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Before the
Federal Communications Commission
Washington, D.C. 20554
)
File No. EB-09-IH-0756
In the Matter of )
FRN: 0015043227
GOOD KARMA BROADCASTING, LLC )
NAL/Account No.:
Licensee of Station WKNR(AM), Cleveland, ) 201132080018
Ohio
) Facility ID No. 28509
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: December 8, 2010 Released: December 8, 2010
By the Chief, Investigations and Hearings Division, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we
propose a monetary forfeiture in the amount of $4,000 against Good
Karma Broadcasting, LLC ("Good Karma" or the "Licensee"), licensee of
Station WKNR(AM), Cleveland, Ohio (the "Station"), for its apparent
willful and repeated violation of Section 73.1216 of the Commission's
rules. As discussed below, we find that Good Karma violated the
contest rule requirements by broadcasting information about a contest
without fully and accurately disclosing all of its material terms.
II. BACKGROUND
2. The Enforcement Bureau (the "Bureau") received a complaint (the
"Complaint") alleging that the Station had conducted a "bogus" contest
called "Who Said That" (the "Contest") during the "Really Big Show" on
weekdays from 10:00 a.m. to noon, since approximately November 2007.
Specifically, the Complainant alleged that the Station provided no
clues, cut-off callers on-air, stopped discussing prizes, and provided
"no real payoff" for Contest winners.
3. On June 19, 2009, and August 26, 2009, the Bureau sent letters of
inquiry to the Licensee. In response, Good Karma admitted that,
regularly during early 2007 to the summer of 2008, and then
sporadically thereafter until September 4, 2009, the Station aired a
"bit" called "Who Said That?" during "The Really Big Show with Tony
Rizzo." Good Karma states that, during broadcasts of the Contest, the
Station aired a voice recording of an unnamed individual in the sports
world and listeners called in or sent an e-mail to the Station to try
to correctly identify the speaker. If the listener correctly
identified the speaker, the Station awarded a prize to the winner.
After a winner was named, the Station aired a clip of another unnamed
individual, and the Contest continued.
4. The Licensee asserts that Station staff mentioned certain basic
"material terms" on-air as they discussed the Contest. According to
the Licensee, these "material terms" included certain facts about how
the Contest worked, including that: (1) the program host airs the
clip; (2) listeners call the studio telephone line or send an e-mail
and attempt to correctly identify the voice in the clip; (3) if the
listener correctly identifies the voice in the clip, a prize is
awarded; and (4) once the voice in the clip is correctly identified, a
new clip is selected and the bit continues. The Licensee also notes
that it posts general contest rules applicable to all Station contests
on its website.
5. The Station conducted the Contest regularly and as planned with
certain sports clips, but that practice changed when the Station began
airing the last clip, which aired from the fall of 2007 until the
Station concluded the Contest on September 4, 2009. Good Karma notes
that no one correctly identified the speaker in the last clip for more
than twenty months. Good Karma states that when the Station began
airing the last clip from the fall of 2007 continuing until the summer
of 2008, the Station aired a prize announcement during each weekday,
two-hour program and notified listeners that additional prizes would
be added each week. The Licensee admits, however, that the Station did
not announce the entire list of accumulated prizes, instead
"identify[ing] the new prize and emphasiz[ing] material prizes in the
package." Between the summer of 2008 and September 4, 2009,
announcements concerning the Contest became more infrequent, limited
to approximately three or four times per week and then only when
callers brought up the topic. At that time, according to Good Karma,
some originally-identified prizes were no longer available. Although
the Station did not announce any change in the prizes, Good Karma
claims that if someone had correctly identified the speaker in the
last clip, the Station would have offered a similar package of prizes
to what was originally announced based on what was available in the
Station's prize closet or offered by an advertiser at that time.
III. DISCUSSION
6. 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 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. 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. 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. As
described in greater detail below, we conclude under this procedure
that Good Karma is apparently liable for a forfeiture in the amount of
$4,000 for its apparent willful and repeated violation of Section
73.1216 of the Commission's rules.
7. Section 73.1216 provides: "A licensee that broadcasts or advertises
information about a contest it conducts shall fully and accurately
disclose the material terms of the contest, and shall conduct the
contest substantially as announced or advertised. No contest
description shall be false, misleading, or deceptive with respect to
any material term." Material terms under the rule "include those
factors which define the operation of the contest and which affect
participation therein," and generally include, among other things,
instructions on "how to enter or participate; eligibility
restrictions; . . . whether prizes can be won; when prizes can be won;
. . . the extent, nature and value of prizes; [and] time and means of
selection of winners; . . . ." Although licensees have discretion in
determining the time and manner of disclosing a contest's material
terms, and need not enumerate the terms each time it airs an
announcement promoting a contest, "the obligation to disclose the
material terms arises at the time the audience is first told how to
enter or participate [in the contest] and continues thereafter."
Finally, disclosure of material terms must be by announcements
broadcast on the station; non-broadcast disclosures of material terms
can be made to supplement, but not substitute for, broadcast
announcements.
8. Licensees, as public trustees, have the affirmative obligation to
prevent the broadcast of false, misleading or deceptive contest
announcements, and to conduct their contests substantially as
announced. A broadcast announcement concerning a contest is false,
misleading, or deceptive "if the net impression of the announcement
has a tendency to mislead the public." In enforcing this rule, the
Bureau has repeatedly held that licensees are responsible for
broadcasting accurate statements as to the nature and value of contest
prizes, and will be held accountable for any announcement that tends
to mislead the public.
9. As an initial matter, we reject Good Karma's characterization of "Who
Said That?" as a program feature or "bit," as opposed to a contest
subject to the Commission's rules. We find that "Who Said That?" is a
contest under Section 73.1216 because it was a licensee-conducted
scheme in which prizes were offered, based upon knowledge of the
identity of the speaker in the clip, to members of the public. We
further hold that Good Karma failed to fully and accurately disclose
all material terms of the Contest. In particular, the Licensee
apparently failed to periodically make on-air announcements of the
Contest's material terms throughout the course of the Contest, as
required. The Licensee admitted that for over a year during the course
of the Contest (from the summer of 2008 until September 4, 2009), the
Station stopped announcing prizes, unless a listener called in and
tried to guess the identity of the voice in the last clip. In
addition, the Station apparently failed to announce on-air certain
material terms throughout the course of the Contest - namely, the
extent, nature, and value of the prizes. In this regard, the Station
failed to specify on-air the list of accumulated prizes during each
program and that some alternate prizes the Station deemed of equal
value would be substituted for previously announced prizes.
10. The Licensee notes its disclosure of general contest rules on the
Station's website, which include a provision allowing the subject
stations to substitute a prize of equal or greater value for all
contests and giveaways and to end or stop any contest at any time. We
reject any suggestion that such non-broadcast disclosure may act as a
substitute for broadcast announcements. Although non-broadcast
disclosures can supplement broadcast announcements, it is
well-established that they cannot act as a substitute for the
broadcast of material terms of a contest. Accordingly, the fact that
certain terms of the Contest were posted on the Station's website does
not excuse the Licensee from liability.
11. The Licensee also asserts that the nature of certain prizes implied
that they would no longer be available, thereby relieving the Station
of the requirement to provide clarifying information. We disagree. The
nature, extent, and value of the prizes, substituted or otherwise,
could not be self-evident to listeners absent a full announcement, and
they were not evident to the Complainant. Furthermore, licensees have
the affirmative obligation to prevent misleading announcements
respecting the contests that they conduct. They cannot rely on
implications to accomplish that result. We therefore find that Good
Karma violated Section 73.1216 of the Commission's rules by failing to
fully and accurately disclose the material terms of the Contest.
12. Pursuant to the Commission's Forfeiture Policy Statement and Section
1.80 of the rules, the base forfeiture for violations of the contest
rules is $4,000. 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, which include the nature, circumstances,
extent, and gravity of the violations, and with respect to the
violator, the degree of culpability, any history or prior offenses,
ability to pay, and other such matters as justice may require.
Applying the Forfeiture Policy Statement, Section 1.80, and the
statutory factors to the instant case, we conclude that Good Karma
willfully and repeatedly violated Section 73.1216 of the Commission's
rules and is apparently liable for a forfeiture in the amount of
$4,000.
IV. ORDERING CLAUSES
13. Accordingly, IT IS ORDERED, pursuant to Section 503(b) of the Act, and
Sections 0.111, 0.311, and 1.80(f)(4) of the Commission's rules, that
Good Karma Broadcasting, LLC is hereby NOTIFIED of its APPARENT
LIABILITY FOR FORFEITURE in the amount of $4,000 for apparently
willfully and repeatedly violating Section 73.1216 of the Commission's
rules.
14. 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, Good
Karma Broadcasting, LLC SHALL PAY the full amount of the proposed
forfeiture or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
15. 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. Good Karma Broadcasting, LLC will also
send electronic notification on the date said payment is made to
Hillary.DeNigro@fcc.gov, Ben.Bartolome@fcc.gov, Anjali.Singh@fcc.gov,
and Melissa.Marshall@fcc.gov.
16. The response, if any, must be mailed to Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, SW, Room 4-C330,
Washington, D.C. 20554, and must include the NAL/Account Number
referenced above. In addition, a copy of the response must be
transmitted via e-mail to Hillary.DeNigro@fcc.gov,
Ben.Bartolome@fcc.gov, Anjali.Singh@fcc.gov, and
Melissa.Marshall@fcc.gov.
17. 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.
18. Accordingly, IT IS FURTHER ORDERED, that the Complaint in this
proceeding IS GRANTED to the extent indicated herein and IS OTHERWISE
DENIED, and the instant complaint proceeding IS HEREBY TERMINATED.
19. IT IS FURTHER ORDERED that a copy of this NAL shall be sent, by First
Class Mail and Certified Mail - Return Receipt Requested, to Good
Karma Broadcasting, LLC, 100 Stoddart Street, P.O. Box 902, Beaver
Dam, Wisconsin 53916 and to its counsel, Nancy A. Ory, Esquire, Lerman
Senter PLLC, 2000 K Street, N.W., Suite 600, Washington, DC 20006, and
by First Class mail to the Complainant.
FEDERAL COMMUNICATIONS COMMISSION
Hillary S. DeNigro
Chief, Investigations and Hearings Division
Enforcement Bureau
See 47 C.F.R. S: 73.1216.
See Form 2000E Complaint, filed on February 13, 2009.
Id.
See Letter from Rebecca A. Hirselj, Assistant Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications Commission,
to Good Karma Broadcasting, LLC, dated June 19, 2009; Letter from Rebecca
A. Hirselj, Assistant Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, to Good Karma
Broadcasting, LLC, dated August 26, 2009.
See Letter from Nancy A. Ory, Lerman Senter PLLC, Counsel for Good Karma
Broadcasting, LLC, to Marlene H. Dortch, Secretary, Federal Communications
Commission, at 2, 4, 5, dated September 11, 2009 ("Second LOI Response").
Good Karma states that while it views "Who Said That?" more as a program
feature than a traditional radio contest, it nevertheless complied with
the requirements of Section 73.1216 by disclosing material terms of the
"contest" on air and by awarding prizes in accordance with such material
terms. See Letter from Nancy A. Ory, Lerman Senter PLLC, Counsel for Good
Karma Broadcasting, LLC, to Marlene H. Dortch, Secretary, Federal
Communications Commission, at 6, dated July 20, 2009 ("First LOI
Response").
See First LOI Response at 2; Second LOI Response at 2. We note that the
Licensee refers to the Contest throughout its pleadings in this case as a
"scheme" or a "bit." See, e.g., First LOI Response at 3.
See First LOI Response at 2.
See id. at 2-3.
See id. at 3.
Id. at 3-4.
See id. at 3.
See id.
See id. at 2; Second LOI Response at 5.
See First LOI Response at 3.
See Second LOI Response at 2, 3.
Id. at 2. Good Karma notes that, "[f]or example, if the new prize was a
t-shirt or coffee mug, it would generally be disclosed that week, but
would not be repeated on air each following week." Id.
See id. at 4.
See id. at 3.
See id.
See 47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 312(f)(1).
See H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and
Order, 6 FCC Rcd 4387, 4388 (1991), recons. denied, 7 FCC Rcd 3454 (1992).
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362 P: 10
(2001) (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).
47 C.F.R. S: 73.1216.
Id., Note 1(b).
Id. (emphasis added).
Id., Note 2.
See id. ("material terms should be disclosed periodically by announcements
broadcast on the station conducting the contest") (emphasis added).
Posting contest rules on a station's website does not satisfy Section
73.1216's requirement that a licensee broadcast the material terms of a
contest it conducts. See, e.g., AK Media Group, Notice of Apparent
Liability for Forfeiture, 15 FCC Rcd 7541, 7543 P: 7 (Enf. Bur. 2000)
(forfeiture paid) ("AK Media NAL"); Service Broadcasting Group, LLC,
Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 8494, 8498 (Enf.
Bur., Investigations & Hearings Div. 2009) (forfeiture paid) ("Service
NAL").
See WMJX, Inc., Decision, 85 FCC 2d 251, 269 (1981) (holding that proof of
actual deception is not necessary to find violations of contest rules, and
that the licensee, as a public trustee, has an affirmative obligation to
prevent the broadcast of false, misleading or deceptive contest
announcements); Amendment of Part 73 of the Commission's Rules Relating to
Licensee-Conducted Contests, Report and Order, 60 FCC 2d 1072 (1976).
See Headliner Radio, Inc., Memorandum Opinion and Order, 8 FCC Rcd 2962
(Mass Media Bur. 1993) (finding that the airing of a misleading
advertisement concerning a licensee's contest violated the Commission's
contest rules because the contest was not then conducted "substantially as
announced or advertised").
WMJX Inc., 85 FCC 2d at 269-270, n.82 (citing Eastern Broadcasting Corp.,
Decision, 14 FCC 2d 228, 229 (1968)).
See, e.g., Clear Channel Broadcasting Licenses, Inc., Notice of Apparent
Liability for Forfeiture, 21 FCC Rcd 6808, 6809 (Enf. Bur., Investigations
& Hearings Div. 2006) (forfeiture paid); Citicasters Co., Notice of
Apparent Liability for Forfeiture, 15 FCC Rcd 16612, 16613-14 (Enf. Bur.
2000) (forfeiture paid) ("Citicasters NAL"); Clear Channel Broadcasting
Licenses, Inc., Notice of Apparent Liability for Forfeiture, 15 FCC Rcd
2734, 2735 (Enf. Bur. 2000) (forfeiture paid) ("Clear Channel NAL").
See 47 C.F.R. S: 73.1216, Note 1(a); First LOI Response at 2, 3.
See 47 C.F.R. S: 73.1216.
See id., Note 2.
See Second LOI Response at 4-5.
See 47 C.F.R. S: 73.1216, Note 1(b); Clear Channel NAL, 15 FCC Rcd at
2735 (finding that failure to disclose the nature and value of the prize
is a clear violation of Section 73.1216); Second LOI Response at 2-3.
See Second LOI Response at 2-3.
See id. at 3, 5.
See id.
See AK Media NAL, 15 FCC Rcd at 7543 (finding contest rule violation for
station's failure to broadcast a contest's material term and holding that
posting rules at the station and on its website do not satisfy rule);
Clear Channel NAL, 15 FCC Rcd at 2735 (finding contest rule violation for
failure to broadcast a contest's material term and holding that posting
rules at the station's website does not suffice to satisfy rule); Service
NAL, 24 FCC Rcd at 8499 (finding that off-air contest instructions do not
excuse a licensee from liability). See also 47 C.F.R. S: 73.1216, Note 2
(stating "[t]he material terms should be disclosed periodically by
announcements broadcast on the station conducting the contest") (emphasis
added).
See Second LOI Response at 3. For example, the Licensee cites tickets to a
sporting event, which would be worthless after the date of the event. See
id.
See authorities cited in supra note 33.
See 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"); 47 C.F.R. S: 1.80.
See 47 U.S.C. S: 503(b)(2)(E).
See Citicasters NAL, 15 FCC Rcd at 16613-14 (assessing $4,000 forfeiture
for failure to announce a contest's material term); Capstar TX Limited
Partnership, Notice of Apparent Liability for Forfeiture, 20 FCC Rcd
10636, 10641 (Enf. Bur., Investigations & Hearings Div. 2005) (assessing
$4,000 forfeiture for failure to announce a contest's material term and
for neglecting to conduct the contest as announced) (forfeiture paid).
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 C.F.R. S: 73.1216.
See 47 C.F.R. S: 1.1914.
For the purposes of the forfeiture proceeding initiated by this NAL, Good
Karma Broadcasting, LLC shall be the only party to this proceeding.
Federal Communications Commission DA 10-2319
2
2
Federal Communications Commission DA 10-2319
.