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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
AMFM TEXAS LICENSES LIMITED ) File No. 99050522
PARTNERSHIP ) NAL/Acct. No. 200132080004
) Facility ID# 23084
Licensee of Station KHKS(FM) ) JJS
Denton, Texas )
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 Texas Licenses Limited Partnership (``AMFM''), licensee
of Station KHKS(FM), Denton, Texas, apparently liable for a
forfeiture in the amount of four thousand dollars ($4,000) for
violating Section 317(a)(1) of the Communications Act of 1934, as
amended (``Act''), 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,
as part of an agreement with A&M Records under which the station
received consideration without airing 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.
4. Mr. John Cook, Vice President, Operations for KHKS(FM),
recalls that he first received a copy of ``On A Day Like Today''
in the late summer of 1998 with a note indicating that Bev Tilden
liked the song. Shortly afterwards, Mr. Cook received a call
from Tom Poleman, who was then the Program Director at Chancellor
station WHTZ, asking if Mr. Cook had heard the single, if he
liked it, and if he was interested in having Bryan Adams appear
at a Christmas concert for KHKS listeners. Mr. Cook recalls
telling Mr. Poleman that while he did not think the song would be
a hit, he would consider playing the song and having Bryan Adams
appear at the station's Christmas concert. Mr. Cook claims that
he was indifferent whether or not Bryan Adams would appear at
that concert. Mr. Cook states that he did not think Mr. Poleman
was attempting to persuade him to play the song by offering Mr.
Adams' appearance.
5. 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 KHKS(FM)), make Mr. Adams available for live
concerts in various cities with Chancellor stations, and provide
CDs, airfare, and seats for contests. The agreement provided that
KHKS(FM) would receive $30,400. In return, the Chancellor
stations would 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.
The agreement described the Dallas concert as ``Pending'' for
December 12, as opposed to ``firm'' concerts in Boston, New York,
and Orlando.
6. Mr. Cook subsequently received a call from Chuck
Armstrong, who was Chancellor's Senior Vice President
Entertainment/New Media. According to Mr. Cook, Mr. Armstrong
told him that the ``strike'' date for ``On A Day Like Today'' was
that day and that ``everyone'' was adding the song that day. Mr.
Cook declares that Mr. Armstrong told him that he would have to
play the song 14 times a week. Mr. Cook stated that he added the
song to the station's rotation ``due to this pressure from
Armstrong.'' The decision to add the song deviated from Mr.
Cook's normal selection criteria. The station's play lists
indicated that ``On A Day Like Today'' was added during the week
of September 28 to October 4, 1998.
7. In October 1998, A&M questioned Mr. Armstrong and John
Bassanelli, Chancellor's Managing Director, about what it
believed to be insufficient airplay of ``On A Day Like Today'' on
KHKS. Messrs. Armstrong and Bassanelli attempted to speak with
Mr. Cook, but Mr. Cook did not return their telephone calls.
Steve Rivers, Chancellor's Chief of Programming, then reached Mr.
Cook and told him to follow through on his ``commitment'' to the
Bryan Adams campaign. Mr. Cook recalls that Mr. Rivers asked him
to give the song better day part visibility. At some point, Mr.
Cook requested his staff to play the song during the day at least
once a day.
8. On November 10, 1998, Morty Wiggins of A&M Records sent
a letter to Chuck Armstrong of Chancellor canceling Mr. Adams'
appearance at the KHKS(FM) concert. Brenda Adriance, the General
Manager of KHKS(FM), told Mr. Cook that the concert was canceled
because of the lack of airplay of ``On A Day Like Today'' on the
station.
9. The station's play lists indicate that ``On A Day Like
Today'' was added during the week of September 28 to October 4.
From the period of October 5 through November 1, the song was
played seven times a week. During the week of November 2 through
8, the station played the song 12 times. The following week, the
song was played 11 times. The song was then dropped from the
station's rotation.
10. 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
11. 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. . . .
12. In this case, AMFM apparently violated those provisions
by playing ``On A Day Like Today'' without airing appropriate
sponsorship identification announcements. While the written
agreement between Chancellor and A&M did not mention airplay of
the song, under the specific circumstances involving KHKS(FM), we
conclude that airplay of the record became part of the quid pro
quo for the consideration the station received from A&M. That
conclusion is based upon Mr. Cook's admission that he would not
have played ``On A Day Like Today'' except for the pressure he
received from Chancellor Entertainment management. The
management officials clearly applied that pressure because of
their attempt to support their agreement with A&M. Stated
another way, but for the existence of the agreement between A&M
and Chancellor, and the consideration the station received as
part of that agreement, the station would not have played ``On A
Day Like Today.'' Accordingly, it appears that the playing of
``On A Day Like Today'' was linked to the consideration the
station received from A&M. Since the station did not air
sponsorship identification announcements when it played the
record, it apparently violated Section 317 of the Act and Section
73.1212 of our rules.
13. 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.
14. 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
15. 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.
16. 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.
17. 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.
18. 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. 19. 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.