******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect or Word to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the Word or WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) AMFM RADIO LICENSES, L.L.C. ) File No. 99050522 ) NAL/Acct. No. 200132080003 Licensee of Station WKQI(FM) ) Facility ID# 6592 Detroit, Michigan ) JJS ) NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: October 11, 2000 Released: October 12, 2000 By the Chief, Enforcement Bureau: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture, we find AMFM Licenses, L.L.C. (``AMFM''), licensee of Station WKQI(FM), Detroit, Michigan, apparently liable for a forfeiture in the amount of four thousand dollars ($4,000) for a violation of Section 317(a)(1) of the Communications Act of 1934, as amended, 47 U.S.C. § 317(a)(1), and Section 73.1212 of the Commission's rules, 47 C.F.R. § 73.1212, which requires licensees, among other things, to make sponsorship identification announcements whenever a station broadcasts matter in return for money, service, or other valuable consideration. We find that AMFM broadcast a record, ``On A Day Like Today'' by Bryan Adams, in consideration for Mr. Adams' agreement to appear at a concert sponsored by the station, without airing required sponsorship identification announcements. II. BACKGROUND 2. On February 2, 1998, John Madison, Sr., the Senior Vice President Regional Operations for Chancellor Media Corporation (``Chancellor''), the parent corporation of the licensee,1 invited other Chancellor executives and representatives from record labels to discuss ways that record labels could use Chancellor stations to better introduce and promote records. Following that meeting, which took place in New York in February 1998, Chancellor and Mercury Records developed a marketing campaign for Shania Twain to market her as a Top 40 artist. The campaign included sixty second artist profile spots featuring the artist speaking about her music, excerpts from her song, and a ``retail tag'' informing listeners where they could purchase her CD. Chancellor viewed that campaign to be highly successful. 3. Following the Shania Twain campaign, Chancellor began marketing these types of campaigns to record labels. In June or July 1998, representatives of A&M Records played ``On a Day Like Today,'' a song by Bryan Adams, to John Ivey, the Program Director at Chancellor station WXKS, Boston, Massachusetts. Subsequently, on July 15, 1998, A&M representatives met with Mr. Madison and Bev Tilden, Chancellor's Vice President of Marketing, to discuss a marketing campaign for that song. After a couple of months of negotiations, on September 23, 1998, Chancellor and A&M entered into an agreement. Under the agreement, A&M would purchase commercials on ten Chancellor stations (including WKQI- FM), make Mr. Adams available for live concerts in various cities with Chancellor stations, and provide CDs, airfare, and seats for contests. In return, the Chancellor stations agreed to run live and recorded announcements, liners, promos, and contests promoting the new Bryan Adams song. The stations also agreed to provide hotel accommodations and spending money for the contests. In the written agreement, Chancellor did not make any representations concerning playing the Adams single. 4. On November 10, 1998, Morty Wiggins of A&M Records sent a letter to Chuck Armstrong of Chancellor canceling Mr. Adams' appearance at a concert in Dallas. On the afternoon of November 11, Mr. Wiggins called John Bassanelli, Chancellor's Managing Director, to say that Mr. Adams would not perform at WKQI's concert because the cancellation of the Dallas show had made it prohibitively expensive for Mr. Adams to be on the road for the December 9, 1998 Detroit show. According to Chancellor, Tom O'Brien, the station's Program Director, ``was frantic at the prospect of a concert cancellation'' because the station had promoted the concert, secured a venue, and booked other acts to appear with Mr. Adams. Mr. O'Brien then made ``various promises and concessions'' in the hope of saving the concert. Later on November 11, 1998, Mr. Bassanelli wrote a letter to Mr. Wiggins stating ``Per Tom O'Brien, the stations will commit to the following items in return for a firm and non-cancelable performance by Bryan Adams: 1. Immediate increase of spins of the current single `On A Day Like Today' to a minimum of 25 times per week through the week ending December 26. The station will guarantee and fair and even [sic] rotation through critical day parts. 2. Guaranteed immediate add (out of the box) of the next release with a minimum 15 spins per week for five (5) weeks.'' The station also agreed to move the concert date to December 13, 1998 and to provide a station appearance at a local record retailer of A&M's or Mr. Adams' choosing. 5. After November 11, the station played ``On A Day Like Today'' considerably more often and at more favorable times than prior to that date. From November 5 through November 11, WKQI played the record 13 times, and over half of those plays were between midnight and 6:00 a.m. From November 12 through November 18, the station played the record 29 times, and over half of those plays were between 7:00 a.m. and 7:00 p.m. Except for Saturday, November 28 and Saturday, December 5, the station played ``On A Day Like Today'' at least three times a day every day from November 11 through December 13. See January 18, 2000 Response to Letter of Inquiry, Exhibit 11. The station did not air any sponsorship identification announcements in connection with the playing of the record. After the concert, the station only played ``On A Day Like Today'' nine more times (during the period from December 14 through December 21). The station never played the ``next release'' referred to in the November 11 letter. 6. According to AMFM, Messrs. Bassanelli and O'Brien did not consult with the Chancellor Legal Department, outside counsel, or more senior Chancellor executives before reaching their agreement with A&M. On December 23, 1998, after publication of newspaper articles reporting on the relationships between record companies and radio station groups, Jimmy de Castro, Chancellor's Chief Operating Officer, sent a memorandum to all Chancellor Radio Group employees stating ``our promotional packages do not and may not include increased airplay as part of the deal. We do NOT accept `pay for play' arrangements (either direct or indirect) and we do NOT make airplay decisions based on the sale of these packages.'' III. DISCUSSION 7. Section 317(a)(1) of the Act provides: All matter broadcast by any radio station for which any money, service or other valuable consideration is directly or indirectly paid, or promised to or charged or accepted by, the station so broadcasting, from any person, shall, at the time the same is so broadcast, be announced as paid for or furnished, as the case may be, by such person: Provided, That "service or other valuable consideration" shall not include any service or property furnished without charge or at a nominal charge for use on, or in connection with, a broadcast unless it is so 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. Similarly, Section 73.1212(a) of the Commission's rules provides, in pertinent part: When a broadcast station transmits 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 station, the station, at the time of the broadcast, shall announce: (1) That such matter is sponsored, paid for, or furnished, either in whole or in part, and (2) By whom or on whose behalf such consideration was supplied. . . . 8. In this case, AMFM apparently violated those provisions by not airing sponsorship identification announcements during the times it played ``On A Day Like Today'' pursuant to the station's November 11 agreement with A&M Records. Under that agreement, the station agreed, among other things, to increase the number of times it would play the record in return for ``a firm and non- cancelable performance by Bryan Adams'' at the station's concert. 9. AMFM argues that while the station made an airplay commitment, ``because the concert was already promised in connection with the promotion as originally planned, no additional consideration was given by Adams or A&M in return for the commitment on airplay.'' See May 27, 1999 Response to Letter of Inquiry, p. 4. We reject that argument as contrary to the language of the agreements, as well as the language and intent of the rule. The original agreement between Chancellor and A&M only provided that the Detroit concert was a ``pending'' concert, as opposed to the ``firm'' concerts in Boston, New York, and Orlando. In contrast, when the station agreed to increase the number of times it would play ``On A Day Like Today,'' it received, in return, a ``firm and non-cancelable performance'' by Mr. Adams. Thus, AMFM clearly received an additional benefit in return for the promised airplay. Moreover, AMFM's statement that Mr. O'Brien ``made various promises and concessions in the hope of saving the concert'' further demonstrates that his commitment to play the record more often was part of the consideration he was offering in return for the concert. Moreover, subject to exceptions that are not pertinent here, Section 73.1212 requires sponsorship identification announcements whenever ``money, service, or other valuable consideration is either directly or indirectly paid or promised to, or charged to or accepted by such station . . . .'' That broad language clearly encompasses the agreement between the station and A&M. Since the station received the consideration of a ``firm'' concert in return for playing ``On A Day Like Today,'' and since the station did not air sponsorship identification announcements when it played the song, the station apparently violated Section 317 of the Act and Section 73.1212 of the Commission's rules. 10. Section 503(b) of the Communications Act, 47 U.S.C. § 503(b), and Section 1.80(a) of the Commission's rules, 47 C.F.R. § 1.80(a), both state that any person who willfully or repeatedly fails to comply with the provisions of the Communications Act or the Commission's rules shall be liable for a forfeiture penalty. For purposes of Section 503(b), the term ``willful'' means that the violator knew it was taking the action in question, irrespective of any intent to violate the Commission's rules. See Southern California Broadcasting Co., 6 FCC Rcd 4387 (1991). Furthermore, a continuing violation is ``repeated'' if it lasts more than one day. Id., 6 FCC Rcd at 4388. 11. The Commission's Forfeiture Policy Statement sets a base forfeiture amount of $4,000 for sponsorship identification violations.2 After considering the record and all of the factors contained in Section 503(b)(2)(D) of the Act, 47 U.S.C. § 503(b)(2)(D), and the Forfeiture Policy Statement, we believe a $4,000 forfeiture is appropriate in this case. IV. ORDERING CLAUSES 12. 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,3 AMFM is hereby NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of four thousand dollars ($4,000) for willfully and repeatedly violating Section 73.1212 of the Commission's rules. 13. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's rules, that within thirty days of the release of this Notice, AMFM SHALL PAY to the United States the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 14. Payment of the forfeiture may be made by credit card through the Commission's Credit and Debt Management Center at (202) 418-1995 or by mailing a check or similar instrument, payable to the order of the Federal Communications Commission, to the Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. The payment should note the NAL/Acct. No. referenced above. 15. The response, if any, must be mailed to Charles W. Kelley, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445 12th Street, S.W, Room 3-B443, Washington DC 20554 and MUST INCLUDE the file number listed above. 16. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by Certified Mail/Return Receipt Requested, to AMFM's counsel, Eric L. Bernthal, Esq., Latham & Watkins, 1001 Pennsylvania Avenue, N.W., Suite 1300, Washington, DC 20004-2505. FEDERAL COMMUNICATIONS COMMISSION David H. Solomon Chief, Enforcement Bureau _________________________ 1 Chancellor is now named AMFM, Inc. Since the corporation was known as Chancellor during the time of the events in question, we will refer to the corporation as Chancellor. 2 The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Commission's Rules, 12 FCC Rcd 17087, 17114 (1997), recon. denied 15 FCC Rcd 303 (1999); 47 C.F.R. § 1.80(b). 3 47 C.F.R. §§ 0.111, 0.311 and 1.80.