******************************************************** 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 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.