FCC fine of $7,000 against a company called Inter Tech which had failed to properly verify an FM broadcast transmitter. This is a rare offense, in part because verification is so easy: just test the product for compliance with the FCC’s technical rules, and keep certain records. In the same order, the FCC proposed to add on another $11,000 for Inter Tech’s saying it had discontinued a particular model when, in fact, the model was still on sale. We observed that Inter Tech was lucky, as the FCC could have imposed the same $7,000 fine separately for each of fifteen different models.

We spoke too soon. The FCC is back.

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Adventures in EEO-Land

Media Bureau hands out fines for re-hires, over-reliance on Internet recruitment

Following up on audits of the EEO performance of a number of broadcast licensees, the Media Bureau has dished out fines ranging from $3,000 to $12,000 to three licensees for various shortcomings. In addition to the fines, each of the three is also saddled with reporting requirements for the next three-four years – and if any of the stations happen to be sold in the meantime, the buyer will get stuck with the reporting chores. (Good luck explaining to the buyer exactly why he or she should bear that particular cross.) You can read the decisions here, here and here.      

As has been invariably the case for years, the “EEO” miscues at issue did not involve any actual, or even alleged, illegal discrimination. Rather, in each case the licensee failed to jump through various procedural hoops in just the right way. For example, one licensee failed to send out notices of vacancies to two organizations which had asked to be on its mailing list. It also neglected to “retain fully detailed documentation to support the data reported” in its annual EEO report in its public file. That’ll be $3,000, please – be sure to make the check payable to the FCC.

There’s more.

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FCC to NCE's: Ixnay on the "Cold Refreshing Beer"

The Commission has added to the lexicon of things you can’t say on the radio, if you’re a noncommercial broadcaster and you’re referring to people or companies who have provided you with underwriting support. We last alerted our readers to the issue of prohibited “advertisements” in a blog posted in March. Readers may recall that one of the terms declared verboten by the Commission then was “world famous pepperoni rolls”. This time around, the target is nothing less than (cue ominous music) . . . “cold refreshing beer”.

In a decision directed against a community college station in Auburn, New York, the Enforcement Bureau has declared that the following announcements were Too Promotional:

  • A cable company blurb which referred to “targeted advertising through specialized channels such as ESPN”
  • An announcement for a local bank which stated: “Meets all your banking needs. Visit one of our four branches in the Finger Lakes. Banking the old fashioned way.”
  • Reference to the Bank of America, which was said to “[p]rovide[ ] flexible financing for policemen, firemen, nurses, and others in the community that serve it so well."
  • And last but not least, an announcement which described Miller Beer as “cold refreshing beer”.
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Time For A New Spin On "Pay For Play"

I think broadcasters have let the record companies put them on the defensive by establishing a one-sided framework for the public discussion of the performance royalty issue. And that may be why broadcasters seem to be having trouble in the struggle with record companies over that issue.  Maybe it’s time to change that framework.

At the NABOB annual awards dinner a couple of months ago, I listened to NABOB President Jim Winston bemoan the burden that would be placed on struggling minority station owners if they had to pay the “performance royalties” being touted by the record industry. I thought to myself that the performance royalty debate has been in favor of recording artists, because the record companies have managed to cast their side as poor suffering recording artists who have supposedly been victimized by a freeloading broadcasting industry.  Artists have worked hard to create these recordings – as the argument generally goes – so why should they have to let their work be used for free by fat-cat broadcasters?

That approach, of course, misses the other side of the debate: the undeniable truth that airplay provides artists with valuable, if not vital, exposure to vast audiences, exposure that helps those artists sell records (pardon me – I mean CDs and downloads), fill concert seats, move merchandise, and establish the public images which are so crucial to their popular success. You will notice that in most music awards shows, artists give an appreciative shout-out to the radio industry in their acceptance speeches.

Broadcasters have historically provided exposure for free, just as the artists have made their recordings available to broadcasters for free. That quid pro quo arrangement has served everybody – artists, broadcasters and the listening public – well for decades. But if artists now want to change the deal by charging for the use of their recordings, that is a two-way street. Why not let broadcasters ask artists to pay for the exposure they get on the radio?

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Supremes Send CBS/Janet Jackson Back To Third Circuit

In a decision which comes as no real surprise, the Supreme Court has agreed to hear the FCC’s appeal of the 2008 decision of the U.S. Court of Appeals for the Third Circuit, which reversed the forfeiture meted out to CBS for the Janet Jackson Super Bowl incident. But having agreed to hear the appeal, the Supremes lost no time in vacating the lower court’s decision and shipping the case back down to the Third Circuit for further consideration in light of the recent decision in FCC v. Fox Television Stations, Inc.

As we have previously reported here and here, the Fox decision changes certain non-constitutional considerations relating to the FCC’s indecency policy. Since the Third Circuit’s decision was based on just such non-constitutional considerations, the Supreme Court’s remand is standard operating procedure.

The remand does set up the possibility that both Fox and CBS could return to the Supremes simultaneously. Both the Second Circuit (i.e., the Fox court) and the Third Circuit (i.e., the CBS/Janet Jackson court) will be getting their respective cases back at essentially the same time (i.e., now). Since the remaining issues are relatively straightforward, both courts might be able to deal with the remand proceedings in reasonably short order. If both courts were to issue decisions in those remands at approximately the same time, consolidated review by the Supreme Court would not be out of the question.

While both Fox and CBS/Janet Jackson involve FCC findings of “indecency”, the two cases are distinct in a number of ways. Perhaps most obviously, Fox involves mere words, while CBS/Janet Jackson involves the fleeting image of Ms. Jackson’s right breast. Consolidated consideration of both cases would provide the Supremes the opportunity to consider both the verbal and visual components of indecency regulation.

Check back to www.commlawblog.com for further developments.

After 40+ Years, "Antenna Farm" Still Undefined

Do you know what constitutes an antenna farm? 

Nobody else does, either. Except maybe the FCC. But, for reasons that aren’t exactly clear, they’re not telling.

The question came up recently when a CP applicant mistakenly thought it knew, but it didn’t, and but for a legal technicality (let’s hear it for statutes of limitations!) it would have been socked with a fine from the FCC’s Audio Division.

The recent case (which was described, in a different context, in an earlier post) involved the folks who had failed to jump through the various pre-application environmental hoops established in the Commission’s National Programmatic Agreement. One reason they relied on for not doing so: their proposed tower was to be built in an “antenna farm”, and the Commission’s rules specifically state that a proposal for a new tower in an established antenna farm is categorically excluded from environmental processing. Since the proposed site already included two existing towers reasonably close together, it seemed reasonable to conclude that that site could be deemed an “antenna farm”, thus relieving them of the environmental homework.

Wrong.

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FCC v. Fox: The Six Opinions Through The Goldberg Lens

[Blogmeister’s note: As part of our overall coverage of the on-going development of FCC indecency law and policy, we present here a nitty-gritty synopsis of the six separate opinions issued by the Supreme Court in FCC v. Fox. Veteran court-watcher and First Amendment guru Kevin Goldberg has read all 72 pages, so you don’t have to . . .]

Just because the fortune-teller got it right does not necessarily mean that we have to like it when the accurately-predicted future becomes present reality. Like when we correctly read the tea leaves in the wake of the November 4, 2008 oral arguments in FCC v. Fox Television Stations, Inc. The Supreme Court has – by the 5-4 margin we predicted (though we reversed the positions of Justices Kennedy and Souter) – overturned the earlier ruling against the Commission by the United States Court of Appeals for the Second Circuit.

The Supreme Court ruled that the FCC did not violate the Administrative Procedure Act (APA) when the Commission suddenly, and without prior warning to broadcasters, reversed 25 years of agency precedent by ruling that “fleeting expletives” broadcast on the 2002 and 2003 Billboard Music Awards violated the indecency rules.  The Court did not take any position as to whether the FCC’s application of the indecency rules violated the First Amendment.

 Our post-argument impressions on the case (which include a summary of key quotes from the oral arguments) and Harry Cole’s early thoughts on the Court's decision offer significant background.  Here’s a summary of the Court’s majority, concurring and dissenting opinions.

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FCC v. Fox - The Supreme Court Rules

First reaction to the Big Decision

[Blogmeister's note: Our crack team covered the oral argument in Fox last November, and will be providing additional coverage of the Court's decision released April 28.  The following is one commentator's view of the landscape.]

The Supreme Court has issued its long-awaited decision in FCC v. Fox Television Stations, Inc., the case involving the application of the FCC’s indecency policy to “fleeting expletives”. By a 5-4 vote, the Justices concluded that the FCC’s action was consistent with its statutory obligations under the Administrative Procedure Act. Accordingly, they reversed the contrary decision of the U.S. Court of Appeals for the Second Circuit and remanded the case back to the Second Circuit. Score one for the Commission.

While any decision favoring the Commission’s indecency policy in any way is troubling, the good news here is that the Supreme Court’s ruling changes very little on the indecency front. To the contrary, its primary effect in the indecency area is to set the stage for the next, and far more important, act in this long-running drama.

But the news is not all good. Lurking behind the high profile “celebrities talking dirty on TV” allure of the case is a major shift in a seemingly mundane legal doctrine, a shift that could affect FCC regulatory activity in all respects for years to come. So while many commentators may choose to dwell on the obvious “indecency” aspects of the ruling, the real importance of this decision lies elsewhere.

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The $175,000 Question: When Is A Computer Circuit Card Not A Computer Circuit Card?

Answer: When the FCC says it’s a TV.

The FCC has hit up a manufacturer of personal computer TV tuner cards for a $175,000 forfeiture. Why? Because the manufacturer marketed cards that have only analog and not digital tuning capability.  The Notice of Apparent Liability was issued by the full Commission, as opposed to, say, the Enforcement Bureau – a clear sign that the full FCC is still in full-tilt enforcement mode with respect to the marketing of non-compliant TV receivers. (It has been in that mode for at least a couple of years, as we have previously reported here and here, for example.)

Of course, all new TV sets must have both analog and digital tuners.  That requirement, first imposed in 2002, was phased in based on screen size. Since March 1, 2007, all TV receivers imported into or shipped or marketed within the U.S. must include DTV capability.  The rule also applies to all kinds of receiving equipment, including VCRs (who remembers VCRs?) and other devices that lack their own screen and have to plugged into the back of a TV set or other display device.

The PC card manufacturer ran through a whole host of reasonable arguments for why a computer card should not be deemed subject to the rule. It argued that consumers should have a choice of what they want to buy; and in any case, a PC card is just a computer peripheral, not a TV, and is different from a VCR in that the output can’t be plugged into the back of a TV set.  No way, the FCC said.  TV is going digital, and we are not going to tolerate anything, with or without a screen, that is used to receive and display over-the-air TV signals unless it can work with digital signals.

But even the Commission, hard-nosed though it may be, had to acknowledge that, as violations go, selling cheap PC tuner cards with no screen attached is “not as egregious” as selling, like, real TVs (“television receivers with an associated viewing screen”). So rather than lower the maximum boom ($97,500 per violation) onto the manufacturer, the Commission figured it would cushion the blow by charging a mere $25,000 per violation. But what might initially have looked like a mild spanking got ugly when the Commission decided that a separate “violation” occurred with each model marketed. Since the manufacturer had sold seven different PC card models, the bottomline line turned into a considerably heftier $175,000 – not exactly pocket change.

It took me only about five minutes on the Web today to find some analog-only PC cards still for sale.  At least one catalog displayed the consumer alert that was used before digital tuners were universally required, but that alert no longer protects the vendor.  I wonder if the FCC is also browsing the Web.

LPFM Stuck With $20K Fine for "Advertisements"

Time for NCE’s to review their underwriter announcements?

The Enforcement Bureau has come down hard – very hard – on a low power FM station for broadcasting thousands of prohibited advertisements over the course of some 14 months. Total fine specified in the Notice of Apparent Liability: a cool $20,000. Ouch! And this is an 11-watt (yes, when they say “low power”, they really mean it) station we’re talking about. Double Ouch!

The Bureau’s decision highlights the perennial problem presented by the limits on noncommercial educational (NCE) licensees. (By definition LPFM stations are NCE.) NCE licensees are prohibited from broadcasting any promotional announcements on behalf of for-profit entities at any time in exchange (in whole or in part) for any consideration of any kind. BUT they MAY broadcast announcements which identify and acknowledge non-profit and/or for-profit entities (referred to by the cognoscenti as "underwriters") who contribute to the station’s operations, monetarily or otherwise. 

The trick is telling the prohibited promo from the acceptable acknowledgement.

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Hey Jules!!!

Editors' Note: Let’s be honest. The first day on a new job usually stinks. Everything’s new and different. Everybody’s trying to weasel up to your good side. Big and Important Stuff definitely needs to get done, but right out of the box it can be hard to tell the Big and Important Stuff from the Totally Unnecessary and Possibly Counterproductive Stuff.

As a public service, we here at CommLawBlog have put together a "To Do" List for Julius Genachowski when he arrives on the Eighth Floor of the FCC. (We know he hasn’t been confirmed yet, but who really believes that that’s going to be a problem?)  

But what do we know? The Chairman-Designate would probably benefit even more from suggestions from CommLawBlog readers. We down here in the CommLawBlog bunker merely have our fingers on the pulse of the Regulated Nation; you ARE the pulse of the Regulated Nation.

We’re sure Mr. Genachowski would welcome additional input from the blogosphere for his To Do list. Check out our initial thoughts below, then post your own using the comment box at the end of our list.

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FCC Applies Over-the-Air Contest Rules to On-Line Contest

And you thought that a contest on your website couldn’t get you in trouble with the FCC? No such luck – you’ve got at least one more think coming!

As it turns out, while the FCC’s jurisdiction over broadcasters is generally limited to their over-the-air activities, a contest on a website that does not toe the line with FCC disclosure requirements for on-air contests can still raise the FCC’s ire IF on-air announcements allude to the contest and IF the station somehow ties the website to listening to the station in some way. Who knew? In a recent decision out of the Enforcement Bureau, a Los Angeles FM licensee found out the hard way.

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FCC to Manufacturers: Keep the Paperwork Straight!

On February 2 the FCC proposed two fines resulting from sloppy paperwork by manufacturers.

One concerns “verified” equipment, which makes it a rarity in FCC jurisprudence. Verification is a form of equipment authorization that does not require any filings with the FCC, and so it is not often a target of enforcement. This time, though, the FCC became interested when it checked the website of Inter Tech FM, which manufactures fifteen models of FM broadcast transmitters. (Why? We don’t know. But often these investigations start with a tip from a disgruntled competitor.) When asked, Inter Tech was unable to produce its copies of the paperwork that the verification procedure requires. It also told the FCC it had discontinued marketing a particular model, even though the model was still being promoted on the company’s website. The FCC proposed a fine of $7,000 for the verification violations. With regard to the company’s misinformation about the model on the website, the FCC proposed to fine it $11,000 for “provid[ing] material factual information that is incorrect . . . without a reasonable basis for believing that any such material factual statement is correct and not misleading” – in other words, for getting it wrong without checking the facts first.

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Don't Look Now, But You're STILL Being Watched (Update II)

Last September we reported that FCC staffers were apparently sitting in the comfort of their cubicles in the Portals, checking out station websites to determine whether stations had posted their Form 397 EEO “Broadcast Mid-Term Report” on-line. After we did some checking, though, we updated that report to advise that, contrary to what had been told to us by a staffer, Form 397 is not required to be posted on the station’s website (although a copy is required to be placed in the station’s local public inspection file). This was confirmed by a supervisory FCC official, so we’re reasonably sure that it’s correct.

What, then, do we make of an email received from an FCC staffmember on January 30, 2009, with the subject line reading “Mid-Term Report (FCC Form 397)/[licensee name omitted here for obvious reasons]” and the content of which read, in its entirety, “A review of the above-noted stations' website shows that the 2007 public file report is still posted.  Please ask the licensee to upload the 2008 report by February 3, 2009.”

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Finding the Harm in "Harmful Interference"

The concept of “harmful interference” is central to FCC spectrum policy. The FCC has never said just what the term means. Oddly, though, that might be a good thing.

Nearly every band of the radio spectrum is shared among two or more categories of users. If we think of the spectrum as being spread out horizontally, the users of each band are stacked vertically. To see how this looks, click here.

Each band has a predetermined pecking order among its users: primary, secondary, and unlicensed. The relationships among all of these turn on harmful interference. Specifically:

  • “Primary” users are protected against harmful interference from all other users.
  • “Co-primary” users – services in the same band jointly designated as primary – may not cause harmful interference to each other.
  • "Secondary” users may not cause harmful interference to primary users, and must accept harmful interference from primary users.
  • Unlicensed users may not cause harmful interference to primary or secondary users, and must accept harmful interference from everybody.

The notion of harmful interference being key to the whole enterprise, we might expect to find a crisp and objective definition in the FCC rules. But when we look, we find something else. It comes in two parts:

In the case of a radio-navigation service (like GPS) or a safety service (police, fire, distress beacons, etc.), harmful interference is anything that “endangers” its functioning.

In the case of any other licensed service, harmful interference is whatever “seriously degrades, obstructs, or repeatedly interrupts” the service.

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A New (well, sort of new) Sheriff In Town

On January 22, President Obama elevated Commissioner Michael Copps to the position of Acting Chairman of the Commission. Copps, who has been a Commissioner since 2001, will preside over the slimmed-down three-person Commission until a permanent Chairman takes over. Former Commissioner Tate left the agency in December  when her term ended, and former Chairman Martin bailed out as of Inauguration Day – leaving Acting Chairman Copps to rule the roost over remaining Commissioners Adelstein (D) and McDowell (R). No word yet on how long it may be before the Commission returns to full five-member strength (or who might be filling at least one of the two empty seats). Repeated media reports have indicated that President Obama intends to nominate Julius Genachowski – an Obama Harvard Law School chum and Chief Counsel to Former FCC Chairman Reed Hundt – to be permanent Chairman, but until the President makes a nomination and that nominee is confirmed by the Senate, Copps is The Man.

Telecom Tickler: CPNI Certifications Due By March 1

If you’re a telecommunications carrier (and FYI – we’re not just talking about POTS and cellular here – think VoIP operators, satellite operators, international resellers and others as well), the FCC wants to be sure that you don’t forget that your annual CPNI certifications are due between January 1 and March 1.  The Commission has issued a public notice reminding everyone about those certifications, and also helpfully providing a suggested template to be used. CPNI – which stands for Customer Proprietary Network Information – is information relating to the quantity, type, destination, location, amount of use and configuration of service.

CPNI is inherently private information, and the FCC’s CPNI rules are designed to protect customers’ CPNI against unauthorized access and disclosure. (While the CPNI rules have been on the books since the late 1990s, the FCC’s interest in enforcing them increased dramatically in 2007 after media disclosures of “pretexting” practices used to obtain CPNI surreptitiously. For further background on CPNI, see the May and September, 2007 issues of FHH Telecom Law.)

One measure adopted by the Commission in 2007 is the annual certification requirement. Each year, telecommunications carriers must have an officer sign and file with the Commission a compliance certificate stating that he or she has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with the rules. The carrier must provide a statement accompanying the certification explaining how its operating procedures ensure that it is or is not in compliance with the rules. Additionally, the carrier must include an explanation of any actions taken against data brokers and a summary of all customer complaints received in the past year concerning the unauthorized release of CPNI.

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Departing Martin Takes 31 Parting Shots At Cable

In what has to have been an unprecedented farewell kiss-off by any Chairman, on January 19, 2009, now-former FCC Chair Kevin Martin (who exited the Furnitureship with the inauguration of Barack Obama) appears to have caused the Enforcement Bureau to issue 28 separate notices of apparent liability (NALs) and three forfeiture orders, all directed to cable companies, seeking an aggregate of more than $500,000 in fines. (We won’t bother to link to each of the separate orders – but you can find links to them at the Enforcement Bureau’s homepage.)

Don’t check your calendars – January 19 was, indeed, Martin Luther King Day, a Federal holiday. (It’s probably a fair question to ask whether the Bureau staffers – many of them union members – got time-and-a-half for coming in on their day off.)

The fines all stem from the cable industry’s on-going conversion to digital signal distribution, which usually cannot be seen on a TV set without a cable box of some sort, for which a monthly gratuity to the cable company gets tacked on to your bill.

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New Meaning For Digital TV?

Bird flipped on the Peacock, complaints ensue

When is a finger just a finger, and when is it a potentially multi-million dollar fine? NBC may well find out soon enough.  At least 18 complaints have reportedly been lodged with the FCC for the Peacock Net’s live broadcast of the Golden Globe Awards on January 11. The gripes involve actor Mickey Rourke’s acceptance speech and, more specifically, producer Darren Aronofsky’s pantomimed response during that speech, a response which NBC dutifully broadcast (for those of you on the West Coast who got a two-second black screen, YouTube is your friend – for research only, of course).

We can’t recall a single instance in the indecency era in which a televised image of a middle finger provoked an enforcement response from the Commission. While we highly doubt that the airwaves have been completely void of such gestures over the last 30 years, the lack of any cases involving such a gesture shouldn’t be surprising: after all, the FCC’s rules define broadcast indecency as “language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities.” Does flipping the bird really fit in there? We would think not, but then again, we thought that a millisecond flash of nipple was OK and a fleeting view of an attractive woman’s buttocks might be, too . . . and the FCC disagreed. So who knows?

There’s no word yet whether the FCC will take any action at all here, but the stage has been set. Just how far will the Commission be inclined to stretch the long arm (or finger) of the law?

FCC Whacks Six Licensees for EEO-Related Violations

Four-to-five figure fines for recordkeeping, self-assessment short-falls

With the release of six notices of apparent liability (NAL) at the very tail end of 2008, the FCC has given us a glimpse of what EEO enforcement is likely to look like for the foreseeable future. And the outlook is what you might expect: continued emphasis on detailed record-keeping despite the absence of any indication that any unlawful employment discrimination has occurred.

The six decisions appear to be directed to the broadest possible range of stations, with stations in the east and west, large and small licensees, minority and non-minority ownership. One common factor that all share is the age of the alleged violations: all of the alleged recordkeeping shortfalls took place at least two years ago, with most of the data going back to 2003 or 2004.   The penalty in all cases was a combination of a fine (with amounts varying from $7,000 to $20,000) and reporting conditions.

Each of the NALs arose from the Commission’s random audit program. Each year the FCC requires that randomly-selected stations submit detailed information concerning their EEO efforts. The FCC’s review process is apparently rigorous – how else to explain the multi-year timeframe from initial submission of the EEO information to the 2008 issuance of the NALs?

There are a number of lessons to be taken from the NALs.

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Commission Un-announces Final Open Meeting of 2008

On Friday, December 12, we told you that the Commission had released the agenda for their final hurrah of 2008 (scheduled for December 18) - remember? Well, that was sooo yesterday’s news. 

Late that same day, the Commission announced that the December 18th meeting was cancelled. After the Agenda was released Thursday evening, Chairman Martin received a letter from Representative Waxman and Senator Rockefeller asking the Commission to cancel the meeting and expend the Commission’s resources on the DTV Transition. Apparently, there were items on the agenda, including the AWS-3 Auction, that had raised substantial controversy and the members of Congress did not want the Commission to be distracted from the DTV Transition. According to the FCC spokesman, after receiving the letter, Chairman Martin determined that it did “not appear that there [was] consensus to move forward and the agenda meeting has been canceled.”

The public notice indicated that the Commissioners will resolve the seven items that were on the agenda via circulation. So, just like the weather in Washington, if you don’t like what's on the FCC Agenda, wait ten minutes, and it may change…

FCC Imposes Manual Labor

Products today come with dozens of warnings that few people actually read. If the item includes digital circuitry – almost everything does, nowadays – the manual is supposed to include a warning mandated by the FCC. Digital circuits emit radio waves as by-product, and so have the potential to cause interference to radio communications. The FCC not only sets limits on these stray emissions, but also mandates specific warning text for the product’s instruction manual. The required wording first alerts the user to the possibility of interference. The warning for consumer devices (“Class B,” in FCC-speak) goes on to suggest specific ways to fix interference to radio or TV reception. The text for commercial and industrial devices (“Class A”) just warns against operating in residential areas.

Minnesota-based Multi-Tech Systems makes a device that attaches to an office phone system for routing cell-phone calls to and from people’s desktops. It is a Class A device that contains digital circuitry. Multi-Tech duly went through of the required procedures to ensure the stray emissions are within bounds. AT&T successfully tested the device to ensure compatibility with its cell network. With all needed approvals in place, Multi-Tech shipped several hundred units.

The trouble started with a complaint that the product was causing interference to other electronic equipment, particularly speakers and telephone landlines. Some people would just ask Multi-Tech to fix the problem or send a refund. But this party instead went to the FCC. After investigating, the FCC concluded the Multi-Tech product was unlikely to have caused the reported interference. Case closed.

Not quite.

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Commission Announces Final Open Meeting of 2008

The FCC has announced its official agenda for its final meeting of 2008, to be held Thursday, December 18, 2008 in Room TW-C305 at the Commission with a tentative start time of 10 a.m.  At the meeting, the Commission is currently planning to consider seven items:

  1. A spectrum auction rules/free broadband proposal
  2. Wireless license renewal
  3. DTV translator service
  4. Cable carriage rules
  5. Violations of the Commission’s DTV consumer education requirements
  6. Wireless, enhanced 911 location requirements; and
  7. Satellite Digital Audio Radio Service.

Admission is free and open to the general public.  For those who cannot make it in person, audio/video coverage of the meeting will be broadcast live with open captioning over the Internet at www.fcc.gov/realaudio.

Postcard from the Sausage Factory

With much ballyhoo, on December 9 a report from the majority (i.e., Democratic) staff of the House Committee on Energy and Commerce was released, slapping the bejeebers out of Chairman Martin. Titled “Deception and Distrust: The Federal Communications Commission under Chairman Kevin J. Martin”, the report concluded a year-long investigation. But despite a considerable amount of grandstanding on the part of the House Committee, the report itself is disappointing on a couple of levels. 

While it does conclude that Martin “withheld important and relevant data”, “manipulat[ed]” a staff report, “undermined the integrity of the staff”, engaged in “senseless waste of resources”, yadda, yadda, yadda, the report does not contain any truly blockbuster, make-your-eyes-bleed, exposés – no 8’x10’ glossies or lurid videos of Martin in flagrante delicto committing [fill in the political nightmare of your choice here]. In fact, none of the Committee’s charges even seems to rise to the level of a punishable violation of law or rule (although the Committee does suggest that further investigation into some matters may be in order).

More depressingly, though, the report tends to confirm the long-held but seldom articulated beliefs of a number of observers about the way the FCC operates, regardless of who happens to be its Chair. And the odds are that the issuance of the report is not likely to change anything.

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From the Horses' Mouths

Ordure in the Court, Part II

Elsewhere on this blog we have posted reports about the oral argument in FCC v. Fox, the first broadcast indecency case to reach the Supreme Court in 30 years. From our notes taken during the argument, we have mined the following nuggets:

  • Justice Ginsburg noted that there was “no rhyme or reason” in the FCC’s application of its indecency policy.
  • In a brief reference to the “scarcity rationale” which has historically been invoked to justify content regulation of broadcasting, one justice suggested that that rationale was not involved in the seminal Pacifica case (the 1978 Supreme Court decision which upheld the FCC’s first enforcement action under its then-new indecency policy). In response, Justice Stevens pointed out that scarcity was indeed a basis for Red Lion (the 1969 Supreme Court decision upholding the Fairness Doctrine), and Red Lion, in turn, was a basis for Pacifica. No one in the courtroom was in a position to argue with that statement, since Stevens unquestionably knows whereof he speaks: he was the author of the plurality opinion in Pacifica.
  • Speaking of the scarcity rationale, Justice Ginsburg pointed out that Pacifica arose “before the Internet”, an observation which suggests that she may believe that the explosion in available media sources over the last 10-15 years might undermine the scarcity rationale.
  • When asked by Ginsburg how the FCC determines what the “community standards” for indecency are, the Commission’s lawyer responded that the FCC applies its “collective experience”.
  • In a discussion of whether the “community” is more tolerant of certain words today than it was in 1978, Justice Scalia bemoaned the “coarsening of manners” which he apparently perceives around him – and which he apparently attributes, at least in part, to broadcast content – and indicated that the expletives under consideration are not used “in polite society”.
  • Justice Stevens, who got the indecency ball rolling with his opinion in Pacifica, asked whether the determination of whether or not a particular word or term is indecent is dependent on whether it is “hilarious” -- a proposition which Justice Scalia re-stated (probably sarcastically) to ask whether bawdy jokes might be judged not indecent “if they’re really good”. Later, Stevens also inquired of the FCC’s lawyer whether the word “dung” is indecent. (Like any good lawyer, FCC counsel answered with a solid maybe.)

Report from the Front: Team Coverage of Oral Arguments in FCC v. Fox

Three FHH attorneys who have followed the ups and downs of the FCC’s indecency policies over the years attended the Supreme Court oral argument in FCC v. Fox Television Stations, Inc., the first broadcast indecency case to reach the high court in 30 years. They filed the following reports with www.CommLawBlog.com.

 

Jeff Gee reports:

Anyone hoping to hear Justice Ginsburg drop the F-bomb in open court was sorely disappointed as the U.S. Supreme Court held oral arguments on the FCC's indecency rules. Justices and attorneys alike proceeded without a single utterance (fleeting or otherwise) of any of Carlin's famous seven dirty words. Instead, the audience was treated to debate on the finer points of the Administrative Procedure Act. What about the part where the FCC's rules violate First Amendment? Oddly enough, that might not matter too much.

As readers of our Memo to Clients may recall, the case being considered by the U.S. Supreme Court (formally titled FCC v. Fox Television Stations, Inc.) arose from a decision made by the U.S. Court of Appeals for the Second Circuit. The Second Circuit overturned the FCC's rules prohibiting "isolated" or "fleeting" indecent utterances solely on the grounds that the FCC failed to adequately justify its rules. Although the Second Circuit's decision also suggested that the FCC’s rules might not pass a First Amendment review, the Second Circuit made clear that its decision was based solely on administrative law and not constitutional law. As a result, the issue before the Supreme Court technically was not whether the FCC's rules are constitutional or even workable. Rather, the issue before the Court was whether the FCC sufficiently followed the rules applicable to Federal agencies as they make policy.

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Muy Caliente: Payola Probe Turns Up Heat On Spanish Radio

If you thought that the departure of Elliott Spitzer from the public scene might have put out the FCC’s fire for enforcement of the payola rules, think again. That fire is still blazing. In recent days the Enforcement Bureau has sent out letters of inquiry to a number of Spanish-language radio stations demanding responses concerning allegations of payola.

The claims arise from a lawsuit filed in Los Angeles two years ago. The plaintiff there, one Daniel Mireles, claims that he was wrongfully discharged from his position as Vice President of Promotions at Univision Music. (As always, the pivotal role of the “disgruntled former employee” should never be underestimated.) According to his complaint, Mireles was instructed by management-level executives of Univision and Fonovisa (a record label owned by Univision) to make “cash payments to the program directors and others at radio stations in order to increase the airplay of Fonovisa’s records”. While Mireles alleges that he resisted those instructions initially (apparently he had been involved in a payola investigation in the 1990s and was understandably gun-shy about going through the meat grinder again), he acknowledges that, between February-June, 2006, he was given some $720,000 to pay to “individuals at radio stations”. The goal was apparently to “get Fonovisa’s records played more frequently on the radio”.

Mireles claims that, in drawing up his list of “individuals at radio stations”, he spoke with people at “approximately fifty or more” stations. He allegedly made deals to make payments ranging from $3,000-$10,000 per month.

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FCC Whacks Cable TV Operators For Shifting Programming to Switched Digital Video Platforms