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1. Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
)
ABC, INC. ) File Nos. EB-02-IH-0554
) NAL/Acct. No. 200432080009
Licensee of Station WDRQ(FM) ) FRN 0003-4534-95
Detroit, Michigan ) Facility ID # 70040
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: December 5, 2003 Released: December
8, 2003
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture, we find ABC, Inc. (``ABC''), licensee of
Station WDRQ(FM), Detroit, Michigan, apparently liable for
a monetary forfeiture in the amount of Four Thousand
Dollars ($4,000.00) for a violation of section 73.1216 of
the Commission's rules,1 which requires licensees to
broadcast fully and accurately the material terms of a
contest. We find that ABC broadcast a contest, ``War of
the Sexes,'' without disclosing a material term of the
contest, i.e., that the movie prize passes that it awarded
to its contest winners did not guarantee theater admission.
II. BACKGROUND
2. On June 5, 2002 the Commission received a
complaint filed by Mr. Joe Lucker. According to the
complaint, on April 29, 2002, Mr. Lucker participated in a
contest called ``War of the Sexes,'' which was broadcast
over Station WDRQ(FM). During the contest, one male and
one female caller were selected to answer trivia questions.
Mr. Lucker won the contest and was awarded two movie prize
passes to the premiere showing of the film ``Spiderman,''
valid only for the evening of May 1, 2002. Mr. Lucker was
unable to redeem the movie prize passes on that day,
however, due to large crowds at the theater that evening.
3. On June 25, 2002, the Investigations and Hearings
Division of the Enforcement Bureau sent a letter of inquiry
to ABC.2 Because ABC failed to respond, the Division sent
another letter of inquiry to ABC on August 9, 2002,3 to
which ABC responded on August 30, 2002.4 The
Investigations and Hearings Division sent a subsequent
letter of inquiry to ABC requesting additional information
on October 22, 2002.5 ABC responded by letter dated
November 21, 2002.6
4. ABC does not dispute that Mr. Lucker won the movie
passes or that he was unable to see ``Spiderman'' on the
evening of May 1, 2002.7 It argues, however, that WDRQ(FM)
personnel informed Mr. Lucker by telephone when it awarded
him the prize and when it later provided him the passes
that admission to the movie was not guaranteed. ABC also
contends that the passes themselves contain a legend
indicating that the admission was not guaranteed.8 ABC
further submits that, even though Mr. Lucker did not get in
to see ``Spiderman'' that evening, it offered him tickets
to another movie playing that night, gave him several
WDRQ(FM) promotional items, and purchased tickets for him
to see ``Spiderman'' at a later date.9
5. ABC acknowledges that WDRQ(FM) did not broadcast
announcements in connection with the ``War of the Sexes''
promotion indicating that prizes of equal value may be
substituted or that the passes awarded did not guarantee
admission to the movie.10 ABC notes that, subsequent to
the incident involving Mr. Lucker, listeners were told on
the air about the limitations of movie premiere passes,
including the fact that seating capacity was limited and
that a pass did not guarantee admission. ABC further
relates that the station now airs generic contest rules
that note that the station reserves the right to substitute
a prize for equal or greater value in the event that the
announcement prize is unavailable.11
6. ABC submits that WDRQ(FM) took several corrective
actions to ensure that Mr. Lucker was treated fairly,
including offering him tickets to another movie that night
and other promotional items.12
III. DISCUSSION
7. Under section 503(b)(1) of the Act, any person who
is determined by the Commission to have willfully or
repeatedly failed to comply with any provision of the Act
or any rule, regulation, or order issued by the Commission
shall be liable to the United States for a monetary
forfeiture penalty.13 In order to impose such a forfeiture
penalty, the Commission must issue a notice of apparent
liability, the notice must be received, and the person
against whom the notice has been issued must have an
opportunity to show, in writing, why no such forfeiture
penalty should be imposed.14 The Commission will then
issue a forfeiture if it finds by a preponderance of the
evidence that the person has violated the Act or a
Commission rule.15 As we set forth in greater detail
below, we conclude under this standard that ABC is
apparently liable for a forfeiture for its apparent willful
and repeated violations of section 73.1216 of the
Commission's rules.
8. Section 73.1216 of the Commission's rules
provides:
A licensee that broadcasts or advertises
information about a contest it conducts shall
fully and accurately disclose the material terms
of the contest, and shall conduct the contest
substantially as announced or advertised. No
contest description shall be false, misleading or
deceptive with respect to any material term.
Note 1 to that rule provides that the material terms of the
contest include ``the extent, nature and value of prizes''
and ``the basis for valuation of the prizes.'' Note 2 to
the rule states:
In general, the time and manner of disclosure of
the material terms of a contest are within the
licensee's discretion. However, the obligation to
disclose the material terms arises at the time the
audience is first told how to enter or participate
and continues thereafter. The material terms
should be disclosed periodically by announcements
broadcast on the station conducting the contest,
but need not be enumerated each time an
announcement is sufficient. In addition to the
required broadcast announcements, disclosure of
material terms may be made in a non-broadcast
manner.
9. In this case, it appears that ABC violated section
73.1216 of the Commission's rules by not disclosing during
any of its broadcast announcements a material term of the
``War of the Sexes'' contest, i.e., the fact that the movie
prize passes did not guarantee admission to the theater.
Although the contestants were apparently informed after the
prizes were awarded that the movie passes did not guarantee
admission, ABC's failure to broadcast fully and accurately
the nature and value of the prize is a clear violation of
the rule.16 Licensees, as public trustees, have the
affirmative obligation to prevent the broadcast of false,
misleading or deceptive contest announcements.17 A
broadcast announcement concerning a contest is false,
misleading or deceptive ``if the net impression of the
announcement has a tendency to mislead the public.''18
Accordingly, the Commission has repeatedly held that
``licensees are `responsible for broadcasting accurate
statements as to the nature and value of contest prizes,
and will be held accountable for any announcement which
tends to mislead the public.'''19 WDRQ(FM) admittedly
failed to broadcast the nature and value of its contest
prize - the fact that the movie prize pass did not
guarantee admission to the film. Although WDRQ(FM) later
took remedial actions, these actions to not absolve ABC
from liability and the proposed forfeiture penalty.20
10. Based upon the evidence before us, we find that
ABC apparently willfully21 violated section 73.1216 of the
Commission's rules. The Commission's Forfeiture Policy
Statement sets a base forfeiture amount of $4,000.00 for
failure to broadcast fully and accurately the material
terms of a contest.22 In assessing the monetary forfeiture
amount, we must take into account the statutory factors set
forth in Section 503(b)(2)(D) of the Act,23 which include
the nature, circumstances, extent, and gravity of the
violation, and with respect to the violator, the degree of
culpability, any history of prior offenses, ability to pay,
and other such matters as justice may require. After
considering the record, the factors contained in section
503(b)(2)(D) of the Act, 47 U.S.C. §503(b)(2)(D), and the
Forfeiture Policy Statement, we believe that a $4,000
forfeiture is appropriate in this case.
IV. ORDERING CLAUSES
11. ACCORDINGLY, IT IS ORDERED, pursuant to section
503(b) of the Communications Act of 1934, as amended,24 and
sections 0.111, 0.311, and 1.80 of the Commission's
rules,25 that ABC, Inc. is hereby NOTIFIED of its APPARENT
LIABILITY FOR FORFEITURE in the amount of Four Thousand
Dollars ($4,000.00) for willfully violating section 73.1216
of the Commission's rules.
12. IT IS FURTHER ORDERED, pursuant to section 1.80
of the Commission's rules, that within thirty (30) days of
the release of this Notice, ABC, Inc. SHALL PAY the full
amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
forfeiture.
13. Payment of the forfeiture may be made by mailing a
check or similar instrument, payable to the order of the
Federal Communications Commission, to the Forfeiture
Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482.
The payment MUST INCLUDE the FCC Registration Number (FRN)
referenced above and also should note the NAL/Acct. No.
referenced above.
14. The response, if any, must be mailed to Maureen F.
Del Duca, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W, Room 3-B433, Washington, D.C. 20554 and
MUST INCLUDE the NAL/Acct. No. referenced above.
15. The Commission will not consider reducing or
canceling a forfeiture in response to a claim of inability
to pay unless the respondent submits: (1) federal tax
returns for the most recent three-year period; (2)
financial statements prepared according to generally
accepted accounting practices (``GAAP''); or (3) some other
reliable and objective documentation that accurately
reflects the respondent's current financial status. Any
claim of inability to pay must specifically identify the
basis for the claim by reference to the financial
documentation submitted.
16. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan
should be sent to: Chief, Revenue and Receivables
Operations Group, 445 12th Street, S.W., Washington, D.C.
20554.26
17. Under the Small Business Paperwork Relief Act of
2002, Pub L. No. 107-198, 116 Stat. 729 (June 28, 2002),
the FCC is engaged in a two-year tracking process regarding
the size of entities involved in forfeitures. If you
qualify as a small entity and if you wish to be treated as
a small entity for tracking purposes, please so certify to
us within thirty (30) days of this NAL, either in your
response to the NAL or in a separate filing to be sent to
the Investigations and Hearings Division. Your
certification should indicate whether you, including your
parent entity and its subsidiaries, meet one of the
definitions set forth in the list provided by the FCC's
Office of Communications Business Opportunities (OCBO) set
forth in Attachment A of this Notice of Apparent Liability.
This information will be used for tracking purposes only.
Your response or failure to respond to this question will
have no effect on your rights and responsibilities pursuant
to Section 503(b) of the Communications Act. If you have
questions regarding any of the information contained in
Attachment A, please contact OCBO at (202) 418-0990.
18. IT IS FURTHER ORDERED that a copy of this Notice
shall be sent, by Certified Mail/Return Receipt Requested,
to David Cohen, Esquire, at ABC, Inc., Law & Regulation
Department, 77 West 66th Street; New York, NY 10023.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
October 2002
ATTACHMENT A
FCC List of Small Entities
As described below, a ``small entity'' may be a small
organization,
a small governmental jurisdiction, or a small business.
(1) Small Organization
Any not-for-profit enterprise that is independently owned
and operated and
is not dominant in its field.
(2) Small Governmental Jurisdiction
Governments of cities, counties, towns, townships, villages,
school districts, or
special districts, with a population of less than fifty
thousand.
(3) Small Business
Any business concern that is independently owned and
operated and
is not dominant in its field, and meets the pertinent size
criterion described below.
Industry Type Description of Small Business
Size Standards
Cable Services or Systems
Special Size Standard -
Cable Systems Small Cable Company has 400,000
Subscribers Nationwide or Fewer
Cable and Other Program
Distribution $12.5 Million in Annual
Receipts or Less
Open Video Systems
Common Carrier Services and Related Entities
Wireline Carriers and
Service providers
1,500 Employees or Fewer
Local Exchange Carriers,
Competitive Access
Providers, Interexchange
Carriers, Operator Service
Providers, Payphone
Providers, and Resellers
Note: With the exception of Cable Systems, all size
standards are expressed in either millions of dollars or
number of employees and are generally the average annual
receipts or the average employment of a firm. Directions
for calculating average annual receipts and average
employment of a firm can be found in
13 CFR 121.104 and 13 CFR 121.106, respectively.
International Services
International Broadcast
Stations
$12.5 Million in Annual
Receipts or Less
International Public Fixed
Radio (Public and Control
Stations)
Fixed Satellite
Transmit/Receive Earth
Stations
Fixed Satellite Very Small
Aperture Terminal Systems
Mobile Satellite Earth
Stations
Radio Determination
Satellite Earth Stations
Geostationary Space Stations
Non-Geostationary Space
Stations
Direct Broadcast Satellites
Home Satellite Dish Service
Mass Media Services
Television Services
$12 Million in Annual Receipts
or Less
Low Power Television
Services and Television
Translator Stations
TV Auxiliary, Special
Broadcast and Other Program
Distribution Services
Radio Services
$6 Million in Annual Receipts
or Less
Radio Auxiliary, Special
Broadcast and Other Program
Distribution Services
Multipoint Distribution Auction Special Size Standard -
Service Small Business is less than
$40M in annual gross revenues
for three preceding years
Wireless and Commercial Mobile Services
Cellular Licensees
1,500 Employees or Fewer
220 MHz Radio Service -
Phase I Licensees
220 MHz Radio Service - Auction special size standard -
Phase II Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
controlling principals)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
controlling principals)
700 MHZ Guard Band Licensees
Private and Common Carrier
Paging
Broadband Personal
Communications Services 1,500 Employees or Fewer
(Blocks A, B, D, and E)
Broadband Personal Auction special size standard -
Communications Services Small Business is $40M or less
(Block C) in annual gross revenues for
three previous calendar years
Very Small Business is average
gross revenues of $15M or less
for the preceding three
calendar years (includes
affiliates and persons or
entities that hold interest in
such entity and their
affiliates)
Broadband Personal
Communications Services
(Block F)
Narrowband Personal
Communications Services
Rural Radiotelephone Service 1,500 Employees or Fewer
Air-Ground Radiotelephone
Service
800 MHz Specialized Mobile Auction special size standard -
Radio Small Business is $15M or less
average annual gross revenues
for three preceding calendar
years
900 MHz Specialized Mobile
Radio
Private Land Mobile Radio 1,500 Employees or Fewer
Amateur Radio Service N/A
Aviation and Marine Radio
Service 1,500 Employees or Fewer
Fixed Microwave Services
Small Business is 1,500
Public Safety Radio Services employees or less
Small Government Entities has
population of less than 50,000
persons
Wireless Telephony and
Paging and Messaging 1,500 Employees or Fewer
Personal Radio Services N/A
Offshore Radiotelephone 1,500 Employees or Fewer
Service
Wireless Communications Small Business is $40M or less
Services average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
39 GHz Service
Auction special size standard
(1996) -
Multipoint Distribution Small Business is $40M or less
Service average annual gross revenues
for three preceding calendar
years
Prior to Auction -
Small Business has annual
revenue of $12.5M or less
Multichannel Multipoint
Distribution Service $12.5 Million in Annual
Receipts or Less
Instructional Television
Fixed Service
Auction special size standard
(1998) -
Local Multipoint Small Business is $40M or less
Distribution Service average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
First Auction special size
standard (1994) -
Small Business is an entity
that, together with its
affiliates, has no more than a
218-219 MHZ Service $6M net worth and, after
federal income taxes (excluding
carryover losses) has no more
than $2M in annual profits each
year for the previous two years
New Standard -
Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Satellite Master Antenna
Television Systems $12.5 Million in Annual
Receipts or Less
24 GHz - Incumbent Licensees 1,500 Employees or Fewer
24 GHz - Future Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Miscellaneous
On-Line Information Services $18 Million in Annual Receipts
or Less
Radio and Television
Broadcasting and Wireless
Communications Equipment 750 Employees or Fewer
Manufacturers
Audio and Video Equipment
Manufacturers
Telephone Apparatus
Manufacturers (Except 1,000 Employees or Fewer
Cellular)
Medical Implant Device 500 Employees or Fewer
Manufacturers
Hospitals $29 Million in Annual Receipts
or Less
Nursing Homes $11.5 Million in Annual
Receipts or Less
Hotels and Motels $6 Million in Annual Receipts
or Less
Tower Owners (See Lessee's Type of Business)
_________________________
1 47 C.F.R. § 73.1216.
2 See Letter from Charles W. Kelley, Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal
Communications Commission to ABC, Inc., dated June 25,
2002.
3 See Letter from Charles W. Kelley, Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal
Communications Commission to ABC, Inc., dated August 9,
2002.
4 See Letter from David Cohen, Executive Counsel, Law &
Regulation, ABC, Inc. to Marlene H. Dortch, Secretary,
Federal Communications Commission, dated August 30, 2002
(hereinafter ``August 30 Response'').
5 See Letter from Charles W. Kelley, Chief, Investigations
and Hearings Division, Enforcement Bureau. Federal
Communication Commission to ABC, Inc., dated October 22,
2002 (hereinafter ``October 22, 2002'').
6 See Letter of Inquiry from David Cohen, Executive
Counsel, Law & Regulation, ABC, Inc., to Marlene H. Dortch,
Secretary, Federal Communications Commission, dated
November 21, 2002 (hereinafter ``November 21 Response'').
7 Id. at 5.
8 The legend reads: ``Theatre is not responsible for
overbooking. Seating is on a first-come, first-served
basis. No one will be admitted once the film begins or
without a pass. THIS PASS ADMITS ONE.'' (emphasis in
original). August 30 Response, Attachment.
9 November 21 Response at 5.
10 November 21 Response at 2. Indeed, the contest
announcement specifies that ``[p]rizes are non-transferable
and with no substitutes.'' The Station's written contest
rules similarly so provide. Id.
11 November 21 Response at 5.
12 Id.
13 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); see
also 47 U.S.C. § 503(b)(1)(D) (forfeitures for violation of
14 U.S.C. § 1464). Section 312(f)(1) of the Act defines
willful as ``the conscious and deliberate commission or
omission of [any] act, irrespective of any intent to
violate'' the law. 47 U.S.C. § 312(f)(1). The legislative
history to section 312(f)(1) of the Act clarifies that this
definition of willful applies to both sections 312 and
503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong. 2d
Sess. 51 (1982), and the Commission has so interpreted the
term in the section 503(b) context. See, e.g., Application
for Review of Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991)
(``Southern California Broadcasting Co.''). The Commission
may also assess a forfeiture for violations that are merely
repeated, and not willful. See, e.g., Callais Cablevision,
Inc., Grand Isle, Louisiana, Notice of Apparent Liability
for Monetary Forfeiture, 16 FCC Rcd 1359 (2001) (issuing a
Notice of Apparent Liability for, inter alia, a cable
television operator's repeated signal leakage).
``Repeated'' merely means that the act was committed or
omitted more than once, or lasts more than one day.
Southern California Broadcasting Co., 6 FCC Rcd at 4388, ¶
5; Callais Cablevision, Inc., 16 FCC Rcd at 1362, ¶ 9.
14 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
15 See, e.g., SBC Communications, Inc., Apparent Liability
for Forfeiture, Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶
4 (2002) (forfeiture paid).
16 Although non-broadcast disclosures (such as making
contest rules available at the stations and on the World
Wide Web) can supplement broadcast announcements, they
cannot act as a substitute for broadcast announcements. AK
Media Group, Inc., 15 FCC Rcd 7541, 7543 (Enf. Bur. 2000);
Clear Channel Broadcasting Licenses, Inc., 15 RCC Rcd 2734,
2735 (Enf. Bur. 2000).
17 WMJX, Inc., 48 RR 2d 1339, 1355 (1981).
18 Id. at 1355-56. ``The Commission stated in Eastern
Broadcasting Corp., 14 FCC 2d 228, 229 (1968): `Deception
may result from the use of statements which are not
technically false or which may be literally true, since
only the relevant consideration is the impact of the
statements to the public.''' WMJX, Inc., 48 RR 2d at 1355-
56 & n.82. Moreover, licensees will be held accountable
for broadcasting ambiguous contest rules that tend to
mislead the public. Id. at 1357 & n. 81.
19 Citicasters Co., 15 FCC Rcd 16612, 16613-14 (Enf. Bur.
2000) (quoting WMJX, Inc., 48 RR 2d at 1357); Clear Channel
Broadcasting Licenses, Inc., 15 FCC Rcd 2734, 2735 (Enf.
Bur. 2000) (same).
20 See AT&T Wireless Services, Inc., 17 FCC Rcd 21866,
21871 (2002); see also Station KVGL, Inc., 42 FCC 2d 258,
259 (1973).
21 Section 312(f)(1) of the Act, 47 U.S.C. § 312(f)(1),
which applies to Section 503(b) of the Act, provides that
``[t]he term `willful', when used with reference to the
commission or omission of any act, means the conscious and
deliberate commission or omission of such act, irrespective
of any intent to violate any provision of this Act ....''
See Southern California Broadcasting Co., 6 FCC Rcd 4387
(1991).
22 The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, 12 FCC Rcd 17087, 17113 (1997),
recon. denied 15 FCC Rcd 303 (1999) (``Forfeiture Policy
Statement''); 47 C.F.R. § 1.80(b).
23 47 U.S.C. § 503(b)(2)(D).
24 47 U.S.C. § 503(b).
25 47 C.F.R. §§ 0.111, 0.311 and 1.80.
26 See 47 C.F.R. § 1.1914.