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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
VIACOM INTERNATIONAL INC. ) NAL/Acct. No. 200532080002
) File No. EB-04-IH-0341
) FRN No. 0003475902
)
COXCOM, INC. ) File No. EB-03-IH-0746
)
Operator of a Cable Television )
System in San Diego, California )
ORDER
Adopted: October 20, 2004 Released:
October 21, 2004
By the Chief, Enforcement Bureau:
1. The Enforcement Bureau has been investigating whether
CoxCom, Inc. (``Cox''), operator of a cable television system in
San Diego, California, 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 Cox, as well as to other cable operators
and DBS providers nationwide, over the Nickelodeon Channel by
Viacom International Inc. (``Viacom'').
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 investigation involving Cox.
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
investigation IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications
Commission, Viacom International Inc. and CoxCom, Inc. hereby
enter into this Consent Decree for the purpose of resolving and
terminating that certain investigation currently being conducted
by the Enforcement Bureau relating to possible violations of the
Children's Programming Commercial Limits by CoxCom, Inc. d/b/a
Cox Communications San Diego, and potential future investigations
regarding similar possible violations by other Operators which
also air Nickelodeon.
2. For purposes of this Consent Decree, the following
definitions shall apply:
1)a. ``Act'' means the Communications Act of 1934, as
amended, 47 U.S.C. § 151 et seq.
1)b. ``Adopting Order'' means an order of the Bureau,
adopting this Consent Decree, without any modifications
adverse to Viacom, Cox or other Operators.
1)c. ``Air'' means to send electronically any visual images
and/or audible sounds to subscribers of a cable or direct
broadcast satellite (``DBS'') system.
1)d. ``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)e. ``Bureau'' means the FCC's Enforcement Bureau.
1)f. ``Cable Operator'' has the definition contained in 47
U.S.C. § 522(5).
1)g. ``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)h. ``Commercial Matter'' and ``Children's Programming''
have the respective definitions contained in 47 C.F.R. §§
25.701(e) and 76.225.
1)i. ``Commission'' or ``FCC'' means the Federal
Communications Commission.
1)j. ``Cox'' means CoxCom, Inc. d/b/a Cox Communications San
Diego, a Cable Operator in San Diego, California.
1)k. ``Effective Date'' means the date on which the Bureau
releases the Adopting Order.
1)l. ``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)m. ``Inquiry'' means the Bureau's investigation of alleged
violations of the Children's Programming Commercial Limits
by Cox that resulted in the Bureau's letters of inquiry to
Cox on June 16 and July 27, 2004, and to Viacom on August
10, 2004.
1)n. ``Inquiry Period'' means the period from October 1,
2003, through August 10, 2004.
1)o. ``Nickelodeon'' means The Nickelodeon Channel, a cable
and satellite programming channel owned and operated by
Nickelodeon, a division of MTV Networks, which is, in turn,
a division of Viacom.
1)p. ``Operator'' means a provider of DBS service, as
defined in 47 U.S.C. §§ 335(b)(5)(A), or a Cable Operator.
1)q. ``Parties'' means the Bureau, Viacom, and Cox
collectively, and ``Party'' refers to the Bureau, Viacom,
and Cox, individually.
1)r. ``Viacom'' means Viacom International Inc.
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 Cox regarding programming on Nickelodeon
aired on November 1 and 8, 2003. On June 16, 2004, the Bureau
sent a letter of inquiry to Cox directing it to provide
information regarding the potential violations and, on July 27,
the Bureau sent a supplemental letter of inquiry to Cox. On
August 10, the Bureau sent a related letter of inquiry to Viacom.
4. During the course of its preparation of its responses
to these Bureau letters of inquiry, Cox requested Viacom to
provide certain information. In response to the Bureau's initial
letter of inquiry, Cox also provided certifications from
Nickelodeon and MTV Networks, which Cox represents to have
maintained in its public files pursuant to the Commission's
rules. These certifications stated that the Nickelodeon
programming at issue in the Bureau's inquiry complied with the
commercial limits set forth in 47 C.F.R. § 76.225 taking into
account the one minute of insertion time allowed to distributors
such as Cox. Subsequently, and in response to Cox's request and
the Bureau's August 10 letter of inquiry, Viacom conducted
extensive internal and external analysis to identify and quantify
Commercial Matter that aired during Children's Programming on
Nickelodeon during the Inquiry Period. While Viacom made the
certifications in the good faith belief that it was in compliance
with the rules, this further analysis determined that, during
that period, there were 591 instances in which Nickelodeon
programs inadvertently contained Commercial Matter in excess of
the minutes-per-hour limitations imposed by the Children's
Programming Commercial Limits, representing the equivalent of
1,021 30-second spots (collectively, the ``Overages''). In
addition, Viacom reported that, by its estimate, during the
Inquiry Period, there were approximately 145 instances of
programs aired in which commercials for products associated with
the program were inadvertently aired (collectively, the ``Program
Length Commercials''). Viacom's analysis revealed that the
Overages and Program Length Commercials resulted due to flawed
internal procedures and human error. In the case of the
Overages, Viacom received consideration or other benefits from
the advertising that aired. Although it did not affect the
number of apparent Overages, the analysis also found that
Nickelodeon aired less Commercial Matter than the Commission's
rules allow in 85 percent of the hours examined in the Inquiry
Period. In the case of the Program Length Commercials, the
analysis revealed that the commercials were not sold with the
understanding that Nickelodeon would air them in such related
programs; the commercials aired in related programs due to the
errors noted above. According to Viacom, this Nickelodeon
programming was carried as part of a single national programming
channel, not only by Cox over its various cable systems, but also
by virtually all Operators that air the channel. These Operators
collectively serve in excess of 85 million households throughout
the country.
5. The Parties acknowledge that a consent decree to
address the results of Viacom's analysis is in the public
interest. The Parties agree that any forfeiture proceeding that
might result from a formal Bureau investigation into Cox or any
other Operator's compliance with the Children's Programming
Commercial Limits during Children's Programming aired on
Nickelodeon will be time-consuming and will require substantial
expenditure of public and private resources. In order to
conserve such resources, to resolve the Inquiry, and to promote
compliance by Cox and other Operators 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 Commission, 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. Viacom and Cox 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 of 1990.
9. As part of the Adopting Order, the Bureau shall
terminate the Inquiry. From and after the Effective Date, in the
absence of the discovery of material new information not
previously disclosed to the Bureau by Viacom, 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 Viacom, Cox or any
other Operator for alleged violations of the Children's
Programming Commercial Limits with respect to Commercial Matter
aired during Children's Programming on Nickelodeon 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 Viacom, Cox or any other Operator that carried Nickelodeon
prior to the Effective Date, and shall treat all such matters as
null and void for all purposes.
10. Viacom 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. Viacom agrees, to the extent it
has not already done so, to implement this Compliance Plan within
thirty (30) days of 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 Viacom may not change without the
Bureau's prior written consent, Viacom reserves the right to
revise the Compliance Plan from time to time, provided that,
during the term of this Consent Decree, the Bureau shall be given
not less than thirty (30) days advance written notice of any
material revisions to the Compliance Plan.
11. The Parties agree that retaining the audit results in
cable systems' public inspection files is consistent with the
Commission's rules. Accordingly, Cox agrees to timely place and
retain for a period of at least one year the inspection results
made available by Viacom pursuant to the Compliance Plan in the
public inspection files maintained by its cable systems,
including any cable systems operated by any of its 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 Viacom, Cox or any other Operator that carried
Nickelodeon prior to the Effective Date, Viacom shall make a
voluntary contribution to the United States Treasury in the
amount of One Million Dollars ($1,000,000). 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, Illinois 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
Commission'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 Viacom,
Cox, or any other Operator to the United States Treasury for
alleged violations of the Children's Programming Commercial
Limits with respect to Commercial Matter aired during Children's
Programming on Nickelodeon prior to the Effective Date.
13. With regard to each Nickelodeon program aired during
the Inquiry Period that contained an Overage, Viacom shall reduce
the amount of Commercial Matter aired during the same or a
similar Nickelodeon program during the same or a comparable time
period in an amount equal to the amount of time of such excess
Commercial Matter, up to the equivalent of 1,021 30-second spots,
the estimated total of the Overages. All such airings will occur
within ten (10) months of the Effective Date. In the event of
any reduction or elimination by Viacom of Commercial Matter from
its programming pursuant to this Paragraph 13, Viacom shall
direct each Operator to not insert Commercial Matter in the
program in excess of that allowed pursuant to the agreement
between such Operator and Viacom and the Children's Programming
Commercial Limits, had such reduction or elimination not been
made.
14. Viacom and Cox 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 Viacom, Cox or any other Operator that carried
Nickelodeon 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, Viacom and Cox will not contest the
validity of this Consent Decree or of the Adopting Order. If
Viacom or Cox brings a judicial action to enforce the terms of
the Adopting Order or this Consent Decree, or both, neither the
Commission nor the United States will contest the validity of
this Consent Decree or of the Adopting Order. Viacom and Cox
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 Viacom. Nothing herein shall restrict Viacom or Cox 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.
15. The Parties agree that this Consent Decree and Viacom'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 legal 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
Viacom, Cox, or any other Operator that carried Nickelodeon prior
to the Effective Date, with the Children's Programming Commercial
Limits.
16. 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.
17. Viacom and Cox 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.
18. Each Party represents and warrants to the other that it
has full power and authority to enter into this Consent Decree.
19. This Consent Decree may be executed in counterparts.
FEDERAL COMMUNICATIONS COMMISSION
ENFORCEMENT BUREAU
By: _____________________________________
David H. Solomon, Chief
Date: ______________________________
VIACOM INTERNATIONAL INC.
By: ______________________________________
Mark Morril, Vice President, Deputy General
Counsel and Assistant Secretary
Date:
COXCOM, INC.
By: ______________________________________
James A. Hatcher, Director
Date: ATTACHMENT
COMPLIANCE PLAN OF NICKELODEON
Nickelodeon 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. Nickelodeon will conduct formal training on the Children's
Programming Commercial Limits for all Nickelodeon 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 ands characters, and host-selling.
2. Nickelodeon will assign responsibilities for ensuring
compliance with the Children's Programming Commercial Limits
to additional personnel. Before Children's Programming airs
on Nickelodeon, standards and practices personnel will
review the content of each commercial within each instance
of Children's Programming to ensure compliance with the
Children's Programming Commercial Limits. In addition,
Nickelodeon's traffic department will be responsible for
regularly reviewing the daily Children's Programming
schedule, including a listing of all commercials scheduled
during such programming. Finally, Nickelodeon personnel
responsible for scheduling commercials during Children's
Programming aired on Nickelodeon will be required to approve
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. Nickelodeon 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, Nickelodeon 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 (2) years after the Effective Date, Nickelodeon will
conduct random inspections, at least once every six (6)
months, of Commercial Matter aired during Children's
Programming. Each inspection will consist of reviewing, in
the official program logs of Nickelodeon, all Commercial
Matter aired during Children's Programming on Nickelodeon
during a randomly selected three-week period during the
preceding six (6) months. Within thirty (30) days of the
completion of each such inspection, Nickelodeon will report
in writing to the Bureau the results of the inspection,
including any violations of the Children's Programming
Commercial Limits discovered during the period reviewed and
the remedial steps taken to ensure future compliance with
the Children's Programming Commercial Limits. Nickelodeon
will make the results of such inspections available to
Operators that air Nickelodeon on the same Internet web site
on which it periodically provides such Operators with
certifications regarding the compliance of Nickelodeon
programming with the Children's Programming Commercial
Limits . Nickelodeon has placed a notice on that web site
advising all such Operators that it will be conducting such
inspections and that it will make the results of each such
inspections available to them on that web site for their
review and placement in their respective system public
inspection files. Nickelodeon will also deliver a hard copy
of such audit results via facsimile or mail to Cox at the
following address: CoxCom, Inc., 1400 Lake Hearn Drive,
N.E., Atlanta, Georgia 30319, Attn: James A. Hatcher,
Esquire, Telecopier: (404) 843-5845.
5. For the two-year period that this Compliance Plan remains in
effect, in the event that Nickelodeon's inspection required
under Paragraph 4 reveals that the amount of Commercial
Matter aired during a Nickelodeon program exceeded the
Children's Programming Commercial Limits, for each such
instance, Nickelodeon will reduce the amount of Commercial
Matter to be aired during a single subsequent airing of the
same or similar Nickelodeon 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 inspection 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
Nickelodeon's inspection reveals the airing of a Nickelodeon
program associated with a product in which a commercial for
that product was aired during such program, for each such
instance, Nickelodeon will air subsequently the same or
similar Nickelodeon program during the same or a comparable
time period without any Commercial Matter. Such subsequent
airing will occur within sixty (60) days of the submission
of the inspection results to the Bureau reporting the
discovery of the airing of the Nickelodeon program
associated with a product in which a commercial for that
product was aired. In the event of the reduction or
elimination of Commercial Matter from its programming
pursuant to this Paragraph 5, Nickelodeon will not authorize
any Operator to insert Commercial Matter in the program in
excess of that allowed pursuant to the agreement between
such Operator and Nickelodeon 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).