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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
INTERNATIONAL FAMILY ) NAL/Acct. No. 200532080001
ENTERTAINMENT, INC. ) FRN No. 0010343986
)
OCEANIC-TIME WARNER CABLE OF ) File No. EB-03-IH-0745
HAWAII )
)
Operator of a Cable Television )
System in Oahu, Hawaii )
)
CHARTER COMMUNICATIONS, INC. ) File No. EB-04-IH-0232
)
Operator of a Cable Television )
System in Spring, Texas )
ORDER
Adopted: October 20, 2004 Released:
October 21, 2004
By the Chief, Enforcement Bureau:
1. The Enforcement Bureau has been investigating whether
Oceanic-Time Warner Cable of Hawaii (``Oceanic''), operator of a
cable television system in Oahu, Hawaii, and Charter
Communications, Inc. (``Charter''), operator of a cable
television system in Spring, Texas, aired commercial matter
during children's programming, in willful and/or repeated
violation of Section 76.225 of the Commission's rules.1 The
children's programming in question was provided to Oceanic and
Charter, as well as to other cable operators and DBS providers
nationwide, over the ABC Family Channel by International Family
Entertainment, Inc., a wholly-owned subsidiary of ABC Family
Worldwide, Inc.
2. The Bureau and the above-captioned parties have
negotiated the terms of a Consent Decree, a copy of which is
attached hereto and incorporated by reference. After reviewing
the terms of the Consent Decree, we find that the public interest
would be served by approving the Consent Decree and terminating
the captioned investigations involving Oceanic and Charter.
3 Accordingly, IT IS ORDERED, pursuant to Section 4(i) of
the Communications Act of 1934, as amended,2 that the attached
Consent Decree IS ADOPTED.
4. IT IS FURTHER ORDERED that the above-captioned
investigations ARE TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications
Commission, International Family Entertainment, Inc., Oceanic-
Time Warner Cable of Hawaii, and Charter Communications, Inc.
hereby enter into this Consent Decree for the purpose of
resolving and terminating certain investigations currently being
conducted by the Commission relating to possible violations of
the Children's Programming Commercial Limits by Oceanic-Time
Warner Cable of Hawaii and Charter Communications, Inc., and
potential future investigations regarding similar possible
violations by other Operators which also air ABC Family Channel.
2. For purposes of this Consent Decree, the following
definitions shall apply:
1)a. ``ABC Family Channel'' means the cable and
satellite television network currently known as
``ABC Family'' and/or ``ABC Family Channel.''
1)b. ``Act'' means the Communications Act of 1934,
as amended, 47 U.S.C. § 151 et seq.
1)c. ``Adopting Order'' means an order of the
Bureau adopting this Consent Decree, without any
modifications adverse to IFE, Oceanic, Charter or
other Operators.
1)d. ``Air'' means to send electronically any
visual images and/or audible sounds to subscribers
of a cable or direct broadcast satellite (``DBS'')
service system.
1)e. ``Any'' shall be construed to include the
word ``all,'' and the word ``all'' shall be
construed to include the word ``any.''
Additionally, the word ``or'' shall be construed
to include the word ``and,'' and the word ``and''
shall be construed to include the word ``or.''
The word ``each'' shall be construed to include
the word ``every,'' and the word ``every'' shall
be construed to include the word ``each.''
1)f. ``Audit Period'' means the period from July
1, 2003, through July 12, 2004.
1)g. ``Bureau'' means the FCC's Enforcement
Bureau.
1)h. ``Cable Operator'' has the definition
contained in 47 U.S.C. § 522(5).
1)i. ``Charter'' means Charter Communications,
Inc., a Cable Operator in Spring, Texas.
1)j. ``Children's Programming Commercial Limits''
means the requirements contained in 47 U.S.C. §
303a and 47 C.F.R. §§ 25.701(e) and 76.225.
1)k. ``Commercial Matter'' and ``Children's
Programming'' have the respective definitions
contained in 47 C.F.R. §§ 25.701(e) and 76.225.
1)l. ``Commission'' or ``FCC'' means the Federal
Communications Commission.
1)m. ``Effective Date'' means the date on which
the Bureau releases the Adopting Order.
1)n. ``Final Order'' means that, with respect to
the Adopting Order: (1) no request for stay or
similar request is pending, no stay is in effect,
the Adopting Order has not been vacated, reversed,
set aside, annulled or suspended, and any deadline
for filing such request that may be designated by
statute or regulation has passed; (2) no timely
petition for rehearing or reconsideration of the
Adopting Order, or protest of any kind, is pending
before the FCC and the time for filing any such
petition or protest is passed; (3) the FCC does
not have the Adopting Order under reconsideration
or review on its own motion and the time for such
reconsideration or review has passed; and (4) the
Adopting Order is not then under judicial review,
there is no notice of appeal or other application
for judicial review pending, and the deadline for
filing such notice of appeal or other application
for judicial review has passed.
1)o. ``IFE'' means International Family
Entertainment, Inc., the contracting entity for
ABC Family Channel and a wholly-owned subsidiary
of ABC Family Worldwide, Inc.
1)p. ``Inquiries'' means the Bureau's
investigations of alleged violations of the
Children's Programming Commercial Limits by
Oceanic and Charter that resulted in letters of
inquiry being sent by the Bureau to Oceanic and
Charter on June 16 and June 21, 2004,
respectively.
1)q. ``Oceanic'' means Oceanic-Time Warner Cable
of Hawaii, a Cable Operator in Oahu, Hawaii.
1)r. ``Operator'' means a provider of DBS service,
as that term is defined in 47 U.S.C.§
335(b)(5)(A), or a Cable Operator.
1)s. ``Parties'' means the Bureau, IFE, Oceanic,
and Charter collectively, and ``Party'' refers to
the Bureau, IFE, Oceanic, and Charter,
individually.
I. BACKGROUND
3. During the fourth calendar quarter of 2003, the
Commission's field offices conducted routine audits of certain
Cable Operators and television broadcast licensees of the
compliance by such entities with, respectively, the Children's
Programming Commercial Limits and the similar broadcast limits
found in 47 C.F.R. § 73.670. Those audits identified, among
other things, potential violations of the Children's Programming
Commercial Limits by Oceanic and Charter regarding programming on
ABC Family aired on November 3 and 8, 2003, respectively. On
June 16, 2004, the Bureau sent a letter of inquiry to Oceanic
directing Oceanic to provide information regarding the potential
violation on November 3, 2003. On June 21, 2004, the Bureau sent
a letter of inquiry to Charter directing Charter to provide
information regarding the potential violation on November 8,
2003.
4. During the course of their preparation of their
respective responses to these Bureau letters of inquiry, Oceanic
and Charter requested IFE to provide certain information, which
resulted in IFE's discovery that, in the ABC Family Channel
programming on the dates in question, commercials had aired for
products associated with such programs. Accordingly, on its own
volition, IFE conducted extensive internal and external audits of
Commercial Matter that aired during Children's Programming on ABC
Family Channel during the Audit Period. IFE determined that its
audits revealed that, during the more than one year-long period
of time comprising the Audit Period, there were 31 half-hour
episodes in which commercials for products associated with such
programs were inadvertently aired. According to IFE, its audits
revealed that such commercials were inserted into such programs
due primarily to problems with its computer system transition and
design and human error. IFE has further determined that its
audits revealed that the commercials in such half-hour programs
had not been sold with the understanding that they would air in
such related programs and that, even though the commercials aired
in related programs due to the errors noted above, IFE did not
benefit economically from such placements. According to IFE, its
audits revealed that this programming was aired as part of a
single national programming channel by Oceanic and Charter on
their respective cable systems in Oahu, Hawaii, and Spring,
Texas, and by other Operators, including Oceanic and Charter and
their affiliates, that aired ABC Family, collectively serving
more than approximately 86,900,000 households across the country.
IFE has voluntarily and timely reported the results of its audits
to the Bureau.
5. The Parties acknowledge that a consent decree to
address the results of IFE's audits is in the public interest.
The Parties agree that any forfeiture proceeding that might
result from a formal Bureau investigation into Oceanic, Charter,
or any other Operators' compliance with the Children's
Programming Commercial Limits during Children's Programming aired
on ABC Family Channel will be time-consuming and will require
substantial expenditure of public and private resources. In
order to conserve such resources, to resolve the Inquiries, and
to promote compliance with the Children's Programming Commercial
Limits, the Parties are entering into this Consent Decree, in
consideration of the mutual commitments made herein.
II. AGREEMENT
6. The Parties agree that the provisions of this Consent
Decree shall be subject to approval by the Bureau by
incorporation of such provisions by reference in an Adopting
Order.
7. The Parties agree that this Consent Decree shall become
effective on the date on which the Bureau releases the Adopting
Order and shall remain in effect for two (2) years after the
Effective Date. Upon release, the Adopting Order and this
Consent Decree shall have the same force and effect as any other
orders of the Bureau and any violation of the terms of this
Consent Decree shall constitute a violation of a Commission
order, entitling the Commission or the Bureau pursuant to
delegated authority, to exercise any rights and remedies
attendant to the enforcement of a Commission order.
8. IFE, Oceanic, and Charter each acknowledges that the
Commission has jurisdiction to enforce the Children's Programming
Commercial Limits against Operator carriage of network
programming. Nothing herein constitutes a waiver of any legal
rights to challenge, outside of the context of this proceeding,
the underlying validity of the Children's Programming Commercial
Limits, including whether the rules are consistent with the
Children's Television Act.
9. As part of the Adopting Order, the Bureau shall
terminate the Inquiries. From and after the Effective Date, in
the absence of the discovery of material new information not
previously disclosed to the Bureau by IFE, the Bureau shall not,
either on its own motion or in response to any petition, third-
party objection, complaint, or other information, initiate any
inquiries, investigations, forfeiture proceedings, hearings, or
other actions, formal or informal, against IFE, Oceanic, Charter,
or any other Operator for alleged violations of the Children's
Programming Commercial Limits with respect to Commercial Matter
that aired during Children's Programming on ABC Family Channel
prior to the Effective Date. The Bureau shall not use the
underlying facts or conduct relating to any of the foregoing for
any purpose relating to IFE, Oceanic, Charter, or any other
Operator that carried ABC Family prior to the Effective Date, and
shall treat all such matters as null and void for all purposes.
10. IFE represents that it has adopted, is currently in the
process of implementing, and agrees to abide by a compliance plan
(the ``Compliance Plan'') for the purpose of preventing the
airing of Commercial Matter violative of the Children's
Programming Commercial Limits. A summary of that plan is set
forth in the Attachment hereto. IFE agrees, to the extent it has
not already done so, to implement this Compliance Plan no later
than thirty (30) days after the Effective Date and to keep such
Compliance Plan in effect, where applicable, for two (2) years
after the Effective Date. With the exception of Paragraphs 4 and
5 of the Compliance Plan, which IFE may not change without the
Bureau's prior written consent, IFE reserves the right to revise
the Plan from time to time, provided that the Bureau shall be
given not less than thirty (30) days advance written notice of
any material revisions to the plan.
11. The Parties agree that retaining the audit results in
cable systems' public inspection files is consistent with the
Commission's rules. Accordingly, Oceanic and Charter agree to
timely place and retain for at least one year the audit results
made available by IFE pursuant to the Compliance Plan in the
public inspection files maintained by their cable systems,
including any cable systems operated by any of their parent,
affiliated or subsidiary companies, in a manner otherwise in
accordance with 47 C.F.R. §76.1703.
12. Within five (5) business days after the Adopting Order
becomes a Final Order, without any modifications to this Consent
Decree adverse to IFE, Oceanic, Charter or any other Operator
that carried ABC Family prior to the Effective Date, IFE shall
make a voluntary contribution to the United States Treasury in
the amount of Five Hundred Thousand Dollars ($500,000). The
payment must be made by check or similar instrument, payable to
the order of the Federal Communications Commission. The payment
must include the Acct. No. and FRN No. referenced above. Payment
by check or money order may be mailed to Forfeiture Collection
Section, Finance Branch, Federal Communications Commission, P.O.
Box 73482, Chicago, Illinois 60673-7482. Payment by overnight
mail may be sent to Bank One/LB 73482, 525 West Monroe, 8th Floor
Mailroom, Chicago, lllinois 60661. Payment by wire transfer may
be made to ABA Number 071000013, receiving bank Bank One, and
account number 1165259. With the exception, pursuant to
Paragraph 9 hereof, of any action taken as the result of the
Bureau's discovery of material new information not previously
disclosed to it, the Bureau agrees not to seek any further
voluntary or involuntary contributions or payments from IFE,
Oceanic, Charter, or any other Operator to the United States
Treasury for alleged violations of the Children's Programming
Commercial Limits with respect to Commercial Matter that aired
during Children's Programming on ABC Family Channel prior to the
Effective Date.
13. IFE, Oceanic and Charter each waives any and all rights
it may have, individually or together, to seek administrative or
judicial reconsideration, review, appeal or stay, or to otherwise
challenge or contest the validity of this Consent Decree and the
Adopting Order, provided no modifications are made to the Consent
Decree adverse to IFE, Oceanic, Charter or any other Operator
that carried ABC Family Channel prior to the Effective Date. If
the Bureau, the Commission, or the United States acting on its
behalf, brings a judicial action to enforce the terms of the
Adopting Order or this Consent Decree, or both, IFE, Oceanic or
Charter will not contest the validity of this Consent Decree or
of the Adopting Order. If IFE, Oceanic or Charter brings a
judicial action to enforce the terms of the Adopting Order or
this Consent Decree, or both, neither the Bureau, the Commission
nor the United States will contest the validity of this Consent
Decree or of the Adopting Order. IFE, Oceanic and Charter retain
the right to challenge the Bureau or the Commission's
interpretation of this Consent Decree or interpretation of any
terms contained therein. Any collection action by the Commission
or any other governmental entity to obtain the payment of the
voluntary contribution to the United States Treasury provided for
in Paragraph 12 of this Consent Decree shall be maintained solely
against IFE. Nothing herein shall restrict IFE, Oceanic or
Charter from challenging on any basis, any future enforcement
action relating to the Children's Programming Commercial Limits,
other than actions to enforce the Adopting Order or this Consent
Decree.
14. The Parties agree that this Consent Decree and IFE's
voluntary contribution are for settlement purposes only and do
not constitute, including for the purpose of completing any
existing Commission form or otherwise, an admission, denial,
adverse finding, adverse final action, adverse adjudication on
the merits or waiver of rights except as otherwise expressly set
forth herein, including without limitation the rights reserved in
Paragraph 8 hereof, or a factual or legal determination regarding
any compliance or noncompliance by IFE, Oceanic, Charter or any
other Operator that carried ABC Family Channel prior to the
Effective Date, with the Children's Programming Commercial
Limits.
15. In the event that this Consent Decree is rendered
invalid in any court of competent jurisdiction, it shall become
null and void and may not be used in any manner in any legal
proceeding.
16. IFE, Oceanic and Charter each hereby agrees to waive
any claims they may otherwise have under the Equal Access to
Justice Act, 5 U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq.,
relating to the matters addressed in this Consent Decree.
17. Each Party represents and warrants to the other that it
has full power and authority to enter into this Consent Decree.
18. This Consent Decree may be executed in counterparts.
(This area intentionally left blank)
FEDERAL COMMUNICATIONS COMMISSION
ENFORCEMENT BUREAU
By: _________________________________________
David H. Solomon, Chief
Date: ________________________________
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: _______________________________________
Jewell Engstrom, Vice President
Date:
OCEANIC-TIME WARNER CABLE OF HAWAII
By: _______________________________________
Nate Smith, President
Date:
CHARTER COMMUNICATIONS, INC.
By: _______________________________________
Thomas J. Hearity, Senior Vice President and
Associate General Counsel
Date:
ATTACHMENT
COMPLIANCE PLAN OF
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
IFE has adopted, and is implementing, a Compliance Plan for
the purpose of preventing the airing of Commercial Matter that is
violative of the Children's Programming Commercial Limits. This
Compliance Plan consists of the following five components:
1. IFE will conduct formal training on the Children's
Programming Commercial Limits for all ABC Family
Channel employees in the traffic department who
materially participate in scheduling commercials during
Children's Programming. Such training will be provided
to all such employees no later than thirty (30) days
after the Effective Date of this Consent Decree, and on
an annual basis thereafter while this Compliance Plan
remains in effect. Training also will be provided to
all such new employees promptly after they commence
their duties. Such training shall include instruction
relating to not only the fixed time limits on
Commercial Matter during Children's Programming, but
also to program-length commercial issues arising from
tie-ins between program content and characters, and
host-selling.
2. IFE will assign responsibilities for ensuring
compliance with the Children's Programming Commercial
Limits to additional personnel. Before Children's
Programming airs on ABC Family Channel, standards and
practices personnel will review the scheduling of each
commercial within each children's program to ensure
compliance with the Children's Programming Commercial
Limits. In addition, the office of ABC Family
Channel's Executive Director of Traffic Services will
be responsible for regularly reviewing the daily
Children's Programming schedule, including a listing of
all commercials scheduled during such programming.
Finally, ABC Family Channel personnel responsible for
scheduling commercials during Children's Programming
aired on ABC Family Channel will be required to
initial a task list each day confirming that they have
performed quality control checks intended to ensure
compliance with the Children's Programming Commercial
Limits.
3. IFE has made modifications to the computer system it
uses to schedule Commercial Matter designed to minimize
the potential for human error in the commercial
scheduling process and to ensure compliance with the
Children's Programming Commercial Limits. In the
future, as it deems appropriate, IFE will seek to make
further improvements to the computer system, including
upgrades to the existing system or the possible
migration to a new computer system.
4. For two years after the Effective Date, IFE will
conduct random audits, at least once every six (6)
months, of Commercial Matter that airs during
Children's Programming. Each audit will consist of
reviewing, in the official program logs of ABC Family
Channel, all Commercial Matter that aired during
Children's Programming on ABC Family Channel during a
randomly selected three-week period during the
preceding six (6) months. Within thirty (30) days of
the completion of each such audit, IFE will report in
writing to the Bureau the results of the audit,
including any violations of the Children's Programming
Commercial Limits discovered during the audited period
and the remedial steps taken to ensure future
compliance with the Children's Programming Commercial
Limits. The results of such audits will be made
available within thirty (30) days of their completion
to all Operators that air ABC Family Channel, on an
Internet web site maintained for and accessible to
Cable Operators affiliated with ABC Family Channel.
IFE will, within thirty (30) days of the Effective Date
of this Consent Decree, notify all Operators that air
the ABC Family Channel, via e-mail if available, of the
address and existence of such an Internet web site,
that it is maintained for and is accessible to
Operators affiliated with ABC Family Channel and that
the results of each audit will be made available on
such web site. IFE will also deliver hard copies of
such audit results via first-class U.S. mail to Oceanic
at the following address: Oceanic-Time Warner Cable of
Hawaii, c/o Time Warner Cable, 290 Harbor Drive,
Stamford, Connecticut 06904, Attn: Lorraine Aglora, Law
Department; and to Charter at the following address:
Charter Communications, Vice President Programming,
6399 S. Fiddler's Green Circle, 6th Floor, Greenwood
Village, Colorado 80111.
5. For the two-year period that this Compliance Plan
remains in effect, in the event that IFE's audits
reveal that the amount of Commercial Matter that aired
during an ABC Family Channel program exceeded the
Children's Programming Commercial Limits, for each such
instance, IFE will reduce the amount of Commercial
Matter to be aired during a single subsequent airing of
the same or similar ABC Family Channel program during
the same or a comparable time period in an amount equal
to the amount of time of such excess Commercial Matter.
Such subsequent airing will occur within sixty (60)
days of submission of the audit results to the Bureau
reporting the discovery of such excess Commercial
Matter. For the two-year period that this Compliance
Plan remains in effect, in the event IFE's audits
reveal the airing of an ABC Family Channel program
associated with a product in which a commercial for
that product had aired during such program, for each
such instance, IFE will subsequently air the same or
similar ABC Family Channel program during the same or a
comparable time period without any Commercial Matter.
Such subsequent airing will occur within sixty (60)
days of submission of the audit results to the Bureau
reporting the discovery of the airing of the ABC Family
Channel program associated with a product in which a
commercial for that product had aired. In the event of
the reduction or elimination of Commercial Matter from
its programming pursuant to this Paragraph 5, IFE will
not authorize any Operator to insert Commercial Matter
in excess of that allowed pursuant to the agreement
between such Operator and IFE and the Children's
Programming Commercial Limits, had such reduction or
elimination not been made.
_________________________
1 47 C.F.R. § 76.225
2 47 U.S.C. § 154(i).