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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-06-IH-2500
AMFM Broadcasting Licenses, LLC ) FRN: 0012325395
Licensee of Station KOST(FM) ) NAL/Acct. No. 200932080029
Los Angeles, California ) Facility ID No. 34424
Notice of apparent liability for forfeiture
Adopted: February 12, 2009 Released: February 12, 2009
By the Chief, Investigations and Hearings Division:
1. In this Notice of Apparent Liability For Forfeiture ("NAL"), issued
pursuant to Section 503(b) of the Communications Act of 1934, as
amended (the "Act"), we find that AMFM Broadcasting Licenses, LLC
("AMFM" or "Licensee"), Licensee of Station KOST(FM), Los Angeles,
California (the "Station"), apparently willfully and repeatedly
violated Section 73.1216 of the Commission's rules by failing to
"fully and accurately disclose the material terms of a contest" and to
conduct the contest "substantially as announced or advertised." Based
on our review of the facts and circumstances, we find the Licensee
liable for a monetary forfeiture in the amount of $6,000.
2. The Commission received a complaint dated August 23, 2006 (the
"Complaint"), alleging that the Station failed to conduct its "KOST
Rewards `Les Miserables'" contest (the "Contest") in accordance with
its advertised terms and the Commission's rules. Specifically, the
Complainant states that the Station conducted a drawing through its
KOST Rewards program whereby participants could win tickets to the
musical "Les Miserables." The Complainant alleges that contestants
were able to enter the Contest on the Station's webpage beginning on
May 29, 2006 at 3:50 p.m. and ending on June 2, 2006 at 8:50 p.m., but
that, on June 2nd, at approximately 3:00 p.m., and prior to the time
advertised for the close of the Contest, the names of three Contest
winners were already broadcast over KOST(FM) and that, by 4:00 p.m.,
the winners' names were posted on the Station's website. The
Complainant states that only one additional winner was chosen after
that time. The Complaint further states that, because of the premature
selection of winners, the Contest was not conducted fairly and as
advertised. The Complainant states that: "[b]y its very nature a
`random' drawing held at 3:00 p.m. would not have the same results as
one held after the stated running time of the Contest."
3. Based on the allegations contained in the Complaint, the Enforcement
Bureau ("Bureau") sent a letter of inquiry (the "LOI") to the
Licensee. Clear Channel Communications ("Clear Channel"), the ultimate
parent company of AMFM, responded on January 19, 2007 (the "LOI
Response"). In its LOI Response, the Licensee claims that the Contest
is not governed by Section 73.1216 because it "was conducted solely
via the Station's website" and was one of "numerous contests conducted
on the site under the Station's `Rewards' program, which allows
listeners to register online to earn `points' . . . [that can be used
to compete] for prizes in on-line contests such as the one at issue."
4. The Licensee states that "[t]he only on-air reference to the Contest
was an announcement for the Rewards program that promoted the Program
generally and included examples of what was available to participants
on the website at that time, including the Contest at issue." The LOI
Response includes a transcript of the on-air announcement and a
schedule showing when the announcements were scheduled to be
broadcast. The Event Manager for the Station, Daria Linville, confirms
that the Contest opened at 3:50 p.m. on May 29, 2006, and closed at
8:50 p.m. on June 2, 2006. Ms. Linville further confirms that drawings
were conducted on June 2nd and June 5th, and that a winner was
selected on June 2nd at 9:39 a.m., two additional winners were
selected on June 2nd at 1:03 p.m., and the final winner was selected
on June 5th at 9:03 a.m. The Licensee argues that while contestants
knew they had a chance to win tickets, they did not know how many
pairs of tickets would be awarded in total, nor when the drawings
would be held, and, therefore, no one was misled.
5. The Licensee contends that, although listeners were told on-air that
they could enter on the Station's website to win tickets to "Les
Miserables," the Contest is not governed by Section 73.1216 of the
Commission's Rules because "substantive information" about the Contest
was not broadcast on-air. Also, the Licensee disputes the
Complainant's statement that the names of some winners were announced
on-air; it asserts that the Station makes such on-air announcements
"only when the prizes are large," and that, in this case, the names of
the prize winners were posted on the Station's website on the same
date the names were drawn.
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 forfeiture
penalty. 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. 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, and the
Commission has so interpreted the term in the Section 503(b) context.
The Commission may also assess a forfeiture for violations that are
merely repeated, and not willful. "Repeated" means that the act was
committed or omitted more than once, or lasts more than one day. In
order to impose such a 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 penalty should be imposed. The
Commission will then issue a forfeiture if it finds, by a
preponderance of the evidence, that the person has willfully or
repeatedly violated the Act or a Commission rule. As described in
greater detail below, we conclude under this procedure that AMFM is
apparently liable for a forfeiture in the amount of $6,000 for its
apparent willful and repeated failure to fully and accurately disclose
the material terms of its Contest and to conduct the Contest
substantially as announced or advertised.
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." The material terms of a contest
include, among other things, the time and method of selecting prize
winners, when prizes can be won, and the value of the prizes being
awarded. Additionally, "the obligation to disclose the material terms
arises at the time the audience is first told how to enter or
participate [in the contest] and continues thereafter." 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 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 the conduct of contests."
8. AMFM's contention that the Contest at issue here does not fall under
Section 73.1216 because "no substantive information concerning the
Contest or how to participate in it was provided over the air" is
unavailing. As the Commission has stated, "[t]he rule applies to all
contests conducted by the licensee and broadcast to the public."
Although the rule does not apply to licensee-conducted contests that
are not broadcast or advertised to the public (e.g., a station contest
limited in its participation to station employees), AMFM acknowledges
that the Station broadcast on-air promotions and announcements about
its rewards program, which included the opportunity to participate in
a drawing to win tickets to Les Miserables. Although the Licensee
categorizes these on-air promotions and advertisements as
non-substantive, and claims, therefore, that the Contest was conducted
"exclusively" via the Station's website (i.e., KOST1035.com), the
transcript used to broadcast the promotion indicates otherwise. We
find that the promotion of the Contest over the air and the
requirement that listeners stay tuned to the radio station belie
Licensee's assertion that the Contest was conducted exclusively over
the website and that Section 73.1216 does not apply. We find that the
rule does apply.
9. In this case, AMFM promoted the Contest over the air, but did not
fully disclose to the listening audience the Contest's material terms,
including the time and means of selection of winners, when prizes can
be won, and the total number of prizes. Therefore, we find that AMFM
violated the rule. In this regard, AMFM states in its LOI Response
that "no substantive information concerning the Contest or how to
participate in it was provided over the air." It appears that the
Licensee expected listeners to go to its website to learn the material
terms of the Contest, but we find that the Station's website
information also failed to include all the material terms of the
Contest, resulting in participant confusion. As AMFM acknowledges:
"the website did not disclose how may pairs of tickets would be
awarded or when the drawings were held." The Licensee admits, and
documentation submitted by the Complainant shows, that the Contest
closed at 8:50 p.m. on June 2, 2006, yet drawings to select prize
winners were conducted several hours before the Contest closed (i.e.,
at 9:39 a.m. and 1:03 p.m. on June 2, 2006). Based upon the extent of
the information provided to Contest participants (which did not
include the time by which winners would be selected), contestants such
as the Complainant might reasonably conclude that the drawing to
select Contest winners would not be conducted until after the close of
the Contest, and that continued participation in the Contest until
8:50 p.m. on June 2nd would provide him the same chance of winning as
other participants. The award of Contest prizes prior to that time,
when the Contest remained open for contestants to enter it, is both
misleading and deceptive when done, as here, without clarification to
the public of the Contest's rules and procedures that would allow it.
As such, we conclude that AMFM violated Section 73.1216 of the
10. Based upon the evidence before us, we find that the Licensee
apparently willfully and repeatedly violated Section 73.1216 of the
Commission's rules when the Station's "KOST Rewards Program's `Les
Miserables' Contest" broadcast information about a Contest it
conducted but failed to fully disclose the material terms of that
Contest or to conduct the Contest substantially as advertised. The
Commission's Forfeiture Policy Statement and Section 1.80 of the
Commission's rules specify a base forfeiture amount of $4,000 for each
violation of Section 73.1216. 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 and Section 1.80(c)(4) of the
Commission's rules, 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. In reviewing our case
precedent, we find that Clear Channel has a history of violations of
the Commission's rules, including Section 73.1216. Accordingly, the
violation here warrants an upward adjustment of the base forfeiture
amount. After consideration of all the foregoing factors, and in view
of the particular facts of this case, we find that AMFM is apparently
liable for a forfeiture in the amount of $6,000.
III. 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 AMFM Broadcasting Licenses, LLC
is hereby NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the
amount of six thousand dollars ($6,000) for willfully and repeatedly
violating Sections 73.1216 of the Commission's rules.
12. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's
rules, 47 C.F.R. S: 1.80, that within thirty (30) days of the release
date of this Notice, AMFM Broadcasting Licenses, LLC SHALL PAY the
full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
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/Account Number and FRN Number referenced
above. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Requests for full payment under
an installment plan should be sent to: Chief Financial Officer -
Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
D.C. 20554. Please contact the Financial Operations Group Help Desk
at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
regarding payment procedures. AMFM shall also send electronic
notification on the date said payment is made to
Hillary.DeNigro@fcc.gov, Rebecca.Hirselj@fcc.gov and
14. The response, if any, must be mailed to Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, SW, Room 4-C330,
Washington, D.C. 20554, and must include the NAL/Account Number
referenced above. In addition, to the extent practicable, a copy of
the response, if any, should also be transmitted via e-mail to
Hillary.DeNigro@fcc.gov, Rebecca.Hirselj@fcc.gov, and
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 full payment of the full amount of this Notice of
Apparent Liability under an installment plan should be sent to: Chief
Financial Officer -- Financial Operations, Federal Communications
Commission, 445 12th Street, S.W., Room 1-A625, Washington, D.C.
20554. For answers to questions, please contact the Financial
Operations Group Help Desk at 1-877-480-3201 or Email:
17. IT IS FURTHER ORDERED that the complaint filed by the Complainant 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 AMFM Broadcasting
Licenses, LLC, 2625 S. Memorial Drive, Suite A, Tulsa, Oklahoma 74129
and to Andrew W. Levin, Executive Vice President and Chief Legal
Officer, Clear Channel, 200 East Basse Road, San Antonio, Texas
FEDERAL COMMUNICATIONS COMMISSION
Hillary S. DeNigro
Chief, Investigations and Hearings Division
See 47 U.S.C. S: 503.
47 C.F.R. S: 73.1216 (the "Contest Rule").
See Letter from Complainant to Federal Communication Commission, received
June 3, 2006 ("Complaint"). Included as a part of the Complaint are pages
from the Complainant's KOST Rewards Program account webpage which states
that the Contest "Raffle Opens" at 3:50 p.m. on May 29, 2006 and that the
"Raffle Closes" at 8:50 p.m. on June 2, 2006. One such page states:
"Congratulations to our winners: Mary Abbett Alex Bernstein Joe Ramirez"
and contains a notation by the Complainant that this page was posted "On
website about 4:00 pm 6/02."
See Complaint at 1 (Participants in the KOST Rewards program "earn points
by listening [to KOST(FM)] and doing various things on the KOST Rewards
website such as identifying a song played at a certain time. You can then
buy raffle tickets [to enter contests] with the points you have earned.").
See Letter from Benigno E. Bartolome, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, to AMFM Broadcasting Licenses, LLC,
dated December 20, 2006 ("LOI").
See Letter from Andrew W. Levin to Marlene H. Dortch, Secretary, Federal
Communications Commission, dated January 19, 2007 ("LOI Response").
See id. at 1.
See id. The LOI Response also states that "[p]romotions and/or
announcements and/or material concerning the Contest were not promoted
and/or broadcast on any other Clear Channel station." Id. at 2.
See id. at 6 (Attachment A).
See id. at 7 (Attachment B).
See id. at 4 (Exhibit 1) (Declaration of Daria Linvill).
See id. at 4 (Exhibit 1).
See id. at 2.
Id. at 4 (Exhibit 1).
See id. at 2. The Licensee notes that tickets for a performance that were
not picked up before the close of business on the day of that performance
were given to a Station staff member. See id.
See 47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 312(f)(1).
See H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and
Order, 6 FCC Rcd 4387, 4388 (1991).
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P: 10
(2001) ("Callais Cablevision") (issuing a Notice of Apparent Liability
for, inter alia, a cable television operator's repeated signal leakage).
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: 73.1216.
See 47 C.F.R. S: 73.1216, Note 1(b) ("Material terms include those factors
which define the operation of the contest and which affect participation
therein. Although the material terms may vary widely depending upon the
exact nature of the contest, they will generally include: how to enter or
participate; eligibility restrictions; entry deadline dates; whether
prizes can be won; when prizes can be won; the extent, nature and value of
prizes; basis for valuation of prizes; time and means of selection of
winners; and/or tie-breaking procedures.") (emphasis added).
Id., Note 2.
See WMJX, Inc., Decision, 85 FCC 2d 251, 269 (1981) (holding that proof of
actual deception is not necessary to find violations of contest rules, and
that the licensee, as a public trustee, has an affirmative obligation to
prevent the broadcast of false, misleading or deceptive contest
announcements); Amendment of Part 73 of the Commission's Rules Relating to
Licensee-Conducted Contests, Report and Order, 60 FCC 2d 1072 (1976).
See Headliner Radio, Inc., Memorandum Opinion and Order, 8 FCC Rcd 2962
(Mass Media Bur. 1993) (finding that the airing of a misleading
advertisement concerning a licensee's contest violated the Commission
contest rules because the contest was not then conducted "substantially as
announced or advertised"); Lincoln Dellar, Memorandum Opinion and Order, 8
FCC Rcd 2582, 2585 (Mass Media Bur. 1993) (finding that the cancellation
of a pre-announced contest violated the pertinent Commission rules because
the contest was not then conducted "substantially as announced").
Honeyradio, Inc., Memorandum Opinion and Order, 69 FCC 2d 833 (1978),
quoting Licensee-Conducted Contests, 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
See Amendment of Part 73 of the Commission's Rules Relating to
Licensee-Conducted Contests, Notice of Proposed Rulemaking, 53 FCC 2d 934
See LOI Response at 1, 4 (Exhibit 1 Declaration) (stating that on-air
promotions about the Rewards Program included announcements of prizes
available to Rewards Program participants), 6 (Attachment A) (providing a
transcript of a contest announcement that was broadcast over the air). See
also LOI Response at 7 (Attachment B) (providing the 6 scheduled time
slots of the daily on-air announcements during a 3-day period).
See id. at 2, 6 (Attachment A). Specifically, the transcript invites
listeners "to become a member of our new `KOST Rewards Program !!" and
"earn Rewards Points just by listening to `Coast 103!!'," and instructs
audience members to "then log on and use those points for great rewards
and `exclusive' contests!!" In one of the promotions offered during the
week of the broadcast, members could "enter-to-win tickets to see Les
Miserables at the Pantages Theatre on June 7th . . . ." Further, the
promotion directs listeners to the Station's website to enter the KOST
Rewards Program's "exclusive contests," but states that listeners are
required to listen to the Station's on-air broadcasts - "at 8:50 a.m.,
12:50, 2:50, 3:50, and 8:50 p.m. for the KOST `rewards songs'" -- in order
to earn the "points" necessary to enter these contests.
See id. at 2, 4 (Exhibit 1).
Id. at 2.
The Licensee admits that three Contest winners were chosen prior to the
close of the Contest entry time period. See id.
See 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), recons. denied 15 FCC Rcd 303
(1999) ("Forfeiture Policy Statement"); 47 C.F.R. S: 1.80(b).
See 47 U.S.C. S: 503(b)(2)(D); 47 C.F.R S: 1.80(c)(4).
See Clear Channel Broadcasting Licenses, Inc., Licensee of Station
WRUM(FM), Orlando, Florida, Notice of Apparent Liability, 21 FCC Rcd 6808,
6811 & n.26 (2006) (citing cases) (imposing a $6,000 forfeiture for
failure to conduct a contest as announced and advertised).
See id. We note that Clear Channel has violated our contest rule multiple
times, which could serve as a basis for imposing an even higher forfeiture
assessment in future items.
See 47 U.S.C. S: 503(b).
See 47 C.F.R. S:S: 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, AMFM
Broadcasting Licenses, LLC shall be the only party to this proceeding.
(Continued from previous page)
Federal Communications Commission DA 09-234
Federal Communications Commission DA 09-234