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1. Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Capstar TX Limited Partnership, ) File No. EB-03-IH-0368
) NAL/Acct. No. 200532080135
Licensee of Station WKSS(FM), ) FRN 0003474905
Hartford-Meriden, Connecticut ) Facility ID # 53384
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: June 21, 2005 Released: June 22, 2005
By the Acting Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL''), we find Capstar TX Limited
Partnership (``Capstar''), licensee of Station WKSS(FM),
Hartford-Meriden, Connecticut, apparently liable for a
monetary forfeiture in the amount of $4,000 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 Capstar
conducted and broadcast the ``I Do Island'' contest over
Station WKSS(FM) and apparently awarded a prize package
valued significantly less than the value publicized by the
station and stated in the contest rules.
II. BACKGROUND
2. According to the complaint,2 Station WKSS(FM) (the
``Station'') publicized and broadcast a contest called ``I
Do Island.'' Patterned after the television program
``Survivor,'' the contest required five brides-to-be to
live continuously in the center court of a shopping mall
for seven days and nights utilizing only the clothes worn
on the first day of the contest, a sleeping bag, and one
additional item. Contestants were allowed to leave the
center court only for short, scheduled bathroom breaks and
could eat only ``wedding cake'' supplied by the Station.
Each day Station listeners voted to eliminate one of the
contestants from the contest. As the last remaining bride-
to-be, the complainant won the contest, entitling her to a
``Wedding Package'' consisting of a wedding reception,
bridal gown, bridesmaids' dresses, wedding rings, honeymoon
package, and other parts of a traditional wedding event.
On that day, Station staff told her that within two weeks
she would receive all of the information necessary to
collect the prizes advertised. Approximately three months
after the contest ended, however, the complainant contends
that she still had not received all of the information
about the prizes that she needed to plan her upcoming
wedding and that the Station ultimately informed her the
prizes awarded were worth only $20,330, substantially less
than the $35,000 prize package advertised by the Station.3
3. On July 26, 2004, the Enforcement Bureau
(``Bureau'') sent a letter of inquiry to Capstar.4 On
August 16, 2004, Clear Channel, the ultimate parent company
of Capstar, responded on behalf of Capstar5 and stated that
the Station's promotions ``described the [``I Do Island'']
contest prize as an `ultimate wedding package' worth
approximately $30,000.''6 Capstar admitted, however, that
the actual value of the prize package was $20,330.7
Because the Initial Response failed to respond properly to
the Bureau's inquiries, on October 7, 2004, the Bureau sent
another letter of inquiry to Capstar.8 Clear Channel
responded on October 27, 2004,9 and stated, contrary to the
statement in its Initial Response, that Capstar's contest
promotions ``did not mention the approximate value of the
prize package.''10
4. In both responses, Capstar argues that the Station
complied with the contest rules and that the Station took
several corrective actions to ensure that the complainant
was treated fairly. Specifically, Capstar contends that it
offered to host a wedding rehearsal dinner and to supply a
photographer for the complainant's wedding as additional
prizes in order to increase the value of the prize package
awarded to her.11 The complainant allegedly refused to
accept those additional prizes.12 Capstar presented a
release indicating, however, that on September 17, 2003,
the complainant accepted a payment of $5,000 in full
settlement of her complaints.13
III. DISCUSSION
5. The Communications Act of 1934, as amended (the
``Act''), at section 503(b)(1), provides that 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.14 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. 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.
As we set forth in greater detail below, we conclude under
this procedure that Capstar is apparently liable for a
forfeiture in the amount of $4,000 for its apparent willful
and repeated violations of section 73.1216 of the
Commission's rules.
6. Section 73.1216 of the Commission's rules
requires a broadcast licensee to conduct station-sponsored
contests "substantially as announced or advertised," and to
disclose fully and accurately the "material terms" of such
contests.15 Material terms generally include ``the extent,
nature and value of prizes'' and ``the basis for valuation
of the prizes.''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
7. In this case, it appears that Capstar violated
section 73.1216 of the Commission's rules by overstating
the value of the prize package to be awarded to the winner
of its March 2003, ``I Do Island'' contest. According to
the complainant, promotions broadcast over Station WKSS(FM)
valued the contest's prize package at approximately
$35,000.20 Capstar provides contradictory statements,
indicating in its Initial Response that broadcast
promotions valued the prize at $30,000 and in its October
Response that no value was given during broadcasts.21 The
complainant and Capstar agree that the contest rules state
the value of the prizes was approximately $30,000.22
8. We need not attempt to decide which of Capstar's
conflicting versions of the facts surrounding the
advertisement of the ``I Do Island'' contest is most
credible.23 Assuming that Capstar did, in fact, run
broadcast messages advertising the value of the prize
package at $30,000 (or at $35,000, as the complaint
charges), that sum is significantly higher than the
approximately $20,000 actual value of the package initially
awarded and the advertisements would constitute an apparent
violation of section 73.1216. Assuming, on the other hand,
that the second of Capstar's inconsistent filings is
correct in stating that the value of the prizes was not
advertised through broadcast messages at all, Capstar has,
nonetheless, apparently violated section 73.1216. First,
that rule generally requires that ``material terms should
be disclosed periodically by announcements broadcast on the
station,'' and material terms generally include, among
other things, the ``value of prizes'' and ``basis for
valuation,''24 so the omission itself is a violation.
Further, there is no dispute that the written rules
concerning the contest valued the prizes at $30,000. Non-
broadcast advertisements of a contest must also ``fully and
accurately'' disclose the material terms; thus the $30,000
valuation in the written material is as problematic as it
would be in a broadcast message.25
9. Although Capstar offered additional prizes in an
attempt to increase the value of the prize package, it did
so only after the complainant objected to receiving a prize
package valued significantly lower than the one advertised
by the Station. Such remedial actions do not absolve
Capstar from liability and the proposed forfeiture
penalty.26 In addition, the fact that the complainant
executed a release with Capstar does not affect our
decision since she did not withdraw the complaint she filed
prior to the release.27
10. Based upon the evidence before us, we find that
Capstar apparently willfully28 and repeatedly violated
section 73.1216 of the Commission's rules by willingly and
repeatedly advertising inaccurate and misleading statements
regarding a material term of the ``I Do Island'' contest,
namely the value of the prize package. The Commission's
Forfeiture Policy Statement sets a base forfeiture amount
of $4,000 for failure to broadcast fully and accurately the
material terms of a contest.29 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,30
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 listed
above and the Forfeiture Policy Statement, we believe that
a $4,000 forfeiture is appropriate in this case. Although
the substantial revenues of Capstar's ultimate corporate
parent31 and its previous violations of Commission rules32
ordinarily would warrant a proposed forfeiture above the
base amount, we find that those factors are counter-
balanced here by the licensee's good-faith efforts to
remedy the situation prior to our initiation of this
investigation.33
IV. ORDERING CLAUSES
11. ACCORDINGLY, IT IS ORDERED, pursuant to section
503(b) of the Communications Act of 1934, as amended,34 and
sections 0.111, 0.311, and 1.80 of the Commission's
rules,35 that Capstar TX Limited Partnership is hereby
NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the
amount of Four Thousand Dollars ($4,000) 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 days of the
release of this Notice, Capstar TX Limited Partnership
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 must be made by check or
similar instrument, payable to the order of the Federal
Communications Commission. The payment must include the
NAL/Acct. No. and FRN No. referenced above. Payment by
check or money order may be mailed to Federal
Communications Commission, P.O. Box 358340, Pittsburgh, PA
15251-8340. Payment by overnight mail may be sent to
Mellon Bank /LB 358340, 500 Ross Street, Room 1540670,
Pittsburgh, PA 15251. Payment by wire transfer may be
made to ABA Number 043000261, receiving bank Mellon Bank,
and account number 911-6106.
14. The response, if any, must be mailed to William H.
Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W, Room 4-C330, Washington DC 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.
20554.36
17. IT IS FURTHER ORDERED that a copy of this Notice
shall be sent, by Certified Mail/Return Receipt Requested,
to Capstar TX Limited Partnership, Attention: Troy G.
Langham, 2625 S. Memorial Drive, Suite A, Tulsa, Oklahoma
74129-2623; Hamlet T.Newsom, Jr., Associate General
Counsel, Clear Channel Communications, Inc., 200 E. Basse
Road, San Antonio, Texas 78209-8328; Christopher Cain,
Esq., Clear Channel Communications, Inc., 200 E. Basse
Road, San Antonio, Texas 78209-8328; John Burgett, Esq.,
Wiley Rein & Fielding LLP, 1776 K Street, N.W., Washington,
D.C. 20006 and Jessica Dolan, 745 Merrow Road, Unit 162,
Coventry, Connecticut 06238.
FEDERAL COMMUNICATIONS COMMISSION
William H. Davenport
Chief, Investigations and Hearings
Division
Enforcement Bureau
_________________________
1 47 C.F.R. § 73.1216.
2 Letter to the Federal Communications Commission, dated
June 17, 2003 (``Complaint'').
3 The complainant alleges that the Station advertised that
the Wedding Package was worth $35,000, although she
acknowledges that the contest rules give a lower figure,
$30,000. See Complaint at 1.
4See Letter from William D. Freedman, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission to Capstar TX Limited
Partnership, dated July 26, 2004.
5See Letter from Hamlet T. Newsom, Jr., Associate General
Counsel, Clear Channel Communications, Inc. (``Clear
Channel''), the ultimate parent company of Capstar, to
Marlene H. Dortch, Secretary, Federal Communications
Commission, dated August 16, 2004 (``Initial Response'').
6 See Initial Response at Exhibit 1, ¶5.
7 See Initial Response at 2.
8See Letter from William D. Freedman, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission to Capstar TX Limited
Partnership, dated October 7, 2004 (``October LOI'').
9 See Letter from Hamlet T. Newsom, Jr., Associate General
Counsel, Clear Channel Communications, Inc. (``Clear
Channel''), the ultimate parent company of Capstar, to
Marlene H. Dortch, Secretary, Federal Communications
Commission, dated October 27, 2004 (``October Response'').
10 See October Response at 2 and Exhibit 1, ¶2.
11 See Initial Response at 2; October Response at 2, ¶4.
12 Id.
13 See Initial Response at Exhibit 2.
14 47 U.S.C. § 503(b)(1)(B). See also 47 C.F.R. §
1.80(a)(1); 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'').
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)(``Callais'') (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, 6 FCC Rcd at 4388,
¶ 5; Callais, 16 FCC Rcd at 1362, ¶9.
15 47 C.F.R. § 73.1216 specifically provides that ``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.''
16 See 47 C.F.R. § 73.1216, notes 1(b) and 2. 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 broadcast. Disclosure of material terms in
a reasonable number of announcements is sufficient. In
addition to the required broadcast announcements,
disclosure of material terms may be made in a non-broadcast
manner.'' See also New Northwest Broadcasters, Notice of
Apparent Liability for Forfeiture, 19 FCC Rcd 9352 (Enf.
Bur. 2004) (forfeiture paid); ABC, Inc., Notice of Apparent
Liability for Forfeiture, 18 FCC Rcd 25647 (Enf. Bur. 2003)
(forfeiture paid); Isothermal Community College, Notice of
Apparent Liability for Forfeiture, 18 FCC Rcd 23932 (Enf.
Bur. 2003) (forfeiture paid); Citicasters Co., Notice of
Apparent Liability for Forfeiture, 15 FCC Rcd 16612 (Enf.
Bur. 2000) (forfeiture paid).
17 WMJX, Inc., Order, 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., Notice of Apparent Liability for
Forfeiture, 15 FCC Rcd 16612, 16613-14 (Enf. Bur. 2000)
(quoting WMJX, Inc., 48 RR 2d at 1357); Clear Channel
Broadcasting Licenses, Inc., Notice of Apparent Liability,
15 FCC Rcd 2734, 2735 (Enf. Bur. 2000) (same) (forfeiture
paid).
20 See Complaint at 1.
21 See Initial Response at 1 and note 1; October Response
at 2, ¶2. In support of its position, Capstar provided two
affidavits from Sarah Hannon, described in the Initial
Response as the Station's Director of Promotions and in the
October Response as the Assistant Director of Promotions at
the time of the ``I Do Island'' contest. In her first
affidavit, attached as Exhibit 1 to the Initial Response,
Ms. Hannon states that the contest's prize package was
valued at approximately $30,000 in the contest rules, in
flyers distributed by the Station and in promotions
broadcast by the Station. See Initial Response at Exhibit
1, ¶5. However, in her second affidavit, attached to
Capstar's October Response, Ms. Hannon states that ``to the
best of [her] recollection'' the value of the prize package
was not mentioned in the Station's promotions about the
contest. See October Response at Exhibit 1, ¶2. Capstar
fails to provide any explanation for these opposing
statements and has not provided audio tapes or transcripts
of the contest advertisements.
22 See Complaint at 1; Initial Response at 1 (attaching
contest rules, which state ``prize value: $30,000
(approx.).''
23 Section 1.17 of the Commission's rules, 47 C.F.R. §
1.17, prohibits licensees from submitting to the Commission
written and oral statements of fact that are intentionally
incorrect or misleading and written statements of fact that
are made without a reasonable basis for believing that the
statements of fact are correct and not misleading. In this
case, the affidavit of Sarah Hannon, submitted with the
Initial Response, stated that the station ``periodically
aired promotions disclosing the contest's material terms.
These promotions described the contest prize as an
`ultimate wedding package' worth approximately $30,000.''
Ms. Hannon's second affidavit, submitted with the October
Response, stated that the broadcast announcements ``[t]o
the best of my recollection . . . included a description of
the grand prize, but did not mention the approximate value
of the prize package.'' Although these statements
contradict each other, there is insufficient evidence to
conclude that either was intentionally misleading or was
made without a reasonable belief that it was true when it
was made. Neither statement appears to be an attempt to
prove compliance with section 73.1216 of the Commission's
rules. In fact, each statement admits a violation of that
rule, to wit, the first admits that the broadcasts
advertised an inflated value for the prize package and the
second admits that a material term of the contest, the
value of the prize, was not broadcast.
24 47 C.F.R. § 73.1216, notes 1-2.
25 47 C.F.R. 73.1216.
26 See AT&T Wireless Services, Inc., Notice of Apparent
Liability for Forfeiture, 17 FCC Rcd 21866, 21871 (2002);
see also Station KVGL, Inc., Memorandum Opinion and Order,
42 FCC 2d 258, 259 (1973).
27 The staff contacted her and confirmed that she did not
intend to withdraw her complaint notwithstanding the
release.
28 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 at
4387.
29 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).
30 47 U.S.C. § 503(b)(2)(D).
31 In 2004, Clear Channel Communications, Inc. had revenues
of more than $ 9.4 billion. See United States Securities
and Exchange Commission Form 10-K, Annual Report, Clear
Channel Communications, Inc. (2004).
32 See supra note19 (prior contest violations). See also
Capstar TX Limited Partnership c/o Dorann Bunkin, Esq.,
Notice of Apparent Liability for Forfeiture, 18 FCC Rcd
20203 (Med. Bur. 2003) (public file violations).
33 See Radio One Licenses, Inc., Forfeiture Order, 18 FCC
Rcd 15964, 15965 4 (1003), recon. denied, 18 FCC Rcd 25481
(2003) (reducing forfeiture for EAS violations because the
licensee had identified the problems and had ordered
replacement equipment prior to FCC on-site inspection).
34 47 U.S.C. § 503(b).
35 47 C.F.R. §§ 0.111, 0.311 and 1.80.
36 See 47 C.F.R. § 1.1914.