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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-04-IH-0330
NM LICENSING LLC ) FRN: 0005804810
Licensee of Station WYAV(FM), ) NAL/Acct. No. 200632080164
Myrtle Beach, South Carolina ) Facility ID No. 36947
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: July 19, 2006 Released: July 20, 2006
By the Chief, Investigations and Hearings Division:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find NM
Licensing, LLC ("NextMedia"), licensee of Station WYAV(FM), Myrtle Beach,
South Carolina, apparently liable for a monetary forfeiture in the amount
of $4,000 for its apparent violation of section 73.1216 of the
Commission's rules. That rule requires a broadcast licensee to "fully and
accurately disclose the material terms of a contest...and conduct the
contest substantially as announced or advertised." As discussed below, we
find that NextMedia substantially altered material terms of a contest, in
apparent violation of the Commission's rule.
II. BACKGROUND
2. The Commission received a complaint alleging that NextMedia made a
significant change to the rules governing the station's advertised
promotional contest for a concert during "Bike Week 2004," in Myrtle
Beach, South Carolina (the "Contest"). According to the complainant,
beginning in April 2004, the station launched a contest in which a
customized motorcycle would be awarded to the person who drew the one key
capable of starting it. At the start of the Contest, the station announced
that it would periodically air a specific sound effect. After each airing
of the sound effect, a certain numbered caller to the station would
receive a free ticket to a concert on May 15, 2004 and a key certificate
that on the concert date would be exchanged for an ignition key. Each
contestant would then attempt to start the motorcycle, and the contestant
possessing the actual ignition key would win the motorcycle.
3. The complainant won a key certificate to participate in the Contest. On
May 14, 2004, the complainant went to the station, as directed, to pick up
his free ticket to the concert and his key certificate. At that time, the
complainant received his ticket, his key certificate and a concert "flyer"
containing handwritten instructions to arrive at the concert on or before
7:00 p.m. to exchange the key certificate for an actual key. When the
complainant arrived at the concert location the next day at 6:30 p.m., he
learned the drawing for the motorcycle had already taken place and that he
was denied his opportunity to participate in the drawing.
4. Based on the allegations contained in the Complaint, the Investigations
and Hearings Division of the Enforcement Bureau sent a letter of inquiry
to NextMedia on October 20, 2004. NextMedia responded by letter dated
November 22, 2004, and included a CD and written transcript of the
promotional spots it aired for the Contest. NextMedia states that the
Contest involved the chance to win a $35,000 custom motorcycle. NextMedia
states that it co-promoted the Contest along with a motorcycle shop, as a
promotion for a concert to be produced by the Myrtle Beach Rescue Squad.
NextMedia broadcast promotional spots for the concert "at least 6 times a
day, seven days a week, from April 16, through May 15, 2004." NextMedia
awarded key certificates to the tenth caller to the station after each
broadcast of the sound effect. Those successful callers were then required
to appear at the station on May 14, 2004, to pick up a free ticket to the
concert and a key certificate. They also received the concert flyer
described above, containing handwritten instructions from the station to
appear at the concert on or before 7:00 p.m. on May 15, 2004. NextMedia
qualified 35 people in all to participate in the drawing.
5. NextMedia admits that the drawing for the motorcycle did not take place
as announced in its instructions to the winners of the key certificates,
but argues that the changes were necessary. Specifically, on the date of
the concert at approximately 6:00 p.m., the Myrtle Beach Rescue Squad
informed station personnel that, due to contractual arrangements with the
second band, the drawing for the motorcycle could not take place as
planned. According to NextMedia, the contract provided that no intervening
activity could take place on stage between the performances of the two
bands, which were scheduled to begin playing at 7:00 p.m., and required to
stop playing at 10:00 p.m., due to noise restriction ordinances in effect
for Myrtle Beach, South Carolina. As a result, station personnel were
requested to begin the drawing at 6:20 p.m., instead of 7:45 p.m., as
originally planned. Station personnel read the list of initial winners
three times between 6:20 and 6:45 p.m. By 6:45 p.m., all but five initial
winners had received their keys. The contest was then held and the
motorcycle awarded. After the contest was over but before 7:00 p.m., three
more initial winners arrived at the concert. A station representative
apologized to these three and offered additional free concert tickets as
compensation.
III. DISCUSSION
6. Under section 503(b)(1) of the Communications Act of 1934, as amended
(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. 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 standard that NextMedia is
apparently liable for a forfeiture for its apparent willful violation of
section 73.1216 of the Commission's rules.
7. 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 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 promoting the contest is broadcast. Disclosure of material
terms in a reasonable number of announcements is sufficient. In addition
to the required broadcast announcements, disclosure of the material terms
may be made in a non-broadcast manner.
8. In this case, it appears that NextMedia violated section 73.1216 of the
Commission's rules by failing to conduct the Contest substantially as
advertised. Indeed, NextMedia does not dispute that it failed to conduct
the drawing for the Contest as announced. The rules, as established for
the 35 participants, stated that, in order to be eligible to win the
motorcycle, key certificate holders would have to be present at the
concert on May 15, 2004, on or before 7:00 p.m. However, even though the
complainant and two others complied with the station's requirements,
alterations in the contest's parameters prevented them from participating
in the contest. The Commission has stated previously that, for the
purposes of the rule, "a term is considered material if it defines
operation of, or affects participation in a contest." In this case,
station management changed the rules regarding the operation of the
contest by changing the time for appearing to participate in the drawing
as well as the time of the drawing itself. These changes substantially
altered the material terms of the Contest. NextMedia concedes that three
contestants who complied with the requirement to appear at the concert on
or before 7:00 p.m. were prevented from participating in the contest
because it had already taken place.
9. Licensees, as public trustees, have the affirmative obligation to
prevent the broadcast of false, misleading or deceptive contest
announcements, and to conduct their contests substantially as announced.
The Commission has noted in this regard that "[t]he standards are high,
for while contests are particularly susceptible to abuse, abuses can be
prevented by diligent licensee attention to the planning and conduct of
contests." Here, NextMedia changed material terms of the Contest. The fact
that the change was at the behest of a third party, in this case the
Myrtle Beach Rescue Squad, in its capacity as the producer of the concert,
does not absolve NextMedia of its responsibility to fulfill the contest
terms. In any event, the changes in the contest rules and instructions
appear to be the result of NextMedia's inadequate planning and management
of the Contest. Similarly, NextMedia's contention that the station
ultimately awarded the advertised prize, and that it offered compensation
to the participants that were unable to participate due to the alteration
in schedule, does not mitigate its liability. The Commission has stated
previously that a showing of harm is not necessary to establish a
violation. However, in this case three contestants were harmed by being
denied the chance to win the contest prize.
10. Based upon the evidence before us, we find that NextMedia apparently
willfully violated section 73.1216 of the Commission's rules. The
Commission's Forfeiture Policy Statement sets a base forfeiture amount of
$4,000 for failure to conduct a station contest substantially as
announced. 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, 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. S 503(b)(2)(D), and the
Forfeiture Policy Statement, we believe that a $4,000 forfeiture is
appropriate in this case. Specifically, we conclude that the violation
occurred due to inadequate planning and control, and not due to a
deliberate attempt to deceive or to favor a particular contestant or class
of contestants.
V. ORDERING CLAUSES
11. ACCORDINGLY, IT IS ORDERED, pursuant to section 503(b) of the
Communications Act of 1934, as amended, and sections 0.111, 0.311, and
1.80 of the Commission's rules, that NM Licensing, LLC, is hereby NOTIFIED
of its APPARENT LIABILITY FOR FORFEITURE in the amount of $4,000 for
willfully and repeatedly 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, NM
Licensing, LLC 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 mailing check or similar
instrument, payable to the order of the Federal Communications Commission.
The payment MUST INCLUDE the FCC Registration Number ("FRN") and the
NAL/Account Number specified in the caption of this NAL. Payment by check
or money order may be mailed to the 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 Street, 8^th Floor Mailroom, Chicago, IL 60661.
Payment by wire transfer may be made to ABA Number 071000013, receiving
bank Bank One, and account number 1165259.
14. The response, if any, must be mailed to William H. Davenport, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th 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 NAL under an
installment plan should be sent to: Chief, Revenue and Receivables
Operations Group, 445 12th Street, S.W., Washington, D.C. 20554.
17. IT IS FURTHER ORDERED that the complaint filed by Danny Muckleroy IS
GRANTED to the extent indicated herein and IS OTHERWISE DENIED, and the
complaint proceeding IS HEREBY TERMINATED.
18. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by
Certified Mail/Return Receipt Requested, to NM Licensing, LLC, 6312 S.
Fiddlers Green Circle, Suite 360E, Englewood, Colorado, 80111-4946, and to
its counsel, Mathew L. Leibowitz, Esq., Suntrust International Center, One
Southeast Third Ave., Miami, Florida 33131-1715.
FEDERAL COMMUNICATIONS COMMISSION
William H. Davenport
Chief, Investigations and Hearings Division
Enforcement Bureau
47 C.F.R. S 73.1216.
Id.
See Complaint from Danny Muckelroy to the Federal Communications
Commission, dated May 24, 2004 ("Complaint").
Id.
Id.
Id.
See Letter from William H. Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission to Next
Media Group, dated October 20, 2004.
See Letter from Martin Leibowitz, Esq., counsel for NextMedia, to David
Brown, Esq., Assistant Chief, Investigations & Hearings Division,
Enforcement Bureau, dated November 22, 2004 ("Response").
Id. at 1.
Id. at 2.
Id. at 3-4.
Id.
Id. at 2, 3.
Id. at 4.
[1]47 U.S.C. S 503(b)(1)(B); [2]47 C.F.R. S 1.80(a)(1); see also [3]47
U.S.C. S 503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S 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. [4]47 U.S.C. S 312(f)(1). The legislative history to
[5]section 312(f)(1) of the Act clarifies that this definition of willful
applies to both [6]sections 312 and [7]503(b) of the Act, H.R. Rep. No.
97-765, 97^th Cong. 2d Sess. 51 (1982), and the Commission has so
interpreted the term in the [8]section 503(b) context. See, e.g., Southern
California Broadcasting Co., Memorandum Opinion and Order, [9]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., Notice of Apparent
Liability for Monetary Forfeiture, [10]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.
[11]Southern California Broadcasting Co., 6 FCC Rcd at 4388, P 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, P9.
[12]47 U.S.C. S 503(b); [13]47 C.F.R. S 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591, P 4 (2002) (forfeiture paid).
ABC, INC., Notice of Apparent Liability for Forfeiture, 18 FCC Rcd 25,647
(Enf. Bur. 2003).
[14]47 C.F.R. S 73.1216.
Response at 2.
Application for Review of Staff Ruling Concerning Complaint of Violation
of Section 73.1216 of the Commission's Rules, Memorandum Opinion and
Order, 2 FCC Rcd 5638 (1987).
NextMedia does not dispute that three initial winners arrived at the
concert before 7:00 p.m., the designated time in the contest rules.
Therefore, we need not decide the precise time the complainant arrived at
the concert.
WMJX, Inc., Decision, 48 RR 2d 1339, 1355 (1981); Rules Relating to
Licensee-Conducted Contests, Report and Order, 60 FCC 2d 1072 (1976).
Headliner Radio, Inc., Memorandum Opinion and Order, 8 FCC Rcd 2962 (Mass
Media Bur. 1993); Lincoln Dellar, Memorandum Opinion and Order, 8 FCC Rcd
2582, 2585 (Mass Media Bur. 1993) (where the cancellation of a
pre-announced contest violated the pertinent Commission rule because the
contest was not then conducted "substantially as announced").
Honeyradio, Inc., Memorandum Opinion and Order, 19 FCC 2d 833 (1978),
quoting Notice of Proposed Rulemaking, 40 Fed. Reg. 26692 (1975) (holding
licensee responsible for mistakes made during its conduct of a contest,
and affirming forfeiture and denying petition for reconsideration of a
letter of admonishment for violation of the Commission's contest rules).
See George Mckay, III, Notice of Apparent Liability for Forfeiture, 6 FCC
Rcd 7385 (Mass Media Bur. 1991) (forfeiture for violating contest rules
imposed, notwithstanding licensee's contention that its failure to conduct
a contest substantially as announced was due to acts of third parties);
Nationwide Communications Inc., Notice of Apparent Liability for
Forfeiture, 9 FCC Rcd 175 (Mass Media Bur. 1994) (forfeiture for violating
contest rules imposed, notwithstanding licensee's contention that its
failure to conduct a contest substantially as announced was due to
"inadvertence"), forfeiture reduced, Nationwide Communications Inc.,
Memorandum Opinion and Order, 9 FCC Rcd 2054 (Mass Media Bur. 1994)
(licensee's history of compliance with Commission rules warranted
forfeiture reduction, whereas licensee's general good faith efforts,
"awarding the contest prize as announced, and receiving no benefit from
its error" did not).
See WMJX, 48 RR 2d 1339, P 37.
The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
12 FCC Rcd 17087, 17113 (1997), recon. denied 15 FCC Rcd 303 (1999)
("Forfeiture Policy Statement"); 47 C.F.R. S 1.80(b).
47 U.S.C. S 503(b)(2)(D).
We note that NextMedia is a publicly traded company with total revenue of
more than $115 million last year. See NextMedia Operating Inc., press
release, March 10, 2005. This could support an upward adjustment pursuant
to section 1.80's "Ability to pay /relative disincentive" factor. See
section 1.80, note to paragraph (b)(4), Section II. However, in this case
that factor is counterbalanced by the downward adjustment factor of
NextMedia's history of overall compliance. Id., Downward Adjustment
criterion No. 2. We find that a baseline forfeiture is appropriate in this
case.
47 U.S.C. S 503(b).
47 C.F.R. SS 0.111, 0.311 and 1.80.
See 47 C.F.R. S 1.1914.
For purposes of the forfeiture proceeding initiated by this NAL, NM
Licensing, LLC, shall be the only party to this proceeding.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 06-1459
1
2
Federal Communications Commission DA 06-1459
References
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