Are Deferred Radio Renewals Headed for Hearings?

Audio Division may be considering designating some renewal applications for hearing, but practical considerations could, and should, make it think twice. 

Last February my colleague Howard Weiss reported on a decision by the Audio Division that boded ill for radio stations that had been off the air (or operating with inadequate power) for too much of the preceding license term. Faced with a renewal application in which the station had been off the air for approximately one-half of the term, the Division granted the station only a two-year “short term” renewal, instead of the standard eight-year term.

 That decision hinted that more stringent actions might be taken in some situations. And now we hear rumblings that the Division is indeed thinking seriously about putting license renewal applicants who were off the air for more than half their license terms into hearings to determine whether to renew or cancel their licenses.

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Looking for a Way Around a Statute of Limitations?

Video Division forfeiture order shows flexibility, but not necessarily in a good way

One thing you can say about the FCC: If they think they’ve caught a licensee in a violation, they can be persistent in their efforts to impose penalties for that violation. Whether those efforts are entirely consistent with the law is another question entirely.

With respect to any fine it issues, the Commission must consider the relevant statute of limitations. FCC forfeitures are subject to two separate such statutes. First, under Section 503 of the Communications Act, it can levy forfeitures for actions going back to the beginning of the current license term or one year, whichever is earlier. 

Once the Commission has issued its formal “forfeiture order”, a licensee can simply ignore that order. If the Commission wants to collect the fine in the face of such licensee inaction, it must convince the Department of Justice to sue the target licensee in federal district court. But a second, separate, statute (28 U.S.C. § 2462) says that law suits to enforce penalties must be started within five years of “the date the claim first accrued”.  

A recent forfeiture order reflects the Video Division’s awareness of that latter limit and at least one way the Division has devised to try to sidestep it.

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Update: FCC Re-Whacks TV Max

Despite extremely harsh assessment of TV Max claims, Commission sticks with its original multi-million dollar fine.

If you’ve been wondering whatever happened to TV Max, wonder no more. As you may recall from our post here last summer, TV Max is the MVPD in the Houston area that – in the FCC’s view – broke the television carriage rules by retransmitting over-the-air stations without getting their permission to do so. If that doesn’t ring a bell, how about $2.25 million, which is the amount of the fine the Commission proposed to dump on TV Max in a Notice of Apparent Liability for Forfeiture and Order (NAL).

As is customary, TV Max was given an opportunity to plead its case in response to the NAL, or at least argue that the forfeiture amount should be reduced. It did so, and  after giving TV Max’s the usual compassionate consideration you might expect, the Commission has now reaffirmed the $2.25 mil in a harsh Forfeiture Order.

The only real surprise here is that the Commission didn’t hammer TV Max for even more. For at least a couple of reasons.

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Oh, the Irony: Parking Meter Company Fined for Poor Timing

Although its wireless parking meters were FCC compliant, the company marketed first and certified only afterward.

IPS Group, Inc. (motto: “Smarter parking for smart cities”), manufactures wireless parking meters. (The wireless feature enables credit card authorization, among other functions.) Like most small wireless devices, the meters are subject to detailed FCC technical rules and require certification for compliance with those rules.

The IPS meters complied with the technical rules and were duly certified. But ironically (since the purpose of its products is keeping careful track of time), there was a problem with IPS’s timing.

The FCC rules specify that devices requiring certification must have completed the FCC’s certification procedure before the devices are marketed. For FCC purposes, “marketing” includes “sale or lease, or offering for sale or lease, including advertising for sale or lease, or importation, shipment, or distribution for the purpose of selling or leasing or offering for sale or lease.” IPS had its meters certified only after, not before, undertaking some of these activities.

The slip-up resulted in a consent decree that cost IPS a $14,000 civil fine and some administrative headaches.

We hope other manufacturers will take the case as a warning: make sure the marketing people and the compliance people stay in touch and work from the same calendar.

There is another warning here as well: the FCC knew about the violation because a competitor of IPS’s turned them in. This is how the FCC learns about many, perhaps most, equipment violations. If you have a competitor, the FCC has a free-lance enforcement agent watching you.

Supreme Court Lets Red Lion Live

The hunt for Red Lion goes on.

The Supreme Court has declined to review the latest case that offered the Court the opportunity to declare its 1969 Red Lion decision – and, more importantly, the spectrum scarcity rationale on which it was based – no longer viable. As a result, broadcasters will continue to bear the second-class First Amendment status to which they have been officially subjected for nearly 50 years.

That status was confirmed by the Supreme Court in its 1969 decision in Red Lion Broadcasting Co. v. FCC. The Court there upheld the constitutionality of the Fairness Doctrine, an FCC-crafted policy (abandoned decades ago) that unquestionably would have been unconstitutional if applied to, e.g., print media. The Court’s rationale? Spectrum is scarce, and more people want it than can have it, so the government can regulate it in ways not permitted with respect to other, supposedly less scarce, media.

Minority Television Project (MTP), licensee of Station KMTP-TV in San Francisco, challenged the continuing validity of that notion. But the Supremes declined to take the bait. As is customary, no reason was given.

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FCC to Chinese Jammer Company: We're Taking Yuan!

Besides shipping illegal jammers to U.S. buyers, the vendor falsely claimed its products had FCC approval.

The FCC has long gone after companies that import illegal electronic products, like jammers. Now it is going after a source overseas.

A document lengthily titled “Notice of Apparent Liability for Forfeiture and Order Illegal Marketing of Signal Jamming Devices” proposes to assess a fine of $34.9 million, which adds up to a couple of billion yuan (元2,180,220,006.23, to be precise) against the Chinese company C.T.S. Technology Co., Limited for marketing jammers in the United States. The FCC knows the company did this because FCC personnel successfully ordered ten such devices, giving U.S. billing addresses and taking delivery in the United States. The ten devices they ordered were only a drop in the bucket: C.T.S. advertised a total of 285 different jammers. Adding insult to injury, C.T.S. promoted some products as having been approved by the FCC, where in fact the FCC does not authorize any jammers for commercial sales.

The $34.9 million number represents the maximum penalty for a multi-day marketing violation, which is $122,500, multiplied by the 285 models offered for sale.

Impressive, but possibly only symbolic, because collection may be difficult. If the target of a fine chooses not to pay – a result we suspect to be more than likely here – the FCC can ordinarily try to collect by suing the offender in federal district court. But the court’s jurisdiction may not reach into China. There is a treaty called the Hague Service Convention that may help, but we’re guessing its implementation might be slow and uncertain.

We also can’t help questioning the extent to which C.T.S. actually violated the law.

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Serial Petitioner Sustains Fourteenth Loss

The FCC recounts its struggles to understand the petition before denying it.

You have to admire somebody who just won’t quit. No matter what.

Like someone who applied for FCC licenses back in 2000, was turned down, and has devoted unceasing efforts ever since to alter that outcome. After the FCC had ruled against him eleven separate times on those same licenses, it forbade him from asking again without first getting its permission. The applicant sought reconsideration of that do-not-file order, lost at the Wireless Telecommunications Bureau, took the same request up to the full FCC, and lost again. See a summary here.

The individual filed to challenge that last FCC decision, and has now received ruling #14 against him. Calling his last filing “not a model of clarity,” the FCC had trouble deciding whether the petitioner had further challenged the do-not-file order – possibly permissible under the do-not-file order – or instead was trying, again, to get the underlying licensing issues reconsidered – in which case the do-not-file order barred the filing. The FCC considerately construed the request in the light most favorable to the petitioner – and then denied it anyway on multiple grounds, including a lack of any timely new facts or arguments.

No doubt the FCC staff hopes the matter will now go away. It did its best in the most recent order, advising the applicant in no uncertain terms that “he should not expect further administrative review of the sanction,” and saying not once, but twice, that the “proceeding is now terminated.”

That may be wishful thinking. The petitioner surely must realize that any further efforts would have only a scant chance of success. But if past is prologue, that may not make much of a difference. The previous 13 situations presumably looked much like this one. We shall see if the applicant sees things the same way.

Foreign Fake Phones Fetch Forfeiture Forewarning

No fine, yet, but the company must answer questions and provide documents on hundreds of products – if the company is still around.

Counterfeit Rolexes, sure. Or Coach bags. But cell phones? Blackberrys? Really?

Really. Consumer electronics is among the biggest categories of counterfeit imports. (Although that still doesn’t explain the Blackberrys.)

The Department of Homeland Security, which includes Customs and Border Protection, asked the FCC to check on some suspect Samsung Galaxy and Blackberry devices being imported and marketed by a California company. All cell phones, along with many other electronic devices, must be labeled with an “FCC ID” number specific to the device. The numbers, which evidence compliance with FCC technical rules, are easy to check on this page of the FCC website.

Here, the numbers on the Samsung phones turned out to be valid Samsung numbers – but the devices bearing the numbers didn’t match up with the specs tied to those numbers in the FCC’s database. Samsung took a look and confirmed they had neither manufactured the devices nor authorized the labeling. The Blackberrys didn’t even make it that far: they bore two different, plausible-looking numbers, neither of which was valid for anything.

We will pause here to wonder why a counterfeiter bright enough to know about FCC ID numbers did not bother to use the right numbers for the particular phones he was counterfeiting.

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Here Come The Political File Complaints!

Easy online access to TV stations’ political files leads to charges of shortcomings.

Two years ago, when TV stations were first required to post their local public inspection files online, a number of observers anticipated that the ubiquitous availability of the now-misnamed “local” files would lead to an influx of complaints from non-local parties enjoying easy Internet access to once distant files.

The complaints have started.

In one of the first – if not the first – instance, two Washington, D.C.-based public interest firms have filed complaints against a total of 11 TV stations. The complainants – the Sunlight Foundation and the Campaign Legal Center – base their charges entirely on political advertising materials obtained from the stations’ online public files. The essential claim running through all the complaints is that the target stations failed to include various bits and pieces of legally-required information.Following up on the complaints, the Commission has sent letters of inquiry (with Chairman Wheeler’s blessing) to the targeted stations.

First, let’s focus on the disclosure information that the complainants allege to be missing. Section 315(e)(1) of the Communications Act requires broadcasters to maintain (and make available for public inspection) certain information with respect to any request to purchase airtime when the request is either (a) made on behalf of a legally-qualified candidate for public office or (b) “communicates a message relating to any political matter of national importance”. That latter provision includes messages concerning a legally qualified candidate, any election to federal office, or a “national legislative issue of public importance”.

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FCC Gives Robocallers 2.9 Million Reasons to Lawyer Up Ahead of Time

Ignore the FCC’s warnings at your financial peril.

Telemarketing is a fact of modern life, mainly because it can be a very efficient and effective way to communicate a message (commercial, political, etc.) to a huge audience. But that doesn’t mean that the audience necessarily likes to receive telemarketed messages: many, perhaps most, consumers don’t. That’s probably even truer when it comes to “robocalls” (i.e., calls that are dialed automatically or play prerecorded messages), a type of unsolicited marketing that involves no actual human interaction, at least on the robocaller’s end. And it’s probably truer still when the robocall is directed to a cell phone or mobile device where the recipient can end up paying for the minutes.

Responding to public sentiment more than two decades ago, Congress (in the Telephone Consumer Protection Act (TCPA)) banned the use of automatic calling (both live and prerecorded) to mobile devices except in emergency situations or when the company has the express written consent of the recipient of the call. In contrast to landline numbers, mobile phone subscribers don’t have to put their numbers on the Government’s Do-Not-Call list to get this protection. (See our earlier post and this FCC Advisory that provide details on some of the TCPA’s requirements.)

Charged with enforcing the TCPA’s proscriptions, the FCC has dogged TCPA violators aggressively and expensively. Just ask Dialing Services, LLC, a robocaller that, according to the FCC, made almost 200 unsolicited robocalls to cell phones. (Actually, it made more than 4,700,000 such calls – but is being penalized for only about 200 of the most recent. Read on for more about that.) And for those 200 calls, it’s being fined nearly $3 million.

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FCC Whacks Cell Phone Vigilante $48,000 for Jammer Use

The defendant had sought to keep other drivers from talking on their phones.

Cell phone jammers are illegal, and can draw large fines from the FCC, but people keep using them anyway: to keep workplace employees off the phone; to limit calls to and from a cosmetology school or sheriff’s office; or for peace and quiet on the bus.

Today’s offender, one Jason R. Humphreys, drove his daily commute along Interstate 4 between Seffner and Tampa, Florida with a jammer concealed behind the seat cover of the passenger seat. His reason? To keep people from talking on their cell phones while driving. But his chosen method not only blocked drivers’ calls – including those to 911 – but also calls by their passengers, people on nearby buses, and everybody else in range of his device.

When a local cell company reported receiving interference, the FCC’s Tampa office swung into action. Tracking down interference from a moving car is a lot tougher than finding one that stays still, but Mr. Humphreys’s signal was strong enough to locate – and indeed, was strong enough to shut down the sheriff’s deputies’ radios as they approached his SUV. When the FCC later tested the jammer, they found it clobbered not only cell phone frequencies, but many others as well, including some of those used for communications among first responders.

The FCC has tentatively found that Mr. Humphreys violated three separate rules: unauthorized operation of a radio transmitter, use of an illegal device, and intentionally causing interference. The base fines for these offenses are $10,000, $5,000, and $7,000, respectively. The FCC has discretion to raise them up to $16,000, and did so for each of the three violations, for a total of $48,000. The FCC could have, but did not, assess these amounts per day of a continuing violation, up to $112,500 for each violation. Still, unless Mr. Humphreys has a lot more resources than most of us, shelling out that $48,000 is going to put a dent in his spending plans.

We entirely understand Mr. Humphreys’ urge to take matters into his own hands; we likewise feel helpless and frustrated at drivers’ paying more attention to their cell phone conversations than to the traffic. But even so, a jammer can do more harm than good. And it gets very expensive, if the FCC tracks you down.

Another Big Audio Manufacturer Makes Another Big Settlement

Peavey Electronics ponies up $225,000 for digital device violations.

Are there no music lovers at the FCC?

Perhaps not in the Enforcement Bureau, which over the last few years has singled out audio and music companies for large fines relating to the FCC’s digital device rules. Those rules require manufacturers of equipment having digital circuitry – that’s pretty much everything, these days – to test stray radio-frequency emissions for compliance with FCC limits. The manufacturer (or importer) must also place specified warnings in the instruction manual and, for consumer equipment, apply certain labels and provide additional paperwork.

The last few years have seen substantial penalties and settlements against audio manufacturers for violating these rules: Rane ($61,500); guitar-maker Fender ($265,000); American Music and Sound ($72,000); PreSonus ($125,000) and the biggest fine of all, levied against Behringer ($1,000,000).

Most recently in the crosshairs is Peavey Electronics Corporation, which is handing over $225,000 to settle charges that it violated the digital device rules. (We take a personal interest in this one; our own Blogmeister has long used Peavey gear, pictured above in the CommLawBlog bunker sound studio.)

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"There Is a Warning on that One, OK?"

SCBA exec reportedly warns SoCal stations of charcoal spot containing EAS tones.

"The warning that I've received, you may take it with however many grains of salt you wish, is that the brown acid that is circulating around us is not specifically too good. It's suggested that you do stay away from that. Of course, it's your own trip, so be my guest, but please be advised that there is a warning on that one, OK?"

Readers of a certain age may recognize those as the words of Chip Monck from the stage at Woodstock. We feel kind of like Mr. Monck when we note the following.

The NAB has passed along to us a report in NTS MediaOnline Today that the Southern California Broadcasters Association has advised its members that a new radio commercial for Kingsford Charcoal appears to include EAS (or at least EAS-like) tones the transmission of which could violate FCC rules. According to the report – which you are now getting, let’s see, one, two, um, at best third-, maybe fourth-hand – Kingsford’s ad agency is supposedly cutting a new spot for Southern California stations, but the original, questionable, spot may be circulating, and may possibly already be on-the-air, in other markets.

Ordinarily, we might leave this kind of heads-up to others. But in view of the FCC’s recent aggressive enforcement of the prohibition against transmitting EAS tones in non-emergency situations – enforcement about which we have reported (here and here) – we figure it makes sense to pass this one along.

So with the same caveats that accompanied the brown acid alert, please be advised that there’s a warning on a Kingsford Charcoal radio spot, OK?

This Should Get Your Attention II: Nearly $2 Million in Fines to Three Cable Companies for Fake EAS Attention Signals

NBCUniversal, Viacom and ESPN whacked for “Olympus Has Fallen” spot.

Last November we reported on a Commission crack-down on the broadcast of EAS (or EAS-like) tones in non-emergency situations. Heads up: the Commission is still cracking down – not only on broadcasters, but also on cable networks.

If you don’t believe us, just ask your friends at NBCUniversal, or Viacom, or ESPN. They are all looking down the wrong end of a Notice of Apparent Liability doling out a total of nearly $2 million dollars in fines for the transmission of EAS attention signals in non-emergency situations. Q.E.D.

The circumstances here track last November’s: a spot produced by an advertiser happened to contain EAS-like sounds. It didn’t help that the spot also included images of terrorists and violence and visual text reading “THIS IS NOT A TEST” and “THIS IS NOT A DRILL”. Sure, in the context of this particular ad – for the action-adventure flick “Olympus Has Fallen” – that kind of excitement might seem normal and to-be-expected, but everyone agreed that (a) the tones included in the spot either were EAS tones or sounded a lot like them and (b) there was no emergency. And that’s all that matters.

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FCC Rejects (Again!) FiberTower's Effort to Keep Auctioned Licenses

The FCC finds FiberTower’s arguments unpersuasive because (according to the FCC) they’ve already been addressed.

FiberTower loses again . . . again. The FCC has yet again rejected FiberTower’s ongoing efforts to reclaim 698 licenses previously held by the company in the 24 GHz and 39 GHz auctioned fixed microwave bands.

We’ve documented FiberTower’s predicament in the past, so we won’t rehash it in full detail, but here’s a quick recap: the FCC canceled FiberTower’s licenses for failure to construct sufficient facilities pursuant to the FCC’s license renewal standards, and the spectrum corresponding to those license will likely not be put to good use in the foreseeable future. (Some of us have argued elsewhere that the problem is not with the licensee, or even the renewal standards, but with the basic concept of auctioning spectrum for communications between fixed points.)

Unfortunately, not much has changed after the FCC’s latest action: an Order on Reconsideration rejecting FiberTower’s petition for reconsideration of the FCC’s prior decision rejecting FiberTower’s application for review.

In it most recent reconsideration petition, FiberTower argued that the FCC had gotten its decision wrong and attempted to present (what it thought was) new information in support of that argument. FiberTower even submitted several supporting “supplements” after filing its petition. The FCC was not persuaded, denying the petition both on the merits and for various procedural shortcomings.

What procedural shortcomings, you ask?

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Grass Getting Greener for Marijuana Advertising?

Reflecting possible relaxation of federal enforcement policy, a memo from Department of Treasury office to financial institutions spells out “due diligence” steps to take in dealing with pot-related businesses; possible road map for marijuana advertising?

As legalized marijuana sale and use spreads across the country, there may be some good news for broadcasters. Two recent announcements by federal agencies suggest possible relaxation of the federal government’s previously stern attitude toward pot. That could encourage some broadcasters who have thus far sat on the sidelines, declining weed-related advertising, to reconsider.

But heads up – the recent announcements do not directly address the issue of marijuana advertising, and they stop short of giving it the green light.

The legal status of marijuana in American society is actively evolving. While the Feds continue to treat it as a Schedule I drug under the Controlled Substances Act – and, therefore, among the worst of the worst drugs – nearly half the states have permitted the sale of marijuana for medical uses.  And more recently, Colorado and Washington have legalized it for recreational use. 

The potential dollar value of the burgeoning marijuana industry is huge. Colorado is reportedly projecting more than $578 million in combined wholesale and retail grass sales just this year, and some have projected nationwide sales of pot to reach $2.3 billion in the same time period (with combined recreational and medical sales). With those kinds of numbers, the advertising dollars likely to be thrown off should be equally impressive.

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OSHA to Tower Industry: Protect Your Workers

With 17 preventable deaths in the last 14 months, regulators send a message to everybody involved with tower work.

A great many communications operations  – broadcasters, telecom, cable, public safety – utilize towers in some capacities. So it caught our attention when our friends at Radio World reported on an open letter released recently by David Michaels, Ph.D., MHP, addressed to “Dear Communication Tower Industry Employer”. The letter highlights an important area of regulation for anybody responsible for a tower. (You may know Dr. Michaels better as the Head Honcho -- technically correct title: Deputy Secretary for Occupational Safety and Health in the Department of Labor -- at the Occupational Safety and Health Administration (OSHA).)

The gist of the letter: There has been a rash of fatal accidents involving tower workers. Thirteen deaths in 2013, four more reported already in 2014.

And, according to Michaels, all of those deaths were preventable.

Aggravating that already tragic report is OSHA’s conclusion that a “high proportion” of the deaths occurred because of a “lack of fall protection” – either inadequate protection or failure to ensure that tower workers are using the available protection properly – for which the workers’ employers are responsible.

So Michaels is using his open letter to remind employers, in no uncertain terms, of their “responsibility to prevent workers from being injured or killed while working on communication towers”. Who is the target audience? Not only the company that hires the workers, but also tower owners and “other responsible parties in the contracting chain”.

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FCC Heavies Up on Fine for Multiple Sponsorship ID Violations

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

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

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

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

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

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

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Bulbs Behind Bars III: More Lighting Fixtures Mess Up Mobile Data Service

Manufacturer had warned that office building lights might generate excessive radio noise.

As an environmentally responsible citizen, you probably know more than you want to about light bulbs: incandescents, fluorescents, compact fluorescents, LEDs, and plenty of variations on each. You might have sympathy for the people who handle commercial lighting, who have to worry about all of these types, and many more – and who have to worry about the FCC as well.

Last year we reported on two cases, this one and this one, about FCC actions against users of commercial lighting that caused interference to cell 4G data service. In both cases, so far as we can tell, the fixtures were conventional fluorescents that produced radio noise unintentionally.

The FCC has now presented us with a variation on the theme. The fixtures here – “fluorescent lighting electronic ballasts” – are located in a large office building on South Figueroa in downtown Los Angeles. They’re a specific kind that generate radio-frequency energy on purpose. Ideally the radio waves would stay trapped inside the device, but in practice some always leak out. Unlike most of the fixtures in our kitchens at home, this type is subject to specific FCC technical rules that limit the strength of escaping radio-frequency emissions. At 4G frequencies (and most other frequencies as well), the permitted levels are harmlessly low.

This time, though, the levels were high enough to cause interference to a nearby Verizon Wireless 700 MHz LTE cell site.

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Not-Quite-Operating Station Gets Not-Quite-Renewed

Audio Division announces use-it-or-lose-some-of-it renewal policy.

If you’ve got a license to operate a radio station, you’d better have that station up and running and you’d better keep it that way. That’s the none-too-subtle message in an Audio Division decision imposing a “short-term” renewali.e., a two-year license term instead of the customary eight-year term – on a Texas FM licensee whose station was silent for much of its abbreviated four-year existence. The decision is a clear warning to licensees who fail to operate their stations for extended periods.

The station in question was initially licensed in mid-August, 2009. By March 1, 2011 it was off the air because (according to the licensee) of interference problems. It returned to operation 364 days later, but for only four weeks. Then it was off the air again – still more interference problems of some sort, plus something about tower availability. It came back on 358 days later, less than two weeks before its license renewal application was due. So of the 32 or so months during which the station had been licensed up to that point, it had been off-the-air for more than 19.

Of course, the station’s failure to operate even for that much time was not illegal. To the contrary, the licensee had expressly requested – and been granted – authority to stay silent. And the Communications Act does not prohibit periods of non-operation of 11+ months. (The magic number under the Act? According to Section 312(g), the license of a station which fails to operate for a consecutive 12-month period automatically expires at the end of that period.)

So what’s the Division’s problem anyway?

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Telecom Tickler 2014 - CPNI Certifications Due By March 3

It’s that time of year again – time for our annual reminder to all telecommunications carriers and interconnected VoIP providers that your CPNI certifications are due by March 3, 2014. While the Enforcement Bureau has announced the deadline as March 1, it appears not to have noticed that in 2014, March 1 is a Saturday. Thanks to our old friend Section 1.4(j) of the FCC's rules, when a filing deadline falls on a holiday -- and the rules do indeed specifically confirm that Saturdays are "holidays" -- the deadline rolls over to the next business day, which in this case will be Monday, March 3.

As described by the Enforcement Bureau, CPNI – Customer Proprietary Network Information to the uninitiated – includes “some of the most sensitive personal information that carriers have about their customers as a result of their business relationship”. Think phone numbers of calls made or received, or the frequency or duration of calls, etc. . . . basically the same stuff the NSA has apparently been collecting for years. While the NSA is not required to file CPNI certifications with the FCC, telecom carriers aren’t so lucky.

The Bureau has issued a convenient “Enforcement Advisory” to remind one and all of the fast-approaching March 3 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. The only noteworthy change from last year: the potential per-violation fine has risen to $160,000 (from last year’s $150,000), and the maximum potential fine for a continuing violation has been similarly jacked up, to $1,575,000 (from last year’s $1,500,000).

As those potential fines indicate, the Commission takes this reporting requirement very seriously. Historically it has doled out five-digit fines to non-compliant carriers. In fact, the FCC’s zeal is such that, in many instances, it has initiated forfeiture proceedings even against carriers who, as it turned out, had fully complied with the rules.

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Deadline for Hearing Aid Compatibility Status Reports Looms

Form 655’s are due January 15, 2014.

The FCC’s Enforcement Bureau has reminded wireless service providers – including resellers – that their hearing aid compatibility (HAC) reports (Form 655) are due to be filed by January 15, 2014. Since failure to file can lead to costly fines – starting at $6K per violation – it’s a good idea to get those reports in on time.

As a component of the FCC’s effort to assure that folks with hearing loss are afforded the safety and convenience benefits of wireless telephony, wireless service providers and handset manufacturers are subject to certain requirements: a minimum number of hearing aid-compatible handset models must be offered and/or a minimum percentage of all their models must be hearing aid-compatible, depending on a complex formula. Failure to meet the minimum requirements can net you a $15,000 penalty per month for each handset you’re short. (Hearing aid compatibility is rated on numerical scales that reflect how well the handset couples to hearing aids with a minimum of buzzing or other interference to the hearing aids.)

To help the FCC police compliance with that requirement, wireless service providers and manufacturers must submit annual status reports demonstrating (at least ideally) that they are meeting the minimum. Reports from wireless providers are due in January; manufacturers’ reports are due in July.

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Fine Print Not Fine Enough: Another Audio Company Settles with the FCC

Alleged violations involving labels and text in instruction manuals prove costly.

No doubt the FCC staff has its share of music lovers. But they still keep audio-equipment manufacturers on a short leash.

The biggest FCC fine in recent memory for an equipment violation – an even $1 million – came down against a company that marketed digital audio devices. Another company that distributes professional audio equipment settled with the FCC for $125,000. Still another company that makes professional gear settled for $72,000. The iconic guitar-maker Fender agreed to pay an impressive $265,000.

Now yet another professional audio company called Rane, which supplies both DJs and contractors, has agreed to hand over $61,500 because some of its gear (and the associated instruction manuals) did not contain certain fine print disclosures required by the FCC.

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Noncommercial Stations Out West Back to Being Noncommercial . . . For Now

Ninth Circuit en banc reverses 2012 panel decision, restores prohibition against “issue advertising” on NCE stations.

We all know that noncommercial (NCE) broadcasting stations are just that – NONcommercial.  Section 399b of the Communications Act forbids them from accepting advertising on behalf of for-profit operations; it also forbids advertising both for political candidates and for expressing the advertiser’s views on any matter of public importance. (The difference between the latter two? Think “Vote for John Smith” vs. “America’s farmers are its backbone”.)

As we reported back in 2012, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit tossed those last two prohibitions (i.e., the ones against political and issue advertising).

That wasn’t the end of the matter. As we thought it might, the FCC asked the Ninth Circuit en banc to take another look at the case. And now the 11-judge court sitting en banc has restored (by an 8-3 vote) the prohibitions against political and issue advertising

But there’s reason to believe that the case may not be over yet.

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The 13th is Apparently NOT the Charm: FCC Turns Down Serial Petitioner Yet Again

"Mother May I" follow-up: FCC affirms requirement for approval before further filings.

Perhaps you remember the individual who saw the FCC turn down his same applications 11 separate times over the last 13 years or so. In 2011 (in connection with Rejection Number 11), an exasperated FCC took the unusual step of forbidding the applicant from filing again on this matter, unless he first obtained prior approval from the Wireless Telecommunications Bureau. (After giving the applicant a chance to respond, the FCC confirmed the prior-approval requirement.)

The applicant petitioned for reconsideration of the prior-approval requirement. After pausing to think about whether the requirement itself barred such a petition, the Bureau decided it did not. But then, citing a rule permitting the dismissal of reconsideration petitions that “plainly do not warrant consideration,” the Bureau tossed the petition anyway in a terse order that lacked a detailed response to any of the petitioner’s points.

Perhaps you thought that would be the end of it.

Perhaps you underestimate the tenacity of the human spirit.

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Indecency with a Spanish Accent?

Consent decree with Liberman Broadcasting allows FCC to avoid having to spell out how indecency policies apply to Spanish-language programming.

Something – it’s hard to say exactly what – recently occurred on the indecency front.  I learned about it first at the Impact Awards ceremony presented by the National Hispanic Media Coalition (NHMC).  NHMC President/CEO Alex Nogales announced excitedly that Commissioner Jessica Rosenworcel (who was being honored that night) had brought “good news” about a matter in which NHMC was involved.  The news: the FCC had entered into a consent decree with Liberman Broadcasting to resolve a complaint, filed by NHMC (along with the Gay & Lesbian Alliance Against Defamation (GLAAD)), targeting the Spanish-language TV talk show “José Luis Sin Censura” (translation: “José Luis Uncensored”).  Liberman’s Los Angeles-area TV station had broadcast the Luis show, complete with images and language that NHMC and GLAAD thought were indecent.  (It stopping airing the show in 2012.)

I wrote about the complaint when it was filed back in 2011.  NHMC and GLAAD alleged the repeated use of sexually-oriented terms such as “pinche” and “culero”, along with anti-gay epithets (“maricón”, “joto”, “puñal”) and anti-Latino slurs (e.g., “mojado”).  They also suggested that the FCC might be applying different indecency standards – or at least different enforcement policies – against Spanish-language programming as opposed to the English-language equivalent.  (That last point is one that I had been asked to address by Billboard in a 2006 article – demonstrating that the NHMC/GLAAD concerns were neither new nor unique to them.)

So what did the FCC do to Liberman?

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FCC to Telemarketers: Get It In Writing!

New FCC rules requiring express written consent now in effect

If you’re a for-profit company that engages in or relies on telemarketing, BEWARE! Rule revisions adopted by the FCC nearly two years ago have recently taken effect. Those revisions, adopted pursuant to the Telephone Consumer Protection Act (TCPA) impose significantly tighter restrictions on certain telemarketing activities. Since the number of potentially expensive TCPA-based law suits targeting telemarketers continues to grow, everyone involved in such activities should pay close attention to the revised requirements.

The TCPA, enacted more than two decades ago, is Congress’s effort to protect consumers from unsolicited telephone and fax advertising. The particular TCPA-based rules at issue here involve: (1) autodialed or pre-recorded telemarketing calls to cell phones; and (2) telemarketing calls, to any residential line, using an artificial or prerecorded voice. Historically, both types of call have been permitted under certain limited circumstances. The new rules tighten up those limited circumstances considerably.

First things first. What is “telemarketing?”, you ask. The FCC defines it (in Section 64.1200(f) of the rules) as

the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

Some telemarketing calls, often referred to as “robocalls”, are made using automatic dialing equipment (autodialers); some may include prerecorded or artificial voices. With few exceptions, all telemarketing calls require some form of consent on the part of the party being called.

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This Should Get Your Attention: Fake EAS Attention Signals Fetch Fines

Enforcement Bureau sends its own warning signal about improper use of EAS (or EAS-like) attention-getting tones.

The lesson of the day: it is illegal to broadcast EAS attention signal tones, or simulations of EAS tones, except in connection with a genuine alert or an authorized test of the EAS system. Write that down, share it with others, commit it to memory. If you want to see it in black and white, check out Section 11.45 of the Commission’s rules.

Many – probably the vast majority of – broadcasters learned this rule a long time ago and have had no problem complying with it. Indeed, just last June the FCC was confronted by broadcasters skittish about getting crosswise with that very rule. (In response the Commission went out of its way to assure the broadcasters that it really is OK to broadcast one particular FEMA-produced PSA that contains an alert tone that sounds like the EAS signal.)

But according to the Enforcement Bureau, recently it’s been receiving “numerous consumer complaints” about the use of EAS-like tones in ads and promotions. And sure enough, the Bureau has now brought the hammer down on two culprits who used simulations of EAS tones to promote, in one case, an upcoming program and, in the other, one of its advertisers (that would be the Fan Wear and More Store). The former got spanked to the tune of $25,000 in a notice of apparent liability (NAL); the latter copped a plea and entered into a Consent Decree that will cost it a “voluntary contribution” of $39,000.

The rationale for the rule is obvious.

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Just Another Link in the Chain: Offshore Manufacturer Fined for "Marketing"

Hong Kong supplier to U.S. distributor is charged with selling noncompliant devices into the United States.

Here is an unquestioned violation of FCC rules. But it raises the question of who answers for that violation. The outcome will particularly interest those who manufacture FCC-regulated equipment.

Richfield Electronics is a Hong Kong-based company that makes an FM-band transmitter for distributing music through a residence. It builds the devices according to designs provided by TAW-Global, based in Michigan, and then ships them to TAW, which distributes them in the United States. Richfield had the device properly certified in 2002 as being in compliance with the applicable FCC rules.  Intended to protect commercial FM broadcasters from interference that could be caused by such devices, those rules are stringent.

Some time after receiving certification, Richfield modified the antenna in an effort (it said) to improve the sound quality. The change increased the transmitted power, enough to take the device out of compliance. Richfield admits to having sent at least 2,500 of the noncompliant units to TAW, although the FCC, finding inconsistencies in Richfield’s responses, thinks this number may be low. The FCC also identified problems with Richfield’s certification labeling.

Back in 2009, the FCC issued a Notice of Apparent Liability against Richfield. It proposed forfeitures of $14,000 for marketing non-compliant and unauthorized equipment (along with another $4,000 for the labeling issues).

Richfield objected, arguing that it had not “marketed” any noncompliant devices in the United States. According to Richfield, any U.S. marketing was done by TAW, not Richfield.

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Meet the New Boss(es) . . .

. . . same as the old bosses? Wheeler, O’Rielly finally confirmed.

OK, readers, how about a big “welcome aboard” to the two newest arrivals on the Eighth Floor?

The Senate has confirmed Tom Wheeler and Michael O’Rielly as Chairman and Commissioner, respectively, of the Federal Communications Commission. They are expected to be sworn in as soon as possible. The confirmations return the FCC to a full complement of five commissioners. 

For those keeping score, Wheeler will be the third Democrat commissioner (joining Commissioners Mignon Clyburn – previously the Acting Chairwoman – and Jessica Rosenworcel) while O’Rielly will be the second Republican (along with Commissioner Ajit Pai).

The confirmations were delayed briefly when Senator Ted Cruz placed a procedural hold on them because of concerns about possible changes in FCC policy to expand mandatory disclosures relative to television political advertisements. Wheeler and Cruz had a sit-down chat about the matter, during which Wheeler advised Cruz that imposing such disclosure requirements was “not a priority”. Cruz was apparently satisfied, and he lifted his hold.

With that, the normally creaky Congressional wheels suddenly began to spin with impressive ease. During the last two minutes of the Senate session immediately following Cruz’s announcement, Senate Majority Leader Harry Reid asked for unanimous consent that the nominees be confirmed. No objection was voiced, and that was that. 

The record will reflect that, also in those last two minutes, the Senate unanimously approved the designation of November 2, 2013, as National Bison Day. And, just in time (since the month was already pretty much gone), it approved the annual designation of October as National Work and Family Month.

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Bulbs Behind Bars II: FCC Goes After Hair Salon Lighting Fixture

Tests showed fluorescents causing interference to AT&T 4G service.

Suppose you have a non-FCC-related business – a hair salon, let’s say. And suppose it uses fluorescent lights. You wouldn’t think that that alone makes the business subject to FCC jurisdiction.

Ronald Bethany probably didn’t think so. He runs the Perfect Cuts Salon in San Antonio, Texas, in half of a tiny strip-mall building. Hairdressing does not come among the FCC’s stated responsibilities.

But radio interference does. The salon’s fluorescent lights emitted a stray radio signal at 705 MHz, part of a band licensed to AT&T for the delivery of 4G service to smartphones and tablets. This particular frequency is used for transmissions from a mobile device to a cell tower, such as the cell tower that rises up directly behind the Perfect Cuts Salon.

When AT&T received interference, it probably suspected the strip mall, as this kind of interference usually does not travel far. An AT&T staffer stopped by and, presumably with Mr. Bethany’s consent, turned the salon lights off and on. Sure enough, the interference went off and on at the same time. Mr. Bethany contacted General Electric, which made the lights; GE offered to replace them. So far, so good.

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Yeah, Who DOES Need the FCC?

A counterpoint to Mitchell Lazarus’s similarly-titled, but philosophically different, post.

[Blogmeister’s Note: When we posted Mitchell Lazarus’s item concerning the need for the FCC, we anticipated push-back. And sure enough, our colleague Jon Markman has stepped up. The views expressed in the post below are Jon’s alone. As was the case with Mitchell’s post, others here at FHH may share some or all of Jon’s views; some may not. Ditto for our readers. We again encourage anyone who agrees or disagrees with Jon to let us know by sending along a comment.]

In a recent post here on CommLawBlog, my colleague Mitchell Lazarus addressed some core functions of the FCC that make it “not only valuable, but indispensable to how we live”. With all due respect to Mitchell – who has forgotten more about the FCC, spectrum, and telecom law in the last month than I could hope to learn in a decade – I would like to offer a different take.

The government shutdown prompts a conversation on just what are the “essential” tasks of the Federal government (keeping in mind that the Federal government is just one of the many levels of government we have in the U.S.).

In his post, Mitchell alluded to some of the extreme posturing inspired by the government shutdown, such as claims that the shutdown demonstrated the irrelevance of the Federal government and proved that smaller government is good and no government is even better. I tend to believe that this was mostly rhetoric used by one side to rally their base and/or strengthen their bargaining position in the budget negotiations; I suspect that the speakers in fact support much of what the Federal government does. But insofar as they were representative of honest beliefs, they are indicative of a far more extreme position than the norm.

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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.

The Commission has issued its annual public notice reminding video distributors everywhere not just in areas prone to particular types of disasters – of their obligation to make all emergency information accessible to people with vision and hearing impairments. This reminder, usually timed to coincide with hurricane and forest fire seasons, underscores the need to be alert to the needs of all audience members when emergency information is being provided. (Since this year’s notice is substantially identical to last year’s, the following recap similarly tracks our post describing last year’s notice.)

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.

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Deadline Fast Approaching for CALM Act Waiver Extension Requests

Attention, any TV licensee with a CALM Act waiver still in effect. You’ve got until October 14, 2013 to file for extension of that waiver. Failure to do so could mean that you will have to be in compliance with the CALM Act requirements when December 13 rolls around

The 2010 CALM Act, designed to stifle “loud commercials”, technically took effect in December 2012. But, in its infinite legislative wisdom, Congress provided the opportunity for an initial one-year waiver – possibly extendible for a second year.  In implementing the Act, the Commission allowed “small” stations and MVPDs to have the initial one-year waiver pretty much for the asking: all that was required was a self-certification that (a) the station/MVPD met the limited standards for “small” facilities and (b) it needed the extra year to “obtain specified equipment in order to avoid the financial hardship that would be imposed” if it had to get the equipment sooner.  (Check out our earlier post for more information on those requirements.)

As we reported back in July, the initial one-year waivers will expire as of the first anniversary of the effectiveness of the CALM Act rules, i.e., by December 13, 2013.  Requests for the extension of the waiver must be filed at least 60 days prior to the expiration of the currently outstanding waiver, which gets us to the upcoming October 14, 2013 deadline.  (Last year the Commission extended the deadline after the fact; we can’t say whether the Commission will do the same again, but we wouldn’t bet the farm on a similar extension this year.)

Back in 2011, when it first announced how it would deal with waivers, the Commission said that the “filing requirements to request a waiver for a second year are the same as those for the initial waiver request.” That seems pretty clear, but you never can tell. (Again, for a summary of the filing requirements as originally laid out by the FCC, see our earlier post.)   In any event, if you will be needing an additional one-year waiver, you’ve got just a couple of weeks to request it. 

We can assist in the preparation and filing of extension requests -- let us know if we can help.

FCC Works its Will on the WISP

Wireless Internet provider fined $202,000 for interference to airport radar.

An FCC enforcement official once let us in on a bit of internal policy: “We keep jacking up the fines till we get their attention,” he said. At $202,000, we suspect the FCC has Towerstream’s attention.

The case is one more in a series of 5 GHz unlicensed transmitters causing interference to airport Terminal Doppler Weather Radar (TDWR) systems. In the past, the FCC has cracked down on illegally modified transmitters, as here, but when the interference comes from lawful transmitters, it has acted more gently. This case adds a third category: severe treatment for a repeat offender, albeit using lawful equipment.

Towerstream Corporation, according to its website, is a wireless Internet service provider (WISP) catering to business customers. At least some of its facilities use the 5 GHz unlicensed “U-NII” band, of which a segment is shared with TDWRs. Back in 2009, the FCC notified Towerstream it was causing interference to TDWRs at six different airports variously serving the New York City area, Chicago, and the Florida east coast. Towerstream subsequently assured the FCC in detail that it had fixed the problem.

The FCC found otherwise. In 2012 it notified Towerstream of interference from multiple devices to TDWRs at the JFK, Miami, and Fort Lauderdale airports.

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Man Fined for Jamming Airport Navigation Gear

Use of illegal device was intended to block employer’s tracking device.

Tip for today: don’t fire up your GPS jammer next to an airport. Gary P. Bojczak did, and it’s going to cost him $31,875.

Mr. Bojczak’s work entailed driving a truck – a red Ford F-150 pickup, to be precise, supplied by his employer. Also supplied by the employer was a GPS tracking device installed in the truck. Typically these report back on the employee’s route, thus discouraging unauthorized detours, and may also note the duration of lunch stops, speed limit violations, etc. Mr. Bojczak, apparently preferring to deny his employer this kind of information, purchased an illegal GPS jamming device and operated it in the truck.

Presumably Mr. Bojczak successfully prevented the tracking device from doing its job. It does not take much; GPS signals arriving at the Earth’s surface are weak, having traveled some 13,000 miles through space. Unfortunately, Mr. Bojczak also successfully jammed a GPS system being tested for aircraft operations at Newark Liberty International Airport. The FCC investigated; airport police and security personnel stopped Mr. Bojczak adjacent to the airport, where he surrendered the jammer.

The FCC found three offenses: operating without a license; use of unauthorized equipment; and interfering with authorized communications. (The operating-without-a-license item strikes us as specious, as the FCC would never have issued a license for the jammer; see our previous rant on this topic, and also this one.) The base fines for the offenses add up to $22,000. The FCC adjusted upward to $42,500, to reflect the added culpability of deliberate jamming, and then came down 25% in acknowledgement of Mr. Bojczak’s having given up the jammer without a fight.

Many GPS jammers go undetected in part because they can operate successfully at low power. But airport navigation equipment is sensitive, and the FCC enforces vigorously when public safety is at stake. If you have a jammer, our best advice is to turn it off. Especially near an airport. All of us air travelers will thank you.

Bulb Behind Bars? FCC Cites a Lighting Fixture for Radio Interference

Office illumination caused radio noise on a commercial wireless frequency.

First the U.S. Department of Agriculture ordered a children’s magician to set up a disaster plan for his rabbit. Then the FCC asserted jurisdiction over a lighting fixture. It must be something in the water here in Washington.

The offending fixture, which illuminates an office building in San Jan, Puerto Rico, apparently put out a stray signal at 712.5 MHz. That frequency is part of an auctioned band used for commercial wireless communications. The FCC does not say, but we think it likely that the wireless provider tracked down and fingered the office building, much as other wireless providers have complained about other sources of interference.

And, yes, the FCC has jurisdiction over all sources of radio interference, including lighting fixtures. It issued an official warning, called a citation, to the building’s occupant, alerting it to possible monetary forfeitures up into six figures if the interference continues.

For the last few months, a new phrase has been turning up in FCC citations relating to radio interference (and one on automatic dialing). Previously, a citation recipient who commits the same offense a second time has been subject only to penalties for the new offense. The new language makes the re-offender also subject to additional penalties for the original offense that triggered the citation. It’s as if the police stop you for speeding on Monday and give you a warning, stop you again on Tuesday, and thereby make you retroactively liable for Monday’s fine as well as Tuesday’s. Whether or not the imposition of additional penalties based on alleged misconduct that hasn’t been fully adjudicated is really consistent with the Communications Act (and simple fairness) isn’t entirely clear – but so far, the issue has not yet made it to the courts.

Our friend Gary Cavell suggests the office building switch to candles and kerosene lamps – except that might violate environmental laws and create a fire hazard, so their only legally safe choice may be to sit in the dark.

Did Verizon Short its Customers - and the FCC - $250 million (or More)?

D. C. communications lawyers Smithwick & Belendiuk ask FCC Inspector General to take another look at 2010 consent decree that may not have been all it was cracked up to be.

In recent years the Commission has repeatedly characterized its mission as one of “consumer protection”. One prominent example: back in 2010, the Enforcement Bureau claimed to have “ma[de] things right and put customers back in the driver’s seat”  with respect to “mystery fees” that Verizon Wireless had apparently been improperly imposing on its customers for years. Then-Chairman Genachowski said that the Bureau’s successful negotiation of a consent decree with Verizon demonstrated to American consumers that “the FCC has got your back”.  Then-Commissioner (now Acting Chairwoman) Clyburn said that the “voluntary contribution” Verizon agreed to pay the government – $25 million, over and above the $50+ million in unlawful charges to be refunded – “sends a clear message as to how important this is to us”.

You’d think that the 2010 Verizon consent decree was a massive triumph of Good over Evil, with all innocent victims made whole and the wrong-doer brought totally to its knees.

Um, not exactly, according to the folks at Smithwick & Belendiuk (S&B), a D.C. communications law firm.

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FCC Ruling: CPNI Protections Extend to Some (But Not All) Data Stored on Mobile Devices

FCC rules that confidential data collected on consumers’ devices by software for which carrier is responsible must be protected. 

Irony alert! As questions mount about the government’s access to consumers’ private communications – both telephonic and digital – the FCC has issued a Declaratory Ruling (Ruling) advising wireless carriers of their obligation to protect the privacy of their customers’ information. So even as the government acknowledges that its own treatment of such information may not have been as confidential as had previously been represented, the government is imposing arguably new confidentiality burdens on both large and small mobile carriers.

Essential governmental principle at work: do as we say, not as we do.

What’s at issue here is the protection of Customer Proprietary Network Information (CPNI), but in a relatively new setting. 

Generally, CPNI consists of certain customer information – including such data as the customer’s specific calling plans, special features, pricing and terms, and details about whom they call and when – that is deemed “proprietary”. (The official statutory definition of CPNI may be found in Section 222(h)(1) of the Communications Act.) The law requires that carriers go to great lengths to keep CPNI confidential: carriers can use, disclose, or permit access to individually identifiable CPNI only in limited circumstances relating to their provision of telecommunications services or with customer consent.

Historically, the FCC has focused on how carriers collect, retain and use CPNI in their internal, “back-office” systems. But in 2011, a new risk to CPNI surfaced, a risk not in the carriers’ internal systems, but in the consumers’ own individual devices.

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FCC to Regulatee: Next Time, You'd Better Comply

Company ignores FCC inquiry, receives only a warning

Let’s say you are part of an industry under FCC regulation. The FCC sends you an order telling you to provide certain information. Suppose you ignore that order. What happens next? Jack-booted federal thugs at your door? Black government helicopters circling your business? At least a letter imposing a fine?

None of those, it turns out. In fact, not much happens at all, the first time you blow off the FCC. Unless you hold some kind of FCC license or authorization, or do something that requires a license or authorization you don’t have, you can ignore the FCC with impunity – once.

Consider the experience of CallingPost Communications, Inc. The FCC sent the company a letter asking about its use of automatic dialing equipment and possible Do-Not-Call violations. Ordinarily these letters require an answer, supported by affidavit, within 30 days. The president of the company explained he was “absolutely swamped.” The FCC graciously gave him two extensions of time for a total of almost four months. In the end, though, CallingPost simply did not answer.

The FCC’s response? A stern warning telling CallingPost it better not ignore the FCC again, because next time the FCC might impose a fine. That was it.

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FCC Whacks TV Max

No consent for retransmission of TV signals? That’ll be $2.25 million, please.

If you’ve ever wondered what would happen if you retransmitted the programming of TV stations without their consent, and then dissembled about it to the FCC, listen up. If you go that route, you could be looking at a fine north of $2,000,000. That’s right – two MILLION dollars plus.

Do we have your attention?

We know about the likely penalty thanks to a Notice of Apparent Liability For Forfeiture and Order (Order) – directed to TV Max, Inc. and its affiliates and its individual controlling principals – for violating Section 325(b) of the Communications Act and Section 76.64 of the Commission’s rules. Those sections lay out the general retransmission consent rules governing multichannel video programming distributor (MVPD) carriage of over-the-air TV signals other than through the “must-carry” process.  According to the Order, TV Max retransmitted the signals of six broadcast stations without obtaining their consent.  For doing so, TV Max is looking at a proposed fine of $2,250,000.  Since the Commission has penalized MVPD’s for retransmission consent violations only a couple of times in the past – and then only in the low five-figure range of $15,000 (reduced from a maximum potential of $250,000 or so) – we can probably assume that TV Max really ticked off the FCC.

In fact, the Order provides a model for how to infuriate the Commission.  [Practice tip:  We strongly recommend that MVPDs avoid this model.]

First, some background.

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Harmonic Convergence? FM Interference to 700 MHz LTE Service

700 MHz licensees (with some apparent FCC support) complain of FM interference to hypersensitive LTE gear – but must FM licensees foot the bill to correct the problem?

The introduction of different species into an established ecosystem tends to be a dicey proposition.  Almost invariably, co-habitation requires the sharing of scarce resources.  And more often than not, the different species approach the whole sharing thing in different, not entirely compatible, ways.  The result: occasional dissatisfactions and frustrations – leading to occasional inter-species frictions and fisticuffs.

Take the RF spectrum ecosystem, for example.

Most inhabitants of the spectrum have historically figured out ways to coexist in relative peace (at least for the most part) – thanks largely to the fact that the potential impact of one service on another has been taken into account in the frequency allocation process. But as the demand for spectrum increases, and every little niche is filled up, it is becoming more difficult to avoid inter-service conflicts. And sure enough, the introduction of a recent new species – 700 MHz wireless systems using LTE equipment – seems to be causing some unexpected problems. 

Since January, 2012, spectrum that used to constitute TV channels 52 and up has been reallocated to 700 MHz wireless services. Television still occupies channels 51 and down (at least for the time being), and there has been much hand-wringing over how the relatively low power wireless services will be able to coexist in such close proximity to high-powered TV stations.

Now it turns out that another problem – less anticipated – has reared its ugly head. Wireless operators using high gain LTE antenna systems and high gain LTE receivers have experienced interference which, they claim, is caused not by TV but by nearby FM stations. 

FM stations? How can that be, since FM stations operate in the 88-108 MHz band, far away from 700 MHz?

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Website Operators: Be Aware, and Beware, of COPPA

If you’ve got a website, you could have a problem. Welcome to the COPPA Rule, a complicated FTC regulation with (a) potentially expensive ramification, and (b) some new provisions about to take effect.

If you operate a commercial website that collects personal information from visitors, you’d better be familiar with COPPA – the Children’s Online Privacy Protection Act – and the COPPA Rule adopted by the Federal Trade Commission pursuant to the Act. Even a single COPPA Rule violation can lead to a $16,000 penalty, and the FTC hasn’t been shy about doling out seven-figure fines for cumulative violations. (For the faint of heart unwilling to wade into the actual law or FTC rule, you can check out the FTC’s COPPA FAQs. But even that resource weighs in at the equivalent of 58 printed pages.)

The principal goal of COPPA is to ensure that personal information relating to children under the age of 13 is not collected or distributed by website operators without parental consent. Since many broadcast stations may be collecting information on their websites (even without realizing it), we figure it’s a good idea to remind all our readers about COPPA.

And now is an excellent time to do so because a number of important changes to the law are set to take effect on July 1, 2013.

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Update: Comment Deadlines Set in Big House Burner Ban Proceeding

Last month we reported on a Notice of Proposed Rulemaking (NPRM) looking to address the problem of contraband cell phone use in prisons. The NPRM has now been published in the Federal Register, which means that comment and reply comment deadlines have now been set. If you’re looking to chip in your two cents’ worth, you’ve got until July 18, 2013 to file comments, and until August 2 for reply comments.

FCC Proposes Tripled Fine for Unauthorized Two-Way Radios

Base forfeiture tripled because offender is a multi-billion dollar global enterprise.

Here’s another reminder to stay on top of the licensing paperwork. Especially if your company is successful.

A company called Remel, Inc. manufactures and supplies microbiology products for clinical, industrial, and research laboratories. Its corporate parent, Thermo Fisher Scientific, Inc., is a global supplier of analytical instruments, laboratory and diagnostic equipment, chemicals and reagents, and related products and services.

The companies, like many others, use two-way radios. They say their radio supplier told them, incorrectly, that the radios did not require an FCC a license. (Apparently this happens a lot.) On finding out that a license is in fact required, the companies turned the radios off and applied to the FCC for a license on a different frequency for a higher-powered radio, which the FCC subsequently granted.

The FCC remained concerned, though, about the period of unlicensed operation, which spanned some nine years. Moreover, a frequency the companies used over that time was allocated to the General Mobile Radio Service (GMRS), a service intended for use by individuals, not companies. GMRS radios are popular with families on camping trips, and the like. In fact, only individuals, and not companies, are eligible for a GMRS license.

Not many individuals bother, though. Our friends over at SpectrumWiki.com note that the fee for a GMRS license is many times the cost of the radio equipment, so that only a very small fraction of GMRS operators actually obtain one. (Our law partner Peter Tannenwald wishes it known that he shelled out the eighty bucks and is duly licensed.)

The FCC could have acknowledged that Remel and Thermo Fisher made an honest mistake and fixed it, and then let the matter drop, or possibly charged a small forfeiture. Instead it proposed a forfeiture of $30,000. The FCC also emphasized that Remel and Thermo Fisher, not being individuals, would not have been eligible for a GMRS license. This put the FCC once again in the odd position of imposing sanctions for failing to obtain a license that the FCC would not have granted.

The base forfeiture for operating without a license is $10,000. The FCC tripled that on the ground that Thermo Fisher is a “multi-billion dollar global enterprise” and so “should expect the assessment of higher forfeitures for violations.”

The takeaway: Check your licenses. Don’t ever believe your radio supplier. And prepare for extra penalties if your company makes a lot of money.

Raisin' Defenses at the FCC

A Supreme Court case offers a possible route to appealing a forfeiture without having to pay it first.

A pair of California raisin farmers might have made it easier to challenge an FCC forfeiture.

A party dinged with a forfeiture that it thinks is unfair now has two options under the Communications Act. One is to challenge the forfeiture order directly in the Court of Appeals. The problem with that approach is that, as a condition to getting into the Court of Appeals, the challenger must first pay the forfeiture. Since forfeitures can reach up into six and seven figures and, let’s face it, not everyone has that much spare cash lying around, that condition poses a serious disincentive to direct appeals.

The other option is to not pay the forfeiture and wait for the FCC (assisted by their friends from the Department of Justice) to bring suit in your nearest federal District Court. In that case, the burden is on the government to prove that you are in fact really liable for the forfeiture, which gives you an arguable advantage going in. But at least one appellate court has held that a party choosing this option is not allowed to raise the full panoply of defenses that might normally be available in challenging the forfeiture.

What does this have to do with raisins?

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Aero Freq Leaks: A Potentially Expensive Problem for Non-Cable MVPDs

Citation issued to Florida motel serves as reminder of possible penalties for leaky cable systems.

 If you’re a school, or a hotel, or a hospital, or some other operation offering in-house cable TV service, you may be subject to a six-figure FCC fine, even though you might not think that you’re subject to the long arm of the FCC’s enforcement machine.  The Commission has been kind enough to issue us all a reminder of that – in the form of a “Citation and Order” directed to the Parkway Inn Motel in sunny Miami Springs, Florida. 

From its website you might not think the Parkway Inn (Motto: “Your Satisfaction is our Main Purpose”) would attract the FCC’s attention, but it did.  According to FCC inspectors, the Parkway’s video system was leaking big-time (in one case by a factor of more than 100 times the permitted level) on a couple of aeronautical frequencies.  Yikes!

As our faithful readers may recall, last August we reported on an FCC public notice warning “non-cable MVPDs” of their obligations relative to their useof aeronautical frequency bands.  The notice – issued in connection with three separate citations notifying, respectively, an inn, an elder care facility, and a rehabilitation hospital, that they were all in violation of the rules – was an effort to get the word out to other unsuspecting non-cable MVPDs.

The FCC’s notice, and our related post, apparently weren’t entirely successful, since not everyone got the message – at least the Parkway Inn Motel didn’t.

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FEMA WEA PSA's 'R' OK!

In response to non-request for waiver, Public Safety and Homeland Security Bureau waives rules that may not need to be waived.

Broadcasters may be asked (many apparently already have been asked) by the Federal Emergency Management Agency (FEMA) to broadcast some PSA’s relating to the (relatively) new Wireless Emergency Alert (WEA) system. While some broadcasters have reacted to that request with understandable – and legitimate – reluctance, the FCC’s Public Safety and Homeland Security Bureau has now assured us that the PSA’s are OK for broadcast. . . as long as certain conditions are met.

The bottom line here is relatively simple; getting there, though, requires a surprising amount of explanation.

For years, FEMA and the FCC and others have been working to improve the overall ability of government officials to alert the citizenry to emergency situations.   Broadcasters have observed one aspect of that effort in the overhaul of the Emergency Alert System.  On the non-broadcast side, the FCC established the WEA system, through which the guv’mint can send geographically-targeted emergency messages direct to individuals’ mobile devices. The WEA has already been triggered in a wide range of situations – hurricanes, tornadoes, terrorist threats, missing persons, etc. – and has, according to the FCC, “proven to be a valuable tool”.

So what’s the problem?

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FCC Slams Long Distance Carrier for "Slamming"

An expensive reminder that the FCC is still policing the long distance industry.

If you’ve been thinking that the FCC doesn’t care about “slamming” anymore, think again. The Commission has proposed a multi-million dollar fine against long distance service provider Advantage Telecommunications Corp. (ATC) for slamming violations.

Which raises two obvious questions: (1) Is there still such a thing as a long distance service provider? and (2) “What did ATC do to deserve a $7.6 million fine?

Answer (1): Yes, long distance service providers still exist. There remains a niche market for standalone (i.e., unaffiliated with your local phone company) long distance carriers serving consumers with traditional landline telephones. They offer 1+ (i.e., long distance, dubbed “1+” because you have to dial “1” plus the rest of the number to make a long distance call) service plans in competition with the local phone companies.

Now, to the $7.6 million dollar question . . .

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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 area.

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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.