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.

But the rules further provided that that impartial panel of judges would be selecting the finalists “on or about March 10”; the finalists would then be posted on the stations’ website so listeners could check them out and vote on their faves. Listener voting was set to occur from March 12-March 21. 

Hold on, there, Skippy – let’s think about that for a minute. If finalists were picked prior to March 12, what would happen to entries submitted between March 13-March 21?

As the Bureau noted in its finest bureaucratese, these rules “conflict[ ] temporally”. (It should not come as much surprise that KOST’s 2009 violation involved a similar “temporal conflict”.) That’s Violation Number Two.

Bottom line? $22,000. That’s a considerable upward adjustment from the standard $4,000 fine for contest violations. But the Bureau figured that there were six separate stations involved, and the licensee has a track record of contest violations (including at least two or three others besides the 2009 problem). So $22 G’s sounded about right to the Bureau – and it warned the licensee it could expect even higher fines “if such misconduct persists”.

The take-home lessons here are pretty simple.

First, if you mention a contest on the air, you’ll have to comply with Section 73.1216. That’s the way it was three years ago, and that’s the way it still is. You should read that section and be prepared to jump through the hoops it imposes. Even if the contest is supposedly limited to your website, it’s still subject to the broadcast rules if you promote it on the air.

Second, when you design a contest, it’s always a good idea to carefully read through the rules and procedures you cook up before you finalize things. Oh, and keep a calendar handy while you’re doing the read-through. That may help avoid those pesky temporal conflicts. Such precautions are simply to take – some might even say that they’re nothing more than common sense steps that should factor into the planning of any station promotion. However you may choose to look at it, the fact is that failing to think things through thoroughly beforehand gives rise to a potential fine of at least $4,000, and possibly more – not to mention the hassle and expense of responding to an FCC letter of inquiry.