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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No. EB-06-IH-3723
In the Matter of
) NAL/Acct. No. 200732080035
COMCAST CORPORATION
) FRN: 00063229247
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: September 21, 2007 Released: September 21, 2007
By the Chief, Enforcement Bureau:
I. Introduction
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Comcast Corporation ("Comcast"), which operates an affiliated
regional cable network, CN8, is apparently liable for a forfeiture in
the amount of four thousand dollars ($4,000) for violating Section
76.1615 of the Commission's rules. This rule generally requires cable
operators engaged in origination cablecasting to make sponsorship
identification announcements when presenting matter in return for
money, service, or other valuable consideration. We find that Comcast
cablecast portions of a video news release ("VNR") produced on behalf
of "Nelson's Rescue Sleep" without also airing required sponsorship
identification announcements.
II. Background
2. Section 76.1615(a) of the Commission's rules states:
When a cable television system operator engaged in origination
cablecasting presents any matter for which money, service, or other
valuable consideration is either directly or indirectly paid or promised
to, or charged or accepted by such cable television system operator, the
cable television system operator, at the time of the cablecast, shall
announce that such matter is sponsored, paid for, or furnished, either in
whole or in part, and by whom or on whose behalf such consideration was
supplied: Provided, however, that "service or other valuable
consideration" shall not include any service or property furnished without
or at a nominal charge for use on, or in connection with, a cablecast
unless it is so furnished in consideration for an identification of any
person, product, service, trademark, or brand name beyond an
identification reasonably related to the use of such service or property
on the broadcast.
3. On November 11, 2006, the Center for Media and Democracy ("CMD") and
Free Press jointly filed a complaint against Comcast alleging that, on
September 21, 2006, CN8 transmitted a VNR produced by D.S. Simon
Productions for Nelson's Rescue Sleep without providing the
sponsorship identification required by Section 76.1615.
4. On April 26, 2007, the Enforcement Bureau ("Bureau") issued a letter
of inquiry to Comcast to determine, among other things, whether CN8
transmitted the VNR as alleged, and if so, whether Comcast disclosed
the source of the VNR in its cablecast.
5. Comcast responded to the letter of inquiry on July 2, 2007. Comcast
admits that on September 21, 2006, its affiliated cable network, CN8,
aired portions of a VNR produced on behalf of "Nelson's Rescue Sleep"
without any sponsorship identification. Comcast argues as a threshold
matter that Section 76.1615 appears to be invalid because the
statutory provision underlying that rule, Section 317 of the
Communications Act, as amended (the "Act"), applies only to
broadcasting and not to cablecasting. Comcast states that although it
does not believe that the Commission has the authority to apply
Section 317 in the context of cable programming or to enforce Section
76.1615 of the Commission's rules, it nonetheless responded to the
inquiries set forth in the LOI. Comcast contends that even assuming
the validity of the rule, CN8's use of the VNR material did not
violate Section 76.1615. Specifically, Comcast argues that no
sponsorship identification is required unless consideration is
received or promised as part of an express or implied agreement in
exchange for use of the VNR. Comcast further states that CN8 and its
employees did not receive and were not promised any consideration from
any source in exchange for cablecasting the VNR material.
III. Discussion
6. 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. To impose such a forfeiture penalty, the
Commission must issue a notice of apparent liability, 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. We conclude under this standard that Comcast is
apparently liable for a forfeiture for its apparent willful violation
of Section 76.1615 of the Commission's rules.
7. Section 76.1615(a) of the Commission's rules makes clear that when a
cable television system operator engages in origination cablecasting,
it must identify the sponsor of a material whenever that operator
accepts "money, service or other valuable consideration" to air that
material. The phrase "service or other valuable consideration,"
however, does not include "service or property furnished without
charge or at a nominal charge for use on, or in connection with a
broadcast," unless such service or property is "furnished in
consideration for an identification in a broadcast of any person,
product, service, trademark or brand name beyond an identification
which is reasonably related to the use of such service or property on
the broadcast." Thus, while the proviso to the rule exempts service or
property furnished without charge from the duty to announce the
sponsor or source of such material, the exception to that proviso
reinstates the duty when there is too much focus on a product or brand
name in the programming.
8. CN8's cablecast featuring "Nelson's Rescue Sleep" was part of a daily
segment on "Art Fennell Reports" focusing on consumer issues. On
September 21, 2006, the consumer-issues segment concerned
non-prescription sleep aids. The segment featured only "Nelson's
Rescue Sleep," a commercial, natural sleep-aid product, and included
portions of a VNR produced by D.S. Simon Productions on behalf of
"Nelson's Rescue Sleep." The VNR material used in this consumer-issues
segment contains extensive images and mentions of the product and
includes the statement that "If you are one of the estimated 70
million Americans who have trouble sleeping - Rescue Sleep may be what
you're looking for." We do not believe that this type of promotional
material, furnished by a product manufacturer, can or should be
considered within the scope of the proviso, which is directed to
material that contains only fleeting or transient references to
products or brand names. We conclude that even though CN8 received
this material at no charge, it falls within the exception specifically
set forth in the rule and that a sponsorship announcement was thus
required. We therefore find that Comcast violated Section 76.1615(a)
of the Commission's rules by willfully airing the VNR material at
issue without proper sponsorship identification.
9. The Commission's Forfeiture Policy Statement sets a base forfeiture
amount of $4,000 for sponsorship identification violations. After
considering the record and all of 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 a $4,000 forfeiture is appropriate in
this case, which represents the base amount for the cablecast
transmitted by CN8 on September 21, 2006.
IV. ORDERING CLAUSES
10. ACCORDINGLY, IT IS ORDERED THAT, 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, Comcast Corporation is hereby NOTIFIED
of its APPARENT LIABILITY FOR FORFEITURE in the amount of Four
Thousand Dollars ($4,000) for willfully violating Section 76.1615 of
the Commission's rules.
11. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's
rules, that within thirty days of the release of this Notice, Comcast
Corporation SHALL PAY the full amount of the proposed forfeiture or
SHALL FILE a written statement seeking reduction or cancellation of
the proposed forfeiture.
12. 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.
13. The response, if any, must be mailed to the Office of the Secretary,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554, to the Attention of: Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement Bureau, Room 4-C330,
and must include the NAL/Acct. No. referenced above.
14. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices; or (3) some other reliable and objective
documentation that accurately reflects the petitioner'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.
15. Requests for payment of the full amount of the NAL under an
installment plan should be sent to: Associate Managing Director -
Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
D.C. 20554.
16. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by
Certified Mail/Return Receipt Requested, to Peter H. Feinberg,
Associate General Counsel, Comcast Corporation, 1500 Market Street,
Philadelphia, Pennsylvania, 19102, and to its counsel, James L.
Casserly, Esquire, and Megan Anne Stull, Esquire, Willkie Farr and
Gallagher LLP, 1875 K Street, N.W., Washington, D.C. 20006.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
See 47 C.F.R. S: 76.1615.
CN8 supplies programming to Comcast cable systems, and Comcast does not
contest that the programming at issue here was carried on its cable
systems.
47 C.F.R. S: 76.1615. The rule also contains additional requirements for
cable operators under certain circumstances.
See Complaint of Timothy Karr, Campaign Director, Free Press, and Diane
Farsetta, Senior Researcher, Center for Media and Democracy, dated
November 14, 2006 (File No. EB-06-IH-5669) ("Complaint"). The Complaint
also cited four other cablecasts in which CN8 had allegedly failed to
provide the required sponsorship identification. This NAL addresses the
Complaint only with respect to the September 21, 2006, cablecast on CN8.
See Letter from Hillary S. DeNigro, Chief, Investigations & Hearings
Division, Enforcement Bureau, to Comcast Corporation, dated April 26, 2007
("LOI").
See Letter from Megan Anne Stull, Willkie, Farr & Gallagher LLP, Counsel
for Comcast Corporation, dated July 2, 2007 ("Response").
See id. at 4.
See Response at 1-2. The Commission has previously concluded that the
statutory sponsorship identification requirements also apply to
origination programming by cable operators. See Commission Reminds
Broadcast Licensees, Cable Operators and Others of Requirements Applicable
to Video News Releases, Public Notice, 20 FCC Rcd 8593, 8594, n.6 (2005).
We will not revisit that conclusion here.
See id. at 3.
See id.
See id. at 3-4, 5, 7. In addition, Comcast notes that it paid CNN
Newsource a licensing fee for access to the VNR material. See id. at 5.
See 47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1); see also 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. See 47 U.S.C. S: 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., 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., 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, P: 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, P:9.
See 47 U.S.C. S: 503(b); 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).
47 C.F.R. S:76.1615(a).
See Response at 4-5.
See id. at 5 & Declaration of Janet Zappala.
Response at 6 and Exhibit 1. We note that the VNR material used on the
segment was edited, but that the editing did not alter the product and
brand-name focus of the material.
See Applicability of Sponsorship Identification Rules, Public Notice, 40
FCC 141, 148, illustrative interpretation 26(b) (1963) ("1963 Public
Notice").
We note that there may be other bases for requiring sponsorship
identification but we do not reach these in this Notice of Apparent
Liability.
See The Commission's Forfeiture Policy Statement and Amendment of Section
1.80 of the Commission's Rules, 12 FCC Rcd 17087, 17114 (1997), recons.
denied 15 FCC Rcd 303 (1999); 47 C.F.R. S: 1.80(b).
See 47 C.F.R. S: 1.1914.
(Continued from previous page)
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Federal Communications Commission DA 07-4005
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Federal Communications Commission DA 07-4005