******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Federal Communications Commission Washington, D.C. 20554 July 13, 1998 Released: July 15, 1998 CERTIFIED MAIL - RETURN RECEIPT REQUESTED Ace TV, Inc. Licensee, WACY(TV) P.O. Box 19032 Green Bay, WI 54307 Dear Licensee: This letter constitutes a NOTICE OF APPARENT LIABILITY FOR FORFEITURE in the amount of ten thousand dollars ($10,000) pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), under authority delegated to the Chief of the Mass Media Bureau by Section 0.283 of the Commission's Rules, 47 C.F.R.  0.283, for repeated violations of the Commission's rule limiting the amount of commercial matter that may be aired during children's programming. In the Children's Television Act of 1990, Pub. L. No. 101-437, 104 Stat. 996-1000, codified at 47 U.S.C. Sections 303a, 303b and 394, Congress directed the Commission to adopt rules, inter alia, limiting the amount of commercial matter that television stations may air during children's programming, and to consider in its review of television license renewals the extent to which the licensee has complied with such commercial limits. Accordingly, the Commission adopted Section 73.670 of the Rules, 47 C.F.R.  73.670, which limits the amount of commercial matter which may be aired during children's programming to 10.5 minutes on weekends and 12 minutes on weekdays. The Commission also stated that a program associated with a product, in which commercials for that product are aired, would cause the entire program to be counted as commercial time (a "program- length commercial"). Children's Television Programming, 6 FCC Rcd 2111, 2118, recon. granted in part, 6 FCC Rcd 5093, 5098 (1991). In addition, the Commission reiterated its long-standing policy against "host-selling," i.e, "the use of program talent to deliver commercials," including "endorsements or selling by animated cartoon characters as well as `live' program hosts." Id. at 2127 n.147, 6 FCC Rcd at 5097; see also Action for Children's Television, 50 FCC 2d 1, 8, 16-17 (1974). These commercial limitations became effective on January 1, 1992. Children's Television Programming, 6 FCC Rcd 5529, 5530 (1991). On August 1, 1997, you filed an application for renewal of license (FCC Form 303-S) for station WACY(TV), Appleton, Wisconsin (File No. BRCT-970801KH). In response to Section III, Question 4 of that application, you certify that during the previous license term WACY(TV) failed to comply with the limitations on commercial matter in children's programming specified in Section 73.670 of the Commission's Rules. In Exhibit 2 to the renewal application, you indicate that between November 28, 1994, and February 12, 1997, WACY(TV) violated the children's television commercial limits on five occasions. Of these five overages, one was 30 seconds in duration and four were program-length commercials. You attribute the 30-second overage to a commercial make good, and assert that the station's traffic manager subsequently sent a memorandum to all of WACY(TV)'s master control operators advising them not to reschedule make goods during children's programming, and that he was assuming responsibility for any necessary rescheduling. As for the program-length commercials, you state that on November 28, 1994, November 30, 1994, and December 2, 1994, an advertisement for a Sonic the Hedgehog toy aired during the "Sonic the Hedgehog" show. The remaining program-length commercial you describe occurred on October 24, 1996, when an advertisement for "Bananas in Pajamas" ran during the "Bananas in Pajamas" program. You maintain, however, that you received the "Sonic the Hedgehog" and "Bananas in Pajamas" programs from the syndicator with the commercials included. Three other incidents you report appear to be violations of the Commission's policy prohibiting host- selling. Specifically, on December 5, 7 and 9, 1994, a commercial featuring Tails, a character from "Sonic the Hedgehog," ran during the "Sonic the Hedgehog" program. In a February 18, 1998 amendment to the renewal application, you clarify that the commercial was for the Sega Pico, a computer video game system that attaches to the television, and focused on three pieces of educational software that could be played on that system: (1) Winnie the Pooh; (2) Mickey's Blast into the Past; and (3) Magic Crayons. WACY(TV)'s record during the last license term of exceeding the Commission's commercial limits on children's television programming on five occasions constitutes a repeated violation of Section 73.670 of the Commission's Rules. Accordingly, pursuant to Section 503(b) of the Communications Act, Ace TV, Inc. is hereby advised of its apparent liability for forfeiture in the amount of ten thousand dollars ($10,000) for its apparent repeated violation of Section 73.670 of the Commission's Rules. The amount specified was reached after consideration of the factors set forth in Section 503(b)(2) of the Communications Act, and, in particular, the following criteria: (1) the number of instances of commercial overages; (2) the length and nature of each such overage; (3) the period of time over which such overages occurred; (4) whether or not the licensee established an effective program to ensure compliance; and (5) the specific reasons that the licensee gives for the overages. These criteria are appropriate in analyzing violations of the commercial limits during children's programming, since they take into account, inter alia, "the nature, circumstances, extent, and gravity of the violation, and, with respect to the violator, the degree of culpability," as required under  503(b)(2)(D) of the Communications Act. As discussed above, WACY(TV) exceeded the children's television commercial limits on five occasions over a period of more than one year and two months. When the Commission delayed the effective date of Section 73.670 of the Rules until January 1, 1992, we stated that "giving the additional time to broadcasters and cable operators before compliance with the commercial limits is required will have the effect of enabling broadcasters and cable operators to hone their plans to ensure compliance . . . . " Children's Television Programming, supra, 6 FCC Rcd at 5530 n.10. Although WACY(TV) appears to have made an effort to comply with the Commission's children's television commercial limits, that effort apparently was not sufficient in light of the violations described in the station's renewal application. Further, four of the overages were program-length commercials. Congress was particularly concerned about program-length commercials because young children often have difficulty distinguishing between commercials and programs. S. Rep. No. 227, 101st Cong., 1st Sess. 24 (1989). Given this Congressional concern, the Commission made it clear that program-length commercials, by their very nature, are extremely serious violations of the children's television commercial limits, stating that the program-length commercial policy "directly addresses a fundamental regulatory concern, that children who have difficulty enough distinguishing program content from unrelated commercial matter, not be all the more confused by a show that interweaves program content and commercial matter." Children's Television Programming, supra, 6 FCC Rcd at 2118. Accordingly, the Commission has routinely assessed higher forfeitures for program-length commercials than for a greater number of conventional overages. See, e.g., Channel 39 Licensee, Inc. (WDZL(TV), 12 FCC Rcd 14012, 14015 n.3. The number and magnitude of overages at issue here mean that children have been subjected to commercial matter greatly in excess of the limits contemplated by Congress when it enacted the Children's Television Act of 1990. Children's Television Programming, supra, 6 FCC Rcd at 2117- 18. The only reason WACY(TV) cites for the 30-second, conventional overage, a commercial make good, does not mitigate or excuse the violation. In this regard, the Commission has repeatedly rejected make goods, human error and/or inadvertence as a basis for excusing violations of the children's television commercial limits. See, e.g., Kentuckiana Broadcasting, Inc. (WFTE(TV)), FCC 98-43 (rel. March 20, 1998); UTV of San Francisco, Inc. (KBHK-TV), 10 FCC Rcd 10987 (1995); LeSea Broadcasting Corp. (WHKE(TV)), 10 FCC Rcd 4977 (1995); Buffalo Management Enterprises Corp. (WIVB-TV), 10 FCC Rcd 4959 (1995); Act III Broadcasting License Corp. (WUTV(TV)), 10 FCC Rcd 4957 (1995); Ramar Communications, Inc. (KJTV(TV)), 9 FCC Rcd 1831 (1994). Nor does the fact that the four program-length commercials resulted from the insertion of commercial matter in programming supplied by a syndicator absolve WACY(TV) of responsibility for the violations. The Commission has consistently held that a licensee's reliance on a program's source or producer for compliance with our children's television rules and policies will not excuse or mitigate violations which do occur. See, e.g., Max Television of Syracuse, L.P. (WSYT(TV)), 10 FCC Rcd 8905 (1995); Mt. Mansfield Television, Inc. (WCAX-TV), 10 FCC Rcd 8797 (1995); Boston Celtics Broadcasting Limited Partnership (WFXT(TV)), 10 FCC Rcd 6686 (1995); WRGB Broadcasting, Inc., MMB Admonition dated August 10, 1994. Furthermore, WACY(TV)'s implementation of policies to prevent subsequent violations of the Commission's children's television rules and policies does not relieve the licensee of liability for violations which have occurred. International Broadcasting Corp., 19 FCC 2d 793, 794 (1969); KEVN, Inc., 8 FCC Rcd 5077, 5078 (1993); R&R Media Corporation (WTWS(TV)), 9 FCC Rcd 1715, 1716 (1994); Mountain States Broadcasting, Inc. (KMSB-TV), 9 FCC Rcd 2545, 2546 (1994); WHP Television, L.P., 10 FCC Rcd 4979, 4980 (1995). Given all of these considerations, WACY(TV)'s violation of Section 73.670 of the Commission's Rules on five occasions warrants a forfeiture in the above-specified amount of $10,000. In a similar case, WTTE, Channel 28 Licensee, Inc. (WTTE(TV)), 12 FCC Rcd 18056 (1997) (Channel 28 Licensee), we assessed a forfeiture of $10,000 for five violations of the children's television commercial limits consisting of one 30-second overage and four program-length commercials. Those violations occurred over a period of approximately two years, and were attributed to inadvertence, human error and the insertion of commercial matter in a program by the program's supplier. More recently, in WCGV Licensee, Inc. (WCGV-TV), DA 98-799 (rel. April 27, 1998), we likewise assessed a $10,000 forfeiture for one 30-second overage and four program-length commercials. The five violations in WCGV Licensee, Inc. occurred over a period of two years and four months, and were attributed to inadvertence and human error. Compared to Channel 28 Licensee and WCGV Licensee, Inc., WACY(TV) had the same number and type of violations, and cites essentially the same reasons for their occurrence. Though WACY(TV)'s violations occurred over a shorter period of time than the violations involved in Channel 28 Licensee and WCGV Licensee, Inc., we note that the period of time over which the overages occurred is only one of the five criteria we consider in assessing the forfeiture amount. For all of these reasons, we find the violations here, on balance, to be comparable to those in Channel 28 Licensee and WCGV Licensee, Inc. Therefore, we conclude that a comparable forfeiture is appropriate. As for the December 5, 7 and 9, 1994 broadcasts of a commercial for Sega Pico featuring a character from "Sonic the Hedgehog" during the "Sonic the Hedgehog" program, they appear to have violated the Commission's policy concerning host-selling, see supra  2, which involves program-related characters promoting any product during the character(s)' program. See, e.g., Ponce-Nicasio Broadcasting (KCMY(TV)), 10 FCC Rcd 6728 (1995). Host-selling is a practice that the Commission has denounced because it takes unfair advantage of the trust that children place in program characters. Children's Television Recon, 6 FCC Rcd at 5097; Action for Children's Television, 50 FCC 2d at 16-17. In this regard, the Commission has stated that "host-selling encompasses any character endorsement -- not just direct vocal appeals -- that has the effect of confusing a child viewer from distinguishing between program and non-program material." WHYY, Inc. (WHYY-TV), 7 FCC Rcd 7123 (1992). For example, the Commission has determined that "advertisements featuring the same type of animation that is regularly featured in the accompanying program constitutes host- selling." Id. Based on the information before us, we believe the commercials broadcast on December 5, 7 and 9, 1994, violated our host-selling policy. We therefore ADMONISH you to avoid such situations in the future. With respect to the forfeiture assessed here, you are afforded a period of thirty (30) days from the date of this letter "to show, in writing, why a forfeiture penalty should not be imposed or should be reduced, or to pay the forfeiture. Any showing as to why the forfeiture should not be imposed or should be reduced shall include a detailed factual statement and such documentation and affidavits as may be pertinent." Section 1.80(f)(3) of the Commission's Rules, 47 C.F.R.  1.80(f)(3). Other relevant provisions of Section 1.80(f)(3) of the Commission's Rules are summarized in the attachment to this letter. Notwithstanding the substantial nature of the violations described here and the severity with which we regard them, we find you qualified to remain a Commission licensee and conclude that grant of your application would serve the public interest, convenience and necessity. Therefore, the license renewal application of Ace TV, Inc., for station WACY(TV), Appleton, Wisconsin, File No. BRCT- 970801KH, IS HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau Enclosures cc: Veronica D. McLaughlin, Esq. LGallo/vsd/MMB n:\winapps\wpwin\kidvid\wacy.nal cc address: Ace TV, Inc. Licensee, WACY(TV) c/0 Veronica D. McLaughlin, Esq. Fisher Wayland Cooper Leader & Zaragoza, L.L.P. 2001 Pennsylvania Avenue, N.W., Suite 400 Washington, D.C. 20006-1851 $//ACE TV, INC., WACY(TV) (Appleton, WI) DA 98-1390//$ $/ 300.503(b) FORFEITURES (NAL) /$ $/ 73.670 COMMERCIAL LIMITS ON CHILDREN'S PROGRAMS /$