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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of Liability of ) ) SAINTE LIMITED ) ) Licensee of Television Station ) KCVU-TV, Paradise, California ) ) for a Forfeiture ) MEMORANDUM OPINION AND ORDER Adopted: August 20, 1998 Released: August 26, 1998 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to authority delegated by Section 0.283 of the Commission's Rules, 47 C.F.R.  0.283, has before it a Notice of Apparent Liability (NAL) in the amount of ten thousand dollars ($10,000) issued against Sainte Limited (Sainte), licensee of station KCVU-TV, Paradise, California; and Sainte's Response. The forfeiture was assessed for apparent willful and repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R.  73.670. 2. By way of background, in the Children's Television Act of 1990, 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, 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 reaffirmed and clarified its long-standing policy 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). These commercial limitations became effective on January 1, 1992. Children's Television Programming, 6 FCC Rcd 5529, 5530 (1991). 3. On July 30, 1993, Sainte filed an application for renewal of license for station KCVU-TV (File No. BRCT-930730KR). In response to Question 9(b) of the application, station KCVU-TV stated that it had not complied with the children's television commercial limits specified in the Commission's Rules. In accordance with Question 9(c), station KCVU-TV submitted Exhibit 2 to its application, stating that during six broadcasts of the program "Quigley's Village," "videotape copies of the televised program itself" were offered for sale and that, therefore, "it was determined that the program itself had become a half-hour program-length commercial." 4. In a letter dated July 20, 1994, Sainte stated that the licensee's conclusion that the programs in question were program-length commercials was based "entirely" upon "a two-minute segment of the program [which] consisted of an invitation by some of the Village puppets for viewers to become a member of the `Quigley's Village Kids Club;'" and that this membership, which cost $10.00 plus $3.00 for shipping and handling, included "a one-year subscription to the Village newspaper, a certificate, a picture of the `house' signed by Mr. Quigley, a button with a picture of the characters on it and a videotape of the program as broadcast." In addition, Sainte stated that there was a separate "segment" of the "Quigley's Village" programs which "announced the availability" of four tapes of the program costing $14.99 each plus $4.99 for shipping and handling. However, Sainte argued that the "Quigley's Village" programs in question were not program-length commercials because no "product" was being sold "in the sense used by the Commission" and because "[t]here were no commercial messages as such in the program[s]." In this regard, Sainte asserted that the program's producer does not sell or license for sale "any products or any of its puppet characters;" and that the videotapes offered for sale consisted of "program material that anyone could have recorded at home." Further, Sainte stated that the videotape offer "was directed to adults since it required actions on their part" and that "[t]he offer of similar tapes by non-commercial stations has been determined by the Commission to be non-commercial in nature . . . ." 5. In Sainte NAL, the Mass Media Bureau determined that the videotapes and club memberships were products associated with the "Quigley's Village" program; that the announcements in question offered such program-related products for sale at more than nominal prices; and that the fact that the videotaped program(s) offered could have been taped at home was irrelevant. The NAL further stated that the assertion that such announcements were allegedly directed at adults has never been a consideration in evaluating violations of the Commission's children's television commercial limitation rules and policies; rather, the relevant consideration in program-length commercial cases is whether announcements offering program-related products for sale are broadcast during a program designed and intended for children. Upon consideration of factors specified in Section 503(b)(2) of the Communications Act, it was determined that a forfeiture in the amount of $10,000 was appropriate. Id. 6. In its Response to Sainte NAL, Sainte reiterates arguments it previously made. Sainte contends that the "Quigley's Village" program cannot be a program-length commercial because the program is "educational," is broadcast "without commercials" and "has no commercial `tie-ins'" with "manufactured products," but offers for sale a copy of the program itself. Sainte says that the "invitations" to purchase "program-related materials" are not "commercial" because, if they had been broadcast by a noncommercial educational television station, they would have been "fully within the FCC's regulations for noncommercial educational TV licensees" (italics in original); that the "invitation" to purchase videotapes, which "add to the child's educational experience," was "directed to parents;" that the Kids Club "invitation" was "program-related and designed to enhance the educational aspects of the program;" and that the "invitations" were "informational rather than promotional." In addition, Sainte states that "the price of the tapes was the critical factor in determining the "Quigley's Village" invitations to be commercial." Sainte argues that this finding is incorrect because the price asked for the Kids Club membership and the videotapes was "indeed nominal" and/or "quite nominal," and because, "[i]n any event," price is "no longer" a "relevant factor in determining whether an offer was commercial." 7. Sainte also asserts that the "program-related invitations" are not "commercial" under the Commission's Rules because "it is not `commercial matter' for a broadcaster to promote the program itself;" and because commercial broadcasters "may sell air time during a children's program' for purposes of presenting educational and informational material,' and such will not be considered commercial." With regard to whether station KCVU-TV had established an effective program to ensure compliance with the children's television commercial limits, Sainte states that it "had every right to expect" that the producers of "Quigley's Village" "had proper procedures in place to comply with" the Commission's children's commercial limitation rules and policies. 8. In addition, Sainte argues that the forfeiture penalizes activities "authorized" by Congress because the "program-related invitations" were "exactly the type of `special nonbroadcast efforts' to `enhance the educational and informational value' of children's programming sought by Congress in the Children's Television Act." Sainte further maintains that "[t]he Quigley's Village material is clearly not the `commercial matter' that Congress sought to prohibit." In addition, Sainte asserts that the forfeiture is "a violation of equal protection, the Administrative Procedure Act and the First Amendment." With regard to the First Amendment, Sainte contends that the Commission "must evaluate the motives of a broadcaster and program producer before classifying . . . a children's program as a `program-length commercial.'" 9. Sainte states, moreover, that Sainte NAL, must be set aside because it follows Policy Statement - Standards for Assessing Forfeitures (Forfeiture Policy Statement), 8 FCC Rcd 6215 (1993), which was, itself, set aside by the United States Court of Appeals for the District of Columbia Circuit in United States Telephone Ass'n. v. FCC, 28 F3rd 1232 (D.C. Cir. 1994) (United States Telephone). As a final matter, Sainte's Response states that the NAL "failed to take into account the actual facts" of the "Quigley's Village" program because the Commission did not examine tapes of the program which had been submitted for review. DISCUSSION 10. As mentioned supra  2, in Children's Television Programming, 6 FCC Rcd at 2117-18, recon., 6 FCC Rcd at 5098, the Commission defined a program-length commercial as "a program associated with a product in which commercials for that product are aired." Neither the text and legislative history of the Children's Television Act, nor the Commission's Rules, orders and policy statements adopted to effectuate that legislation, contain any language to indicate that either Congress or the Commission ever considered, much less intended, the restrictive definition of "product" advanced by Sainte. In fact, the Commission adopted a definition of "program-length commercial" that is "precise," yet "clear, easy to understand and apply, and narrowly tailored." Id., 6 FCC Rcd at 2117-18; recon., 6 FCC Rcd at 5098-99. For these reasons, all of the articles offered for sale in the announcements in question are considered "products" associated with the "Quigley's Village" program. 11. Further, the program-length commercial policy is addressed to products associated with the program, not to "products separate from the program . . . ." Thus, Sainte's assertion that the videotapes offered for sale "are not products separate from the program" is irrelevant. The assertion that the videotapes offered for sale were copies of "Quigley's Village" programs underscores the fact that they were, and are, products associated with the program. In view of the foregoing discussion, Sainte's argument that the "Quigley's Village" announcements in question did not involve "products" within the meaning of the Commission's program-length commercial definition is without merit, and does not justify reduction of the forfeiture. 12. Nor is there merit in Sainte's argument that the program-length commercial nature of "Quigley's Village" should be excused since the program itself is an "educational" program or could be broadcast on a noncommercial station. Along this vein, moreover, the "program-related invitations" to which Sainte refers are not the type of special non-broadcast efforts to enhance the educational and informational value of children's programming sought by Congress in the Children's Television Act. In any event, television licensees are not authorized to violate the children's television commercial limitation rules and policies in the course of such "nonbroadcast efforts." Furthermore, the fact that the purchase of the program-related products offered in the "Quigley's Village" announcements in question may have required parental action does not, and cannot, create an exception to the children's television commercial limitation rules and policies. 13. With regard to whether station KCVU-TV had established an effective program to ensure compliance with the children's television commercial limits, Sainte argues that it "had every right to expect" that the producers of "Quigley's Village" "had proper procedures in place to comply" with the Commission's rule and policies limiting the amount of commercial matter in children's television programs. However, the Commission has frequently and 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. 14. Turning to Sainte's assertion that Sainte NAL must be set aside because it follows Forfeiture Policy Statement, Sainte NAL specifically recognized that United States Telephone had set aside Forfeiture Policy Statement, and stated that the $10,000 forfeiture amount "was reached after consideration of the factors set forth in  503(b)(2) of the Communications Act, and in particular, the following criteria: (1) the number of instances of commercial overages; (2) the length 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 gave for the overages." (Emphasis added.) Sainte NAL stated that, although these criteria had been developed in previous children's television commercial limitation cases decided under Forfeiture Policy Statement, the criteria were not inherently tied to Forfeiture Policy Statement; and that, "[w]ithout regard to" Forfeiture Policy Statement, the specified criteria were appropriate in analyzing violations of the children's television commercial limits. The Commission continues to believe that these criteria are appropriate in analyzing violations of the commercial limits during children's programming because 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. Accordingly, Sainte's assertion that Sainte NAL must be set aside because it follows Forfeiture Policy Statement is without merit. 16. Further, Sainte's assertion that Sainte NAL must be set aside because it cites Scripps Howard NAL, 9 FCC Rcd 2547(1994) (Scripps Howard NAL), which "was decided with reference to" Forfeiture Policy Statement and, therefore, "cannot be used as guidance in this matter" is incorrect. Scripps Howard NAL was cited to demonstrate that the $10,000 forfeiture assessed against KCVU-TV was consistent with forfeitures assessed against stations for children's television commercial limit violations of generally similar nature and magnitude. Scripps Howard NAL noted that the appeal of Forfeiture Policy Statement was pending, and stated that the forfeiture amount was reached after consideration of both Forfeiture Policy Statement and "the factors set forth in  503(b)(2) of the Communications Act." (Emphasis added.) Scripps Howard NAL, 9 FCC Rcd at 2547. The $10,000 forfeiture assessed against station KCVU-TV is consistent with forfeitures for children's television commercial limit violations of generally similar nature and magnitude which were assessed solely on the basis of the criteria set forth in  503(b)(2) of the Communications Act, without reference to Forfeiture Policy Statement. For instance, in Boston Celtics Broadcasting, a forfeiture of $10,000 was assessed for eight commercial overages, seven of which were program- length commercials; in WPIX, Inc., a forfeiture of $10,000 was assessed for nine commercial overages, five of which were program-length commercials. Accordingly, Sainte's assertion that Sainte NAL must be set aside because it cites Scripps Howard NAL is without merit. 17. Sainte also argues that, under the First Amendment, the Commission "must evaluate the motives of a broadcaster and program producer before classifying . . . a children's program as a program-length commercial." In Children's Television Programming, 6 FCC Rcd at 2117-18, the Commission specifically declined to adopt a definition of, or test for, program-length commercials based on the intent of the program producer or broadcaster. Some parties commenting in that proceeding urged the adoption of an intent-based standard. However, the Commission agreed with other commenting parties that a "test based on [the] producer's intent would be impermissibly vague and would tend to chill the creative process." Id. 6 FCC Rcd at 2117-18 & 2126 n.141. In contrast, the Commission stated that: [t]he definition of children's program-length commercial that we are now adopting -- a program associated with a product, in which commercials for that product are aired -- is clear, easy to understand and apply, and narrowly tailored. It 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. Removal of related commercial matter should help alleviate this confusion. Id. at 2118. 18. From the information contained in station KCVU-TV's renewal application and its July 20, 1994 letter, it was apparent that the "Quigley's Village" programs in question contained commercial advertisements for products related to the program and, therefore, constituted program- length commercials. Accordingly, it was unnecessary in the course of that NAL proceeding to review videotapes of "representative" "Quigley's Village" programs in order to determine that a violation had occurred. However, in the context of resolving the issues raised in Sainte's Response and in view of the repeated requests of Sainte, the videotape of two "representative" "Quigley's Village" programs was reviewed by the Commission's staff. This review demonstrated that, contrary to the assertions of Sainte, the "Quigley's Village" programs on the videotape contain precisely the kind of "intermixture of related program and commercial material" that the program-length commercial policy is intended to prohibit. Both the Kids Club solicitation and the multiple videotape offer consist of various "Quigley's Village" characters urging viewers to purchase products obviously related to the program. While these taped programs may not be precisely the same as those reported in connection with station KCVU-TV's renewal application, they have been submitted and described by Sainte as "representative" of the program. The format and content of the announcements in these "representative" "Quigley's Village" programs demonstrate that Sainte is incorrect in asserting that "[t]he Quigley's Village material is clearly not the `commercial matter' that Congress sought to prohibit." 19. In view of the foregoing discussion, the arguments and assertions contained in Sainte's Response to Sainte NAL do not justify or necessitate reduction or remission of the assessed forfeiture amount. 20. Accordingly, IT IS ORDERED THAT the Response to Sainte Limited (KCVU-TV), Chief, MMB NAL 1800E dated November 25, 1994, IS DENIED. IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), Sainte Limited, licensee of station KCVU-TV, Paradise, California, FORFEIT to the United States the sum of ten thousand dollars ($10,000) for willful and repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R. 73.670. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. With regard to this forfeiture proceeding, Sainte Limited may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, as summarized in the attachment to this Memorandum Opinion and Order. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau kcvu.rd Sainte Limited Licensee, KCVU-TV P.O. Box 4159 Modesto, CA 95352-4159 Richard E. Hildreth, Esq. Fletcher, Heald & Hildreth 11th Floor 1300 North 17th Street Rosslyn, VA 22209 $// SAINTE LIMITED, KCVU-TV (PARADISE, CA) DA 98-1670//$ $/ 300.503(b) FORFEITURES (NAL) /$ $/ 73.670 COMMERCIAL LIMITS ON CHILDREN'S PROGRAMS /$