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Clear Channel Communications NAL for Alleged Contest Rule Violation

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Released: January 19, 2012

Federal Communications Commission

DA 12-64

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Clear Channel Communications, Inc.

)
File No.: EB-08-IH-1738
)
NAL/Acct. No.: 201232080015
Ultimate Parent Company of
)
FRN: 0005780325
)
AMFM Broadcasting Licenses, LLC
)
Licensee of Stations KOST(FM), KHHT(FM),
)
Facility ID Nos. 34424, 35022,
KBIG-FM, and KYSR(FM), all of Los Angeles,
)
6360, and 36019
California;
)
)
Citicasters Licenses, Inc.
)
Licensee of Station KIIS-FM, Los Angeles,
)
Facility ID No. 19218
California;
)
)
Capstar TX LLC
)
Licensee of Station KFI(AM), Los Angeles,
)
Facility ID No. 34425
California
)

NOTICE OF APPARENT LIABILITY FOR FORFEITURE

Adopted: January 19, 2012

Released: January 19, 2012

By the Acting Chief, Investigations and Hearings Division, Enforcement Bureau:

I.

INTRODUCTION

1.
In this Notice of Apparent Liability For Forfeiture (“NAL”), we find that Clear Channel
Communications, Inc. (“Clear Channel” or “Licensee”), the ultimate parent company of the licensees of
commercial radio stations KOST(FM), KHHT(FM), KBIG-FM, KYSR(FM), KIIS-FM, and KFI(AM),
Los Angeles, California (the “Stations”),1 apparently willfully violated section 73.1216 of the
Commission’s rules by failing to “fully and accurately disclose the material terms of a contest.”2 Based
upon our review of the facts, we find the Licensee apparently liable for a monetary forfeiture in the
amount of twenty two thousand dollars ($22,000).


1 Stations KOST(FM), KHHT(FM), KBIG-FM, and KYSR(FM) are licensed to AM/FM Broadcasting Licenses,
LLC; Station KIIS-FM is licensed to Citicasters Licenses, Inc.; and Station KFI(AM) is licensed to Capstar TX
LLC. At the time of the complaint, the licensee of KFI(AM) was Capstar TX Limited Partnership. On December
18, 2009, the Commission approved the assignment of Station KFI(AM)’s license from Capstar TX Limited
Partnership to Capstar TX LLC (File No. BALH-20091202AIC), which was consummated on December 31, 2009.
At the time of the complaint, the licensee of KIIS-FM was Citicasters Licenses, L.P. On December 9, 2008, the
Commission approved the assignment of Station KIIS-FM’s license from Citicasters Licenses, L.P. to Citicasters
Licenses, Inc. (File No. BAL-20081201DGA), which was consummated on December 31, 2008.
2 47 C.F.R. § 73.1216.

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II.

BACKGROUND

2.
The Commission received a complaint on July 25, 2008, alleging that Clear Channel
failed to conduct its “Chevy” contest (the “Contest”) in accordance with its advertised terms and the
Commission’s rules.3 Specifically, the complainant alleges that Clear Channel conducted a Contest over
the Stations in which listeners were invited to prepare and submit video commercials for Chevrolet in an
effort to win the prize of an automobile.4 The complainant further alleges that the Contest was rigged
because the prize was awarded to a friend or family member of an employee of the Licensee and that the
winning video was submitted after the Contest submission deadline.5
3.
In response to the Complaint, the Enforcement Bureau (“Bureau”), by letter dated
September 23, 2008, inquired of Clear Channel concerning these allegations.6 Clear Channel responded
on October 30, 2008.7 The Bureau sent a further letter of inquiry to Clear Channel on November 25,
2009,8 to which it responded on December 17, 2009.9 In its LOI Response, Clear Channel denies the
allegation that the Contest was rigged and explains that, although the prize was awarded to a friend of one
of its employees, there were no irregularities involved and the selection was in accordance with the
Contest rules.10 In addition, Clear Channel states that no videos were submitted after the Contest
submission deadline.11 Finally, throughout its LOI Response, Clear Channel claims that the Contest was
conducted entirely online.12

III.

DISCUSSION

4.
Under section 503(b)(1) of the Communications Act of 1934, as amended (the “Act”),
any person who is determined by the Commission to have willfully or repeatedly failed to comply with


3 See complaint dated July 25, 2008, IC Number 08-R1037916 (“Complaint”).
4 See id.
5 See id.
6 See Letter from Benigno E. Bartolome, Deputy Chief, Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, to Clear Channel Communications, Inc., dated September 23, 2008 (“LOI”).
7 See Letter from Andrew W. Levin, Esq., Clear Channel Communications, Inc., to Rebekah Bina, Attorney
Advisor, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, dated
October 30, 2008 (“LOI Response”). In a letter accompanying its LOI Response, Clear Channel requested, pursuant
to 47 C.F.R. § 0.459, that the Commission afford confidentiality to certain documents included in its LOI Response
that contain proprietary information. See Letter from Tom W. Davidson, Esq., Akin Gump Strauss Hauer & Feld,
LLP, Counsel to Clear Channel Communications, Inc., to Marlene H. Dortch, Secretary, Federal Communications
Commission, dated October 30, 2008. Because this NAL does not disclose such information, we need not rule on the
confidentiality request. Unless and until we so rule, we will honor Clear Channel’s request for confidential
treatment of these documents. See 47 C.F.R. § 0.459(d)(1).
8 See Letter from Kenneth M. Scheibel, Assistant Chief, Investigations and Hearings Division, Enforcement Bureau,
to Clear Channel Communications, Inc., dated November 25, 2009 (“Further LOI”).
9 See Letter from Tom W. Davidson, Esq., Akin Gump Strauss Hauer & Feld, LLP, Counsel to Clear Channel
Communications, Inc., to Rebekah Bina, Attorney Advisor, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, dated December 17, 2009 (“Further LOI Response”).
10 See LOI Response at 11, 14-15.
11 See id. at 11.
12 See id. at 2-6.
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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.13 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.14 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,15 and the Commission has so interpreted the term in the section 503(b)
context.16 The Commission may also assess a forfeiture for violations that are merely repeated and not
willful.17 “Repeated” means that the act was committed or omitted more than once or lasts more than one
day.18 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.19 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.20 As described in greater detail below, we conclude under this
procedure that Clear Channel is apparently liable for a forfeiture in the amount of twenty two thousand
dollars ($22,000) for its apparent willful and repeated failure to fully and accurately disclose the material
terms of its Contest.
5.
Under section 73.1216 of the Commission’s rules, a broadcast licensee “that broadcasts
or advertises information about a contest it conducts shall fully and accurately disclose the material terms
of the contest.”21 Material terms, among other things, include any eligibility restrictions, means of
selection of winners, and the extent, nature and value of prizes.22
6.
We find that Clear Channel apparently violated section 73.1216 of the Commission’s
rules by failing to fully and accurately disclose the material terms of the Contest in the method prescribed
by the Commission’s rules. Clear Channel asserts that the Contest “was conducted on the Station
Websites, and not as an over-the-air contest.”23 It acknowledges, however, that the Stations broadcast
advertisements for the Contest.24 Clear Channel further acknowledges that its Contest rules were not


13 See 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1).
14 47 U.S.C. § 312(f)(1).
15 See H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
16 See, e.g., Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388
(1991).
17 See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of Apparent Liability for Monetary Forfeiture,
16 FCC Rcd 1359, 1362, para. 10 (2001) (“Callais Cablevision”) (issuing a Notice of Apparent Liability for, inter
alia
, a cable television operator’s repeated signal leakage).
18 Southern California Broadcasting Co., 6 FCC Rcd at 4388, para. 5; Callais Cablevision, Inc., 16 FCC Rcd at
1362, para. 9.
19 See 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
20 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591, para. 4 (2002) (forfeiture paid).
21 See 47 C.F.R. § 73.1216.
22 See id., nn. 1(b)-2.
23 See LOI Response at 3, 5-6 & Exhibit I. The six Stations are KFI(AM), KOST(FM), KHHT(FM), KIIS-FM,
KBIG-FM, and KYSR(FM).
24 See id. at 6.
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broadcast, but instead were made available via the Stations’ websites.25 By asserting that the Contest was
conducted “on the Station websites,” Clear Channel appears to imply that the Contest was not subject to
the Commission rule’s requirements, or that, alternatively, its method of disclosure was otherwise
mitigating or exculpating. The Commission, however, has previously found a licensee liable under
section 73.1216 in a case where the licensee promoted its contest through broadcast even though the
contest itself was conducted principally through its website.26 Thus, Clear Channel’s broadcast promotion
of the Contest renders it fully subject to the Commission’s rule.27 Moreover, the Commission has found
that licensees cannot avail themselves of alternative non-broadcast announcements to satisfy the
requirement that they accurately announce a contest’s material terms.28 The Commission’s rules clearly
provide that “[t]he material terms should be disclosed periodically by announcements broadcast on the
station
conducting the contest.”29 The Commission’s rules provide that while disclosure by non-
broadcast means (such as on a website) can be considered in determining whether adequate disclosure has
been made, any non-broadcast disclosures must be “[i]n addition to the required broadcast
announcements” and cannot substitute for them.30 Accordingly, we find that Clear Channel’s failure to
broadcast the material terms of the Contest constitutes a violation of section 73.1216.
7.
In addition, we find that Clear Channel violated section 73.1216 by failing to accurately
disclose its Contest’s material terms by providing conflicting information to listeners as to when the
submissions were due. 31 Specifically, we note that the Contest Period is defined in paragraph three of the
Stations’ Official Contest Rules as encompassing the period from February 11, 2008, to March 21,
2008.32 Further, paragraph seven of the Official Contest Rules stipulates that “[a]ll [s]ubmissions . . .
must be received by the close of the Contest Period.”33 This information conflicts temporally with the
information provided in paragraph nine of the rules, which provides that “[o]n or about March 10, 2008[,]
a panel of impartial judges shall consider all submissions received by the Contest deadline (as defined
herein), and select no less than two (2) and nor [sic] more than twenty (20) [f]inalists” which will be
posted on the Stations’ websites for the purpose of allowing listeners to vote “for the best of the


25 See id.
26 See AMFM Broadcasting Licenses, LLC, Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 1529 (Enf.
Bur., Investigations & Hearings Div. 2009) (rejecting Clear Channel’s argument that the contest in that case was
conducted solely via the Station’s website when on-air announcements were also made) (“AMFM Broadcasting”).
27 See 47 C.F.R. § 73.1216 (“[a] licensee that broadcasts or advertises information about a contest it conducts shall
fully and accurately disclose the material terms of the contest . . .”) (emphasis added); see also AMFM
Broadcasting
, 24 FCC Rcd at 1532, para. 8.
28 See AK Media Group, Inc., Notice of Apparent Liability for Forfeiture, 15 FCC Rcd 7541, 7543 (Enf. Bur. 2000)
(finding contest rule violation for failure to broadcast a contest’s material term and holding that posting rules at the
station and on a website do not suffice to satisfy rule); Clear Channel Broadcasting Licenses, Inc., Notice of
Apparent Liability for Forfeiture, 15 FCC Rcd 2734, 2735 (Enf. Bur. 2000) (finding contest rule violation for failure
to broadcast a contest’s material term and holding that posting rules at the station’s website, standing alone, does not
satisfy rule’s requirements) (Clear Channel Broadcasting).
29 See 47 C.F.R. § 73.1216 n.2 (emphasis added).
30 See id.
31 See LOI Response & Exhibit E (“Official Contest Rules”).
32 See LOI Response & Exhibit E at 1.
33 See LOI Response & Exhibit E at 3.
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[f]inalists” during the period from March 12 to March 21, 2008.34 Thus, there is a discrepancy as to
whether the deadline for submissions was March 10 or March 21, 2008, that may have confused listeners
and Contest participants.
8.
Finally, with respect to the Complaint’s allegation of contest rigging,35 we are persuaded
that there were no violations of the pertinent statute, 47 U.S.C. § 509.36 Clear Channel submitted
evidence that credibly refutes these allegations.37 As the record reflects, the ultimate winner was selected
by audience and website viewer vote, not by the Licensee’s selection, which undermines the
complainant’s charges of manipulation.38 Thus, we are persuaded that no rigging occurred in this
instance.
9.
Based upon the evidence before us, and in view of the applicable law and Commission
precedent, we find that Clear Channel apparently willfully violated section 73.1216 of the Commission’s
rules. The Commission’s Forfeiture Policy Statement and section 1.80 of the Commission’s rules specify
a base forfeiture amount of four thousand dollars ($4,000) for each violation of section 73.1216.39 In
assessing the monetary forfeiture amount, we must take into account the statutory factors set forth in
section 503(b)(2)(E) of the Act and section 1.80 of the Commission’s rules,40 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.41
We believe that the substantial revenues of Clear Channel42 and its previous violations of Commission


34 See id. Further compounding this confusion is the fact that “Contest deadline” is not defined in the Official
Contest Rules.
35 The complainant alleged that the Contest prize was awarded to a friend or family member of an employee of the
Licensee, and that the winning video was submitted after the Contest submission deadline, but provided no evidence
of rigging. See Complaint.
36 47 U.S.C. § 509 (Prohibited Practices in Case of Contests of Intellectual Knowledge, Intellectual Skill, or
Chance).
37 See LOI Response at 3-4 & Exhibit E - The Chevrolet “Make Your Own Commercial” Contest Official Rules
(“Official Contest Rules”), and Further LOI Response at 4 & Exhibit 1. Clear Channel’s responses are supported by
sworn declarations of Jim Murphy, Vice President, Business Affairs, Clear Channel Los Angeles; Jeff Thomas, Vice
President, Director of Sales, Clear Channel Los Angeles; Michele Laven, Director of Integrated Media, Clear
Channel Los Angeles; and Noah Caldwell, Integrated Media Designer, Clear Channel Los Angeles. See LOI
Response at Exhibit K and Further LOI Response at Exhibit 2.
38 See LOI Response at 4 and Application of WorldCom, Inc. and MCI Communications Corporation for Transfer of
Control of MCI Communications Corporation to Worldcom, Inc.
, Memorandum Opinion and Order, 13 FCC Rcd
18025, 18134 ¶ 193 (1998) (citing 47 C.F.R. § 1.17 for proposition that, in light of their duty to be truthful and
accurate in their representations to the Commission, statements provided by Commission licensees in response to
investigatory or adjudicatory matters within the Commission’s jurisdiction are awarded substantial weight in the
absence of persuasive evidence to the contrary).
39 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. § 1.80(b).
40 See 47 U.S.C. § 503(b)(2)(E); 47 C.F.R § 1.80(b)(4).
41 See id.
42 In 2010, Clear Channel and its consolidated subsidiaries had revenues of more than $5.86 billion. See United
States Securities and Exchange Commission Form 10-K, Annual Report, Clear Channel Communications, Inc.
(2010) at 26. Therein, Clear Channel noted that it is the “largest radio broadcaster in the United States (based on
(continued….)
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rules43 warrant a proposed forfeiture above the base amount. We also note that six radio stations
participated in the contest at issue. Accordingly, the instant case warrants an upward adjustment from the
base forfeiture amount. After considering all the foregoing factors, and in view of the particular facts of
this case, we find that Clear Channel is apparently liable for a forfeiture in the amount of twenty two
thousand dollars ($22,000).44 In view of today’s action, and in light of Clear Channel’s prior history of
non-compliance, we caution that the imposition of even higher forfeitures may result in the future if such
misconduct persists.

IV.

ORDERING CLAUSES

10.

ACCORDINGLY, IT IS ORDERED

, pursuant to section 503(b) of the Act,45 and
sections 0.111, 0.311, and 1.80 of the Commission’s rules,46 that Clear Channel Communications, Inc. is
hereby

NOTIFIED

of its

APPARENT LIABILITY FOR FORFEITURE

in the amount of twenty two
thousand dollars ($22,000) for apparently willfully and repeatedly violating section 73.1216 of the
Commission’s rules.
11.

IT IS FURTHER ORDERED

, pursuant to section 1.80 of the Commission’s rules, that
within thirty (30) days of the release of this NAL, Clear Channel Communications, Inc.

SHALL PAY

the
full amount of the proposed forfeiture or

SHALL FILE

a written statement seeking reduction or
cancellation of the proposed forfeiture.
12.
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, Missouri 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 payment of the full amount 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. Please contact the Financial Operations Group
Help Desk at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions regarding payment
(Continued from previous page)


revenues). As of December 31, 2010, [it] owned 892 domestic radio stations servicing approximately 150 U.S.
markets, including 47 of the top 50 markets and 89 of the top 100 markets.” Id. at 1-2.
43 See, e.g., Clear Channel Broadcasting Licenses, Inc., Licensee of Station WRUM(FM), Orlando, Florida, Notice
of Apparent Liability, 21 FCC Rcd 6808 (Enf. Bur. Investigations & Hearings Div. 2006) (imposing a $6,000
forfeiture for failure to conduct a contest as announced and advertised) (forfeiture paid); see also AMFM
Broadcasting
, 24 FCC Rcd 1529 (Enf. Bur. Investigations & Hearings Div. 2009) (imposing a $6,000 forfeiture for
failure to conduct a contest on KOST(FM) as announced and advertised) (forfeiture paid); Clear Channel
Broadcasting
, 15 FCC Rcd 2734 (Enf. Bur. 2000) (imposing $4,000 forfeiture for failure to disclose a material term
of the contest); Capstar TX Limited Partnership, Notice of Apparent Liability for Forfeiture, 20 FCC Rcd 10636
(Enf. Bur. Investigations & Hearings Div. 2005) (forfeiture paid); Citicasters, Co., Notice of Apparent Liability for
Forfeiture, 15 FCC Rcd 16612, 16613-14 (Enf. Bur. 2000).
44 See id. As noted above, Clear Channel has violated our contest rule multiple times.
45 See 47 U.S.C. § 503(b).
46 See 47 C.F.R. §§ 0.111, 0.311, and 1.80.
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procedures. Clear Channel will also send electronic notification on the date said payment is made to
Terry.Cavanaugh@fcc.gov, Jeffrey.Gee@fcc.gov, Kenneth.Scheibel@fcc.gov, and
Amelia.Brown@fcc.gov.
13.
The response, if any, must be mailed to Theresa Z. Cavanaugh, Acting Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, SW, Room 4-C330, Washington, D.C. 20554, and

SHALL INCLUDE

the NAL/Acct.
number referenced above. In addition, to the extent practicable, a copy of the response, if any, should
also be transmitted via e-mail to Terry.Cavanaugh@fcc.gov, Jeffrey.Gee@fcc.gov,
Kenneth.Scheibel@fcc.gov, and Amelia.Brown@fcc.gov.
14.
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.
15.

IT IS FURTHER ORDERED

that the Complaint in this proceeding

IS GRANTED

to
the extent indicated herein and

IS OTHERWISE DENIED

, and the complaint proceeding

IS HEREBY
TERMINATED

.47
16.

IT IS FURTHER ORDERED

that a copy of this NAL shall be sent, by First Class Mail
and Certified Mail-Return Receipt Requested, to Clear Channel Communications, Inc., 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 78209-8328.
FEDERAL COMMUNICATIONS COMMISSION
Theresa Z. Cavanaugh
Acting Chief, Investigations and Hearings Division
Enforcement Bureau


47 For purposes of the forfeiture proceeding initiated by this NAL, Clear Channel Communications, Inc. shall be the
only party to this proceeding.
7

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