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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-06-IH-3489
SONSHINE FAMILY TELEVISION, INC. ) NAL/Acct. No. 200832080001
Licensee of Station WBPH-TV ) Facility ID No. 60850
Bethlehem, Pennsylvania ) FRN: 0006620066
)
FORFEITURE ORDER
Adopted: December 4, 2009 Released: December 7, 2009
By the Commission:
I. INTRODUCTION
1. In this Forfeiture Order, issued pursuant to Section 503(b) of the
Communications Act of 1934, as amended (the "Act"), we find that
Sonshine Family Television, Inc. ("Sonshine"), licensee of Station
WBPH-TV, Bethlehem, Pennsylvania, willfully and repeatedly violated
Section 317(a)(1) of the Act and Section 73.1212(a) of the
Commission's rules by failing to air required sponsorship
identification announcements. Based on a review of the facts and
circumstances, we find Sonshine liable for a forfeiture in the amount
of $32,000.
II. BACKGROUND
2. This case arises from several thousand complaints filed with the
Commission in January 2005, alleging payola violations involving
Armstrong Williams ("Williams"). The complaints, citing national news
reports, contended that Williams was paid by the Department of
Education ("DoEd") to promote the No Child Left Behind Act ("NCLB") in
broadcast programming that he produced or in which he appeared without
disclosing that fact to viewers or to the stations involved. Many of
the complaints identified numerous broadcast stations reported to have
aired such NCLB-related programming, which included the show "The
Right Side with Armstrong Williams" ("RSAW").
3. On February 14, 2005, the Enforcement Bureau ("Bureau") issued letters
of inquiry to Armstrong Williams' media company, Graham Williams Group
("GWG"), and to public-relations firm Ketchum, Inc. ("Ketchum").
Ketchum was the prime contractor with DoEd in connection with that
department's campaign to promote NCLB and GWG was a subcontractor of
Ketchum's in that endeavor. GWG and Ketchum responded to the LOIs.
4. The Bureau reviewed this evidence and identified those episodes in
which discussions of NCLB topics took place during the programs, but
no sponsorship disclosures appeared to have been made. The Bureau
thereafter issued further letters of inquiry to Sonshine, which the
Bureau identified as potentially having aired the programs.
5. In its response, Sonshine acknowledged that Station WBPH-TV aired five
different episodes of RSAW entitled "What is Faith," "Year End
Review," "Young Americans in Government," "National Security," and "On
Point with Rod Paige," on a total of ten occasions during the period
January 4, 2004, through July 5, 2004. During these episodes Williams
discussed the NCLB program. Although Sonshine's agreement with
Williams "call[ed] for payment of a nominal fee of $100 to [it] for
each broadcast," Sonshine acknowledged that "in all likelihood" its
station aired them without including any sponsorship identification,
because it believed no identification was necessary. Sonshine asserted
that any lack of sponsorship identifications was harmless and did not
violate Commission rules because the consideration exchanged was
nominal, it had no basis to conclude that sponsorship identifications
were required, and the sponsor of each broadcast was clear despite
lack of such identifications.
6. On October 18, 2007, the Commission released a Notice of Apparent
Liability for Forfeiture ("NAL"). In the NAL, we found that Sonshine
had failed to air required sponsorship identification announcements,
in apparent violation of the sponsorship identification laws and
rules, 47 U.S.C. S: 317(a)(1) and 47 C.F.R. S: 73.1212. Specifically,
we found that Sonshine aired five episodes of the program "The Right
Side with Armstrong Williams" ten times between January 4, 2004 and
July 5, 2004, in consideration for $100 per broadcast, without airing
required sponsorship identification announcements. Accordingly, we
proposed a forfeiture of $40,000 against Sonshine.
7. On November 19, 2007, Sonshine responded to the NAL, requesting the
forfeiture be cancelled or reduced. Sonshine maintains that its
violation was minor, and that it had made a good faith effort to
comply with the Commission's rules. It also asserts that it is unable
to pay the proposed forfeiture. In support of its claimed inability to
pay, Sonshine submitted audited financial statements for the three
most recent tax years and additional information concerning its
expenses. Finally, Sonshine argues that it has a history of complying
with the Commission's rules.
III. DISCUSSION
8. 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. 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.
9. In its response to the NAL, Sonshine does not deny that it violated
the Commission's rules, and we find by a preponderance of the evidence
that Sonshine willfully and repeatedly engaged in the violations
described in the NAL. More specifically, we find that Sonshine
willfully and repeatedly violated Section 317(a)(1) of the Act and
Section 73.1212(a) of the Commission's rules by failing to air
required sponsorship identification announcements.
10. We now turn to the proposed forfeiture amount, which in this case was
assessed in accordance with Section 503(b) of the Communications Act,
Section 1.80 of the Commission's rules, and the Commission's
forfeiture guidelines set forth in its Forfeiture Policy Statement. In
assessing forfeitures, Section 503(b) of the Act requires that we take
into account 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
matters as justice may require. As discussed further below, we have
examined Sonshine's response to the NAL pursuant to the aforementioned
statutory factors, our rules, and the Forfeiture Policy Statement, and
find no basis for cancellation of the forfeiture but reduce the
forfeiture amount from $40,000 to $32,000.
11. First, Sonshine asserts that its violation was minor because Williams
hosted and produced the program, and these facts would have informed
the public about who sought to persuade them of messages contained in
the program, implying that such information, in and of itself,
constituted an adequate identification under the circumstances of this
case. We rejected this argument in the NAL, however, and Sonshine
advances no new reason for us to revisit that conclusion here.
12. Sonshine further asserts that the NAL "did not...address how an
additional announcement would have accomplished the purpose of the
sponsorship identification rules, i.e., to inform the public
concerning by whom they are being persuaded. . . . " Sonshine claims
that the NAL also did not address "the apparent inconsistent standard
toward sponsorship identification requirements for public affairs
programs on the major television networks and the Enforcement Bureau's
standard for public affairs programs acquired by independent
television stations." Sonshine appears to suggest that the Commission
is unfairly imposing sponsorship identification requirements on it
that would not apply to television networks. These arguments lack
merit. First, the NAL explained at length why the Commission's rules
insist on proper sponsorship identification to prevent public
confusion or misunderstanding. Second, the instant case is
distinguishable from situations where a station may have, in fact,
purchased programming under a barter-type arrangement. In barter- type
arrangements, which can include network affiliation agreements, the
program supplier provides the station its program, which the station
purchases by allowing the program provider to use some or all of the
station's advertising airtime during the program. Thus, in barter
arrangements the broadcaster effectively purchases programming in
exchange for valuable consideration in the form of advertising time,
thereby immunizing the exchange from the sponsorship identification
requirement. Here, Sonshine accepted money in exchange for agreeing to
air the programs, rather than purchasing them under a barter-type
arrangement, and thereafter failed to make the sponsorship
identifications that were required. Finally, to the extent that
Sonshine is describing network affiliates as somehow immune from
sponsorship identification disclosure requirements, it has failed to
cite any precedent demonstrating that the Commission has granted such
immunity. Accordingly, Sonshine has failed to demonstrate that the
Commission has treated it unfairly by imposing a sponsorship
identification requirement.
13. Sonshine also asserts that its good faith efforts to comply with the
Commission's rules merit a cancellation or reduction of the forfeiture
amount. It points to its practices and policies concerning compliance
with sponsorship identification rules, and contends that the
Commission should regard its lack of compliance here as a "poorly
informed, but good faith, misunderstanding of the specific
requirements of the sponsorship identification rules." We have
previously reduced a forfeiture when the licensee has voluntarily
disclosed its conduct or taken corrective measures to remedy its
conduct before an investigation. The record evidence does not suggest,
however, that Sonshine took either of these steps. Accordingly, we
decline to cancel or reduce the forfeiture amount on this basis.
14. Sonshine also claims that it is unable to pay the assessed forfeiture,
and in support submits its audited financial statements for each of
the last three years. The Commission generally considers gross revenue
as the best indication of a licensee's inability to pay as
demonstrated by audited financial statements. If gross revenues are
substantial, then the mere fact that the business is operating at a
loss does not necessarily preclude forfeiture liability based on
inability to pay. Based on our review of Sonshine's financial
statements and the other materials submitted by the licensee, we find
no reason to reduce the forfeiture based on Sonshine's assertion that
it is unable to pay. The forfeiture is an appropriate percentage of
Sonshine's total operating revenues in recent years and is consistent
with Commission precedent.
15. Finally, Sonshine asks that we consider cancelling or reducing the
forfeiture amount based on its history of overall compliance with the
Commission's rules. We have reviewed our records and note no other
violations by Sonshine. Under similar circumstances, we have reduced
proposed forfeitures, and we find that doing so in this case is
appropriate. Consequently, we reduce Sonshine's forfeiture amount from
$40,000 to $32,000.
IV. ORDERING CLAUSES
16. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act
and Sections 0.111, 0.311, and 1.80(f)(4) of the Commission's rules,
Sonshine Family Television, Inc., IS LIABLE FOR A MONETARY FORFEITURE
in the amount of $32,000 for its willful and repeated violation of
Section 317(a)(1) of the Act and Section 73.1212(a) of the
Commission's rules.
17. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the rules within 30 days of the release of this
Forfeiture Order. If the forfeiture is not paid within the period
specified, the case may be referred to the Department of Justice for
collection pursuant to Section 504(a) of the Act. 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. Sonshine Family Television, Inc. will
also send electronic notification on the date said payment is made to
Hillary.DeNigro@fcc.gov, Ben.Bartolome@fcc.gov, and
Anjali.Singh@fcc.gov.
18. IT IS FURTHER ORDERED that a copy of this Forfeiture Order shall be
sent by First Class Mail and Certified Mail Return Receipt Requested
to Sonshine Family Television, Inc., 813 N. Fenwick Street, Allentown,
Pennsylvania 18109, and to its counsel, J. Geoffrey Bentley, Esq.,
2700 Copper Creek Road, Oak Hill, Virginia 20171.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
See 47 U.S.C. S: 503(b).
47 U.S.C. S: 317(a)(1).
47 C.F.R. S: 73.1212(a).
See Sonshine Family Television, Inc., Notice of Apparent Liability for
Forfeiture, 22 FCC Rcd 18686, 18689 (2007) ("NAL").
See id. at 18689-90.
See id. at 18690.
See Letters from William Freedman, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, to Williams and Ketchum, dated February 14,
2005.
See NAL at 18690.
See Letter from GWG to Kenneth M. Scheibel, Jr., Attorney, Investigations
& Hearings Division, Enforcement Bureau, dated April 6, 2005, and Letter
from Ketchum to William D. Freedman, Deputy Chief, Investigations &
Hearings Division, Enforcement Bureau, dated April 13, 2005.
See NAL at 18690.
See Letters from Benigno E. Bartolome, Jr., Deputy Chief, Investigations &
Hearings Division, Enforcement Bureau, to Sonshine, dated November 7,
2006, and January 31, 2007.
As noted in the NAL, this episode was referred to in our LOI to Sonshine
as entitled "Young Americans in Government," but that title actually
describes only the second segment of the episode. The first segment was
denominated "Profile of a Candidate." The title appearing at the beginning
of the whole episode - "Profile of Candidate/Americans" - appears to be a
composite of both segments' titles. See NAL at 18690 n.19.
See id. at 18690 n.20. Specifically, Sonshine acknowledges that it aired
the following episodes of RSAW over Station WBPH-TV: "What is Faith" aired
on January 6, March 4, March 8, and April 30, 2004; "Year End Review"
aired on January 4, 2004; "Young Americans in Government" aired on January
5, 2004; "National Security" aired on April 23, 2004; and "On Point with
Rod Paige" aired on March 19, April 12 and July 5, 2004. See Letters from
Sonshine to Benigno E. Bartolome, Jr., Deputy Chief, Investigations &
Hearings Division, Enforcement Bureau, dated December 22, 2006, March 2,
2007 and March 23, 2007. (The last response will hereinafter be the "March
23rd Response.").
See March 23rd Response at 2.
See id. at 2-5.
See NAL at 18686.
See id.
See id.
See id.
See Response to Notice of Apparent Liability, filed November 19, 2007
("NAL Response").
See id. at 2-3.
See id. at 3-5.
See id. at 6-37. Sonshine requested confidential treatment for these
materials.
See id. at 3.
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).
47 U.S.C. S: 312(f)(1).
H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
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.").
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.
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).
See 47 U.S.C. S: 503(b).
See 47 C.F.R. S: 1.80.
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 (1997), recons. denied, 15 FCC Rcd 303 (1999)
("Forfeiture Policy Statement").
See 47 U.S.C. S: 503(b)(2)(E).
See NAL Response at 2
See NAL at 18694.
See NAL Response at 2 n.2 (internal quotation marks omitted) (emphasis in
original omitted).
See id.
NAL, 22 FCC Rcd at 18694 P: 16.
See Review of the Commission's Regulations Governing Television
Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524,
3583 n.159 (1995) (citing Revision of Radio Rules and Policies, Report and
Order, 7 FCC Rcd 2755, 2784 n.113 (1992)) (describing network affiliation
agreements as a variant of time brokerage whereby the local affiliate
sells time to the network in exchange for desirable programming, station
compensation, and the opportunity to place local commercials within
popular national programs).
See Complaint of National Association for Better Broadcasting, Memorandum
Opinion and Order, 4 FCC Rcd 4988 (1989), affirmed sub nom., National
Association for Better Broadcasting v. Federal Communications Commission,
902 F.2d 1009 (D.C. Cir. 1990) (unpublished) (holding that sponsorship
identification was not required when station purchased syndicated program
with advertising time of more than nominal value, and that sponsorship
identification would be required had station received programming for free
or for nominal payment).
47 U.S.C. S: 317(a)(1) (requiring sponsorship identification when a
station accepts money for broadcasting a program); 47 C.F.R. S:
73.1212(a).
See NAL Response at 2-3.
See id. at 3.
See Note to Section 1.80(b)(4) of the rules, 47 C.F.R. S: 1.80(b)(4)
(listing "Good faith or voluntary disclosure" as a basis for adjusting
forfeitures downward); Radio One Licenses, Inc., Memorandum Opinion and
Order, 18 FCC Rcd 15964, 15965 (2003), recons. denied, Memorandum Opinion
and Order, 18 FCC Rcd 25481 (2003) (reducing $5,200 forfeiture assessed
for Emergency Alert System rule violations to $4,000 due to the licensee's
corrective measures prior to an investigation).
In its NAL Response, Sonshine requested confidential treatment of certain
business information contained in exhibits to its submission. See NAL
Response at 3. This Forfeiture Order discusses information that does not
pertain to that request, and it does not list specific revenues or
expenses. Accordingly, we need not rule on Sonshine's request. Until we do
so rule, we will honor Sonshine's request for confidential treatment of
these materials.
See Forfeiture Policy Statement, 12 FCC Rcd 17087, 17107 (1999) (internal
citations omitted).
See id. at 17107.
See PJB Communications of Virginia, Inc., Memorandum Opinion and Order, 7
FCC Rcd 2088, 2089 (1992) (forfeiture not deemed excessive where it
represented approximately 2.02 percent of the violator's gross revenues);
Hoosier Broadcasting Corporation, Memorandum Opinion and Order, 15 FCC Rcd
8640, 8641 (Enf. Bur. 2002) (forfeiture not deemed excessive where it
represented approximately 7.6 percent of the violator's gross revenues);
Afton Communications Corporation, Memorandum Opinion and Order, 7 FCC Rcd
6741, 6742 (CCB 1992) (subsequent history omitted) (forfeiture not deemed
excessive where it represented approximately 3.9% of the violator's
operating revenues). In this case, the forfeiture represents a smaller
percentage than those that issued in Hoosier Broadcasting Corp., and only
a nominally higher percentage compared to the forfeitures issued in PJB
Communications of Virginia, Inc., and Afton Communications Corporation. We
note, in particular, that although we used an average revenue including
Sonshine's 2004 revenues to calculate the percentage, the forfeiture is
particularly reasonable in light of Sonshine's greater revenues in 2005
and 2006, of which it forms an even lower percentage.
See NAL Response at 3.
See, e.g., SM Radio, Inc., Order on Review, 23 FCC Rcd 2429, 2430-2431
(2008) (affirming forfeiture reduction from $7,000 to $5,600 due to
licensee's history of compliance); Radio X Broadcasting Corporation,
Memorandum Opinion and Order, 21 FCC Rcd 12209 (2006) (affirming
forfeiture reduction from $20,000 to $16,000 due to licensee's history of
compliance.).
See 47 U.S.C. S: 503(b).
See 47 C.F.R. S:S: 0.111, 0.311, 1.80(f)(4).
See 47 U.S.C. S: 317(a)(1).
See 47 C.F.R. S: 73.1212(a).
See 47 U.S.C. S: 504(a).
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Federal Communications Commission FCC 09-108
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Federal Communications Commission FCC 09-108