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Before the
Federal Communications Commission
Washington, DC 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
)
FORFEITURE ORDER
Adopted: September 7, 2012 Released: September 7, 2012
By the Chief, Investigations and Hearings Division, Enforcement Bureau:
I. INTRODUCTION
1. In this Forfeiture Order (Forfeiture Order), we assess a monetary
forfeiture in the amount of four thousand dollars ($4,000) against
Good Karma Broadcasting, LLC (Good Karma or Licensee), licensee of
Station WKNR(AM), Cleveland, Ohio (Station), for willfully and
repeatedly violating Section 73.1216 of the Commission's rules by
broadcasting information about a contest without fully and accurately
disclosing all of its material terms.
I. background
2. As discussed in detail in the Notice of Apparent Liability for
Forfeiture (NAL) issued in this case, the Enforcement Bureau (Bureau)
received a complaint alleging that, from approximately November 2007
until September 2009, the Station conducted a "bogus" contest called
"Who Said That?" (Contest) during the "Really Big Show," which, during
the time period at issue, aired weekdays from 10:00 a.m. to noon. In
particular, the complainant alleged that the Station "dropped talking
about prizes" during the course of the Contest. On June 19, 2009 and
August 26, 2009, the Bureau sent letters of inquiry (LOIs) to the
Licensee regarding the contests. In response to those LOIs, Good Karma
admitted that on a regular basis during early 2007 through the summer
of 2008, and then sporadically thereafter until September 4, 2009, the
Station aired a "bit," or program feature, called "Who Said That?"
during "The Really Big Show with Tony Rizzo." Good Karma stated 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. The Station would award prizes to listeners who correctly
identified the speaker. Once a listener called in and successfully
identified the speaker, the Station would select a new audio clip for
listeners to identify and the Contest continued with the new clip.
3. This practice continued regularly until the Station aired the last
clip in the fall of 2007. Good Karma noted that no one correctly
identified the speaker of the clip for more than twenty months. The
Licensee explained that from the fall of 2007 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 admitted, however, that the Station
did not announce the entire list of accumulated prizes, and was
instead "identify[ing] the new prize and emphasiz[ing] material prizes
in the package." 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.
According to Good Karma, by September 2009, some originally-identified
prizes were no longer available. Although the Station did not announce
any change in the prizes, Good Karma claimed that if a listener had
correctly identified the speaker in the last clip, the Station would
have offered a similar package of prizes to what was originally
announced. In view of the record evidence, the NAL proposed a
forfeiture in the amount of four thousand dollars ($4,000) against
Good Karma.
4. In its response to the NAL, Good Karma disputes that it committed a
violation of our contest rule. Good Karma asserts that "Who Said
That?" is more properly characterized as a program feature or "bit"
rather than a traditional radio contest and therefore is not subject
to our contest rule. Good Karma further contends that, even assuming
that its programming constitutes a contest, it was "generally and
substantially conducted in material compliance" with Section 73.1216
and therefore the Bureau should rescind the forfeiture. In support of
its argument, Good Karma submits that: (1) the Station was, at most,
required to broadcast a "reasonable number" of prize list
announcements "periodically," which Good Karma asserts that it did;
and (2) Good Karma complied with the spirit of Section 73.1216 with
respect to prize disclosure. Good Karma also asserts that the NAL
improperly cites Clear Channel Broadcasting Licenses, Inc. (Clear
Channel NAL). Moreover, Good Karma suggests that, to the extent the
Bureau rejects Good Karma's argument that its actions at most
constitute technical violations of Section 73.1216, no action beyond
an admonition is appropriate. We reject these arguments as discussed
below.
III. DISCUSSION
5. The proposed forfeiture amount in this case was assessed in accordance
with Section 503(b) of the Communications Act of 1934, as amended
(Act), Section 1.80 of the Commission's rules, and the Commission's
forfeiture guidelines set forth in its Forfeiture Policy Statement. In
assessing forfeitures, Section 503(b) of the Act requires that we take
into account 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
matters as justice may require. As discussed further below, we have
examined Good Karma's response to the NAL pursuant to the
aforementioned statutory factors, our rules, and the Forfeiture Policy
Statement, and we find no basis for cancellation or reduction of the
forfeiture. We therefore affirm the forfeiture in the amount of four
thousand dollars ($4,000).
6. 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 a licensee has 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.
A. Good Karma Conducted a Contest.
7. We find that the actions at issue here constitute a contest under the
Commission's contest rule and therefore are subject to Section
73.1216. Good Karma asserts that "Who Said That?" is more properly
characterized as a program feature or "bit" rather than a traditional
contest, thereby exempting it from the requirements of Section 73.1216
of the Commission's rules. We disagree. Section 73.1216, Note 1(a),
defines a contest as "a scheme in which a prize is offered or awarded,
based upon chance, diligence, knowledge or skill, to members of the
public." As we explained in the NAL, because the Station offered or
awarded various prizes to members of the public, its listeners, based
upon the listeners' knowledge of sports trivia, the material at issue
clearly satisfies this definition. Accordingly, Section 73.1216
applies here.
B. Good Karma's Contest Violated Section 73.1216.
8. We uphold our earlier finding that Good Karma's Contest violated
Section 73.1216. Good Karma argues that even if "Who Said That?" was a
contest, the Contest was "generally and substantially conducted in
material compliance" with Section 73.1216 for two overarching reasons.
First, Good Karma asserts that the Station was, at most, required to
broadcast a "reasonable number" of prize list announcements
"periodically," which Good Karma asserts that it did. Second, Good
Karma asserts that it complied with the spirit of Section 73.1216 with
respect to prize disclosure. We address each of these assertions in
turn below.
1. Good Karma Failed to Announce the Contest's Material Terms with
Sufficient Frequency.
9. In its NAL Response, Good Karma correctly notes that the Commission's
rules required the Station to broadcast a "reasonable number" of
announcements "periodically." Based on the record, however, we found
in the NAL that Good Karma failed to meet this requirement with
respect to the list of prizes offered in the Contest because we
concluded that the frequency of announcements in this case was
insufficient to meet the announcement requirement. As explained in the
NAL, the record reflects that the frequency of the announcements
decreased over the course of the Contest, to the point that the
Licensee did not announce the Contest terms unless prompted by a
listener to do so. As described in the NAL, the Licensee admitted that
for over a year during the Contest, the Station stopped announcing
prizes unless a listener called in and tried to guess the identity of
the voice in the last clip. Good Karma does not dispute these facts,
and given that admission, we conclude that the material terms,
including the prizes offered, were not "periodically" broadcast
throughout the course of the Contest.
2. Good Karma Failed to Fully and Accurately Announce the Contest Prizes.
10. We also uphold our earlier finding that Good Karma failed to comply
with Section 73.1216's requirements concerning prize disclosure. In
particular, we noted that Good Karma failed to announce on-air the
list of accumulated prizes and failed to announce the fact that the
announced prizes were subject to substitution. After reviewing Good
Karma's NAL Response, we reject Good Karma's claims that: (a) Section
73.1216 does not require it to broadcast a list of accumulated prizes;
and (b) Section 73.1216 does not require it to broadcast the fact that
prizes of equal value might be substituted for certain previously
announced prizes.
11. As noted above, Section 73.1216 requires that licensees conducting
contests "shall fully and accurately disclose the material terms of
the contest." Note 1(b) of Section 73.1216 clearly states that "the
extent, nature and value of prizes" is a material term. Nothing in
Section 73.1216 indicates that prizes of low value are excluded from
this requirement. Thus, we reject Good Karma's assertion that it is
within the licensee's discretion to determine that certain prizes are
"not as worthy of discussion." Good Karma correctly notes that nothing
prohibits a station from awarding more prizes than announced.
Listeners, however, may not know if the station actually awarded fewer
than previously announced prizes unless the station periodically
announces complete prize lists. Moreover, without such periodic
announcements, listeners cannot know whether previously announced
prizes remain part of the total package of prizes. Failing to
periodically announce the full extent of the prizes, as Good Karma did
in this case, violates Section 73.1216.
12. We also reject Good Karma's assertion that Section 73.1216 did not
require it to broadcast an announcement that prizes of equal value
might be substituted for certain previously announced prizes when Good
Karma, in fact, made such substitutions and, by its own admission,
anticipated that it might do so. As discussed above, it is beyond
dispute that "the extent, nature and value of prizes" is a material
term that must be disclosed. By announcing one prize and awarding
another without any broadcast notice that such a substitution might
occur, Good Karma failed to adequately announce the nature of the
prize and failed to conduct the contest as announced.
13. Good Karma further asserts that the general contest rules posted on
the Station's website state that, "Stations reserve the right to
substitute a prize of equal or greater value for all contests and
giveaways." The Station acknowledges, however, that a comparable
disclosure was never broadcast on the Station. As noted above, online
disclosure of contest terms does not substitute for broadcast
announcements of such terms.
14. Good Karma claims that the substitutable nature of the Contest's
prizes was self-evident to listeners, including to the complainant. In
particular, Good Karma explains that some prizes announced during "Who
Said That?" (such as tickets to sporting events set on precise dates)
had definitive "expiration dates" after which they would be of no
value. Good Karma states that it intended to award prizes-or their
equivalent-that had already been announced. Listeners, however, could
not be expected to know the Licensee's intentions without notice from
the Licensee. The burden is not on the listener to surmise the nature
of the prizes, but rather on the licensee to announce it.
C. Imposition of a Forfeiture is the Appropriate Sanction for Good Karma's
Rule Violation.
15. We continue to assess a forfeiture in this case. Good Karma contends
that the NAL's proposed forfeiture is overly harsh and no action
beyond admonition is appropriate here. In urging a more restrained
approach for a Section 73.1216 violation, Good Karma argues that
Section 73.1216 constitutes "government regulation of program content"
and, therefore, the Commission should exercise "restrained agency
enforcement" relating to that regulation, consistent with the
Commission's approach to the regulation of program content. In
support, Good Karma relies on two cases involving the regulation of
indecent speech, not the Commission's contest rule. These cases
provide no relevant guidance about the contest case at issue, which
has nothing to do with regulating indecency and the sensitive First
Amendment implications that such regulation entails. Indeed, the
Commission has stated that the contest rule, unlike matters involving
indecency, is content neutral and "does not implicate the First
Amendment."
16. Pursuant to the Commission's Forfeiture Policy Statement and Section
1.80 of the Commission's rules, the base forfeiture for violations of
the contest rules is four thousand dollars ($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
of prior offenses, ability to pay, and other such matters as justice
may require. Accordingly, as a result of our reviewing Good Karma's
response to the NAL, we affirm the NAL and impose a forfeiture in the
amount of four thousand dollars ($4,000).
IV. ORDERING CLAUSES
17. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
Act and Section 1.80 of the Commission's rules, and authority
delegated by Sections 0.111 and 0.311 of the Commission's rules, Good
Karma Broadcasting, LLC, IS LIABLE FOR A MONETARY FORFEITURE in the
amount of four thousand dollars ($4,000) for willfully and repeatedly
violating Section 73.1216 of the Commission's rules.
18. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Commission's rules by the close of business on or
before September 21, 2012. If the forfeiture is not paid within the
period specified, the case may be referred to the U.S. Department of
Justice for enforcement of the forfeiture pursuant to Section 504(a)
of the Act. Good Karma Broadcasting, LLC shall send electronic
notification of payment to Jeffrey Gee, Anjali Singh, and Melissa
Marshall at Jeffrey.Gee@fcc.gov, Anjali.Singh@fcc.gov, and
Melissa.Marshall@fcc.gov on the date said payment is made.
19. The payment must be made by check or similar instrument, wire
transfer, or credit card, and must include the NAL/Account number and
FRN referenced above. Regardless of the form of payment, a completed
FCC Form 159 (Remittance Advice) must be submitted. When completing
the FCC Form 159, enter the Account Number in block number 23A (call
sign/other ID) and enter the letters "FORF" in block number 24A
(payment type code). Below are additional instructions you should
follow based on the form of payment you select:
* Payment by check or money order must be made payable to the order of
the Federal Communications Commission. Such payments (along with the
completed Form 159) must be mailed to Federal Communications
Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent
via overnight mail to U.S. Bank - Government Lockbox #979088,
SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* Payment by wire transfer must be made to ABA Number 021030004,
receiving bank TREAS/NYC, and Account Number 27000001. To complete
the wire transfer and ensure appropriate crediting of the wired funds,
a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on
the same business day the wire transfer is initiated.
* Payment by credit card must be made by providing the required credit
card information on FCC Form 159 and signing and dating the Form 159
to authorize the credit card payment. The completed Form 159 must then
be mailed to Federal Communications Commission, P.O. Box 979088, St.
Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank -
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
Louis, MO 63101.
20. Any request for full payment 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. If you have questions regarding payment
procedures, please contact the Financial Operations Group Help Desk by
phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
21. IT IS FURTHER ORDERED that a copy of this Forfeiture Order shall be
sent, by 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, Dennis P. Corbett, Esquire, Nancy
A. Ory, Esquire, and F. Scott Pippin, Esquire, Lerman Senter PLLC,
2000 K Street, N.W., Suite 600, Washington, D.C. 20006.
FEDERAL COMMUNICATIONS COMMISSION
Theresa Z. Cavanaugh
Chief, Investigations and Hearings Division
Enforcement Bureau
47 C.F.R. S: 73.1216.
See Good Karma Broadcasting, LLC, Notice of Apparent Liability for
Forfeiture, 25 FCC Rcd 17087 (Enf. Bur. 2010) (NAL).
See Complaint, Form 2000E Complaint No. 09-C00093667-1 (Feb. 13, 2009) (on
file in EB-09-IH-0756) at 1-2 (Complaint).
Id. at 2.
See Letter from Rebecca A. Hirselj, Assistant Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications Commission,
to Good Karma Broadcasting, LLC (June 19, 2009) (on file in
EB-09-IH-0756); Letter from Rebecca A. Hirselj, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, to Good Karma Broadcasting, LLC (Aug. 26, 2009)
(on file in EB-09-IH-0756).
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 (July 20, 2009) (on file in EB-09-IH-0756) (First LOI
Response); Letter from Nancy A. Ory, Lerman Senter PLLC, Counsel for Good
Karma Broadcasting, LLC, to Marlene H. Dortch, Secretary, Federal
Communications Commission, at 2 (Sept. 11, 2009) (on file in
EB-09-IH-0756) (Second LOI Response).
See First LOI Response at 2.
See id. at 2-3.
See id. at 3.
See id.
See Second LOI Response at 2-3.
Id. at 2.
See id. at 4-5.
See id. at 3.
See id.
See NAL, 25 FCC Rcd at 17092, para. 12.
See Response to Notice of Apparent Liability for Forfeiture of Good Karma
Broadcasting, LLC (Jan. 7, 2011) (on file in EB-09-IH-0756) (NAL
Response).
Id. at 2.
Id. at 2, 3.
Id. at 4, 7.
See id. at 4-6.
See id. at 3 n.3 (citing Clear Channel Broadcasting Licenses, Inc., Notice
of Apparent Liability for Forfeiture, 15 FCC Rcd 2734, 2735 (Enf. Bur.
2000) (Clear Channel NAL)).
See NAL Response at 7-8 (citing Entercom Buffalo License, LLC, Order, 17
FCC Rcd 11997, 11998 (Enf. Bur. 2002) (stating, as quoted for support in
the NAL Response, that "the First Amendment is a critical constitutional
limitation that demands we proceed cautiously and with appropriate
restraint"); Action for Children's Television v. FCC, 852 F.2d 1332, 1344
(D.C. Cir. 1988)).
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
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 (1997), recons. denied, 15 FCC Rcd 303 (1999) (Forfeiture
Policy Statement).
47 U.S.C. S: 503(b)(2)(E).
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"). 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 (Enf. Bur. 2000) (forfeiture paid); Service Broadcasting
Group, LLC, Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 8494,
8498-99 (Enf. Bur. 2009) (forfeiture paid).
See NAL Response at 2.
47 C.F.R. S: 73.1216, Note 1(a).
Good Karma has acknowledged certain elements of the contest rule
requirements, namely that it awarded prizes based on listeners' knowledge
of who was speaking in the audio recording, and that these listeners were
members of the public. See First LOI Response at 2, 3; see also NAL, 25
FCC Rcd at 17090.
NAL Response at 2. Good Karma also argues that, at the time of its NAL
Response, the Third Circuit Court of Appeals was exploring the issue of
scienter with respect to the willfulness factor in FCC forfeiture cases.
See NAL Response at 2 n.2. To the extent the Third Circuit has since
resolved the case in question and specifically declined to adopt findings
related to the issue of scienter, that issue now appears moot. See CBS
Corp. v. FCC, 663 F.3d 122 (3d Cir. 2011), petition for rehearing en banc
denied, No. 06-3575 (3d Cir. Jan. 18, 2012), petition for cert. denied,
No. 11-1240, 2012 WL 2470244 (U.S. Jun. 29, 2012).
NAL Response at 4, 7.
See id. at 4-6.
See id. at 4 (citing 47 C.F.R. S: 73.1216, Note 2).
See NAL, 25 FCC Rcd at 17090-91, para. 9.
See id.
See id. (citing Second LOI Response at 4-5).
See id. (citing Second LOI Response at 2-3).
See NAL Response at 4-5.
47 C.F.R. S: 73.1216.
Id., Note 1(b).
NAL Response at 5. Even contests with comparatively low value prizes
remain subject to Section 73.1216. See, e.g., AMFM Broadcasting Licenses,
LLC, Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 1529 (Enf.
Bur. 2009) (forfeiture paid) (theater tickets); ABC, Inc., Notice of
Apparent Liability for Forfeiture, 18 FCC Rcd 25647 (Enf. Bur. 2003)
(forfeiture paid) (movie passes).
See NAL Response at 5 n.7.
See Complaint at 2 (noting that the Station has "dropped talking about
prizes").
See NAL Response at 5; First LOI Response at 3; Second LOI Response at 3.
47 C.F.R. S: 73.1216, Note 1(b).
Second LOI Response at 3.
See id.
See supra note 32.
See NAL Response at 5-6.
Id.
See Second LOI Response at 3.
See, e.g., WMJX, Inc., Decision, 85 FCC 2d 251, 269 (1981) (subsequent
history omitted) (WMJX, Inc.) (holding, in part, that the licensee, as a
public trustee, has an affirmative obligation to prevent the broadcast of
false, misleading or deceptive contest announcements).
See NAL Response at 2, 7. Good Karma also claims that the Clear Channel
NAL was not pertinent to the facts at issue in this case. See NAL Response
at 3 n.3. However, the purpose for citing the Clear Channel NAL was to
demonstrate that the Bureau repeatedly has held that licensees are
responsible for broadcasting accurate statements as to the nature and
value of contest prizes. In the Clear Channel NAL, the Bureau stated that
licensees "will be held accountable for any announcement which tends to
mislead the public." Clear Channel NAL, 15 FCC Rcd at 2735 (emphasis
added) (citing WMJX, Inc., 85 FCC 2d at 272). Thus, citation to the Clear
Channel NAL was appropriate.
NAL Response at 7 n.11.
See id. (citing Entercom Buffalo License, LLC, Order, 17 FCC Rcd 11997,
11998 (Enf. Bur. 2002) (stating, as quoted for support in the NAL
Response, that "the First Amendment is a critical constitutional
limitation that demands we proceed cautiously and with appropriate
restraint"); Action for Children's Television v. FCC, 852 F.2d 1332, 1344
(D.C. Cir. 1988) (subsequent history omitted)).
CBS Radio Inc. of Philadelphia, Memorandum Opinion and Order, 24 FCC Rcd
10993, 10996 (Enf. Bur. 2009) (subsequent history omitted).
See supra note 26; 47 C.F.R. S: 1.80.
47 U.S.C. S: 503(b)(2)(E).
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80.
47 C.F.R. S:S: 0.111, 0.311.
47 C.F.R. S: 1.80.
47 U.S.C. S: 504(a).
An FCC Form 159 and detailed instructions for completing the form may be
obtained at http://www.fcc.gov/Forms/Form159/159.pdf.
See 47 C.F.R. S: 1.1914.
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Federal Communications Commission DA 12-1459
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Federal Communications Commission DA 12-1459