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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of )
Clear Channel Communications, Inc. )
Ultimate Parent Company of ) File No.: EB-08-IH-1738
AMFM Broadcasting Licenses, LLC ) NAL/Acct. No.: 201232080015
Licensee of Stations KOST(FM), ) FRN: 0005780325
KHHT(FM),
) Facility ID Nos. 34424,
KBIG-FM, and KYSR(FM), all of Los 35022,
Angeles, California; )
6360, and 36019
Citicasters Licenses, Inc. )
Facility ID No. 19218
Licensee of Station KIIS-FM, Los )
Angeles, California; Facility ID No. 34425
)
Capstar TX LLC
)
Licensee of Station KFI(AM), Los
Angeles, 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"),
apparently willfully violated section 73.1216 of the Commission's
rules by failing to "fully and accurately disclose the material terms
of a contest." 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).
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.
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. 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.
3. In response to the Complaint, the Enforcement Bureau ("Bureau"), by
letter dated September 23, 2008, inquired of Clear Channel concerning
these allegations. Clear Channel responded on October 30, 2008. The
Bureau sent a further letter of inquiry to Clear Channel on November
25, 2009, to which it responded on December 17, 2009. 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. In addition, Clear
Channel states that no videos were submitted after the Contest
submission deadline. Finally, throughout its LOI Response, Clear
Channel claims that the Contest was conducted entirely online.
I. 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 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 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." Material terms, among other things, include any eligibility
restrictions, means of selection of winners, and the extent, nature
and value of prizes.
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." It acknowledges, however, that the Stations broadcast
advertisements for the Contest. Clear Channel further acknowledges
that its Contest rules were not broadcast, but instead were made
available via the Stations' websites. 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.
Thus, Clear Channel's broadcast promotion of the Contest renders it
fully subject to the Commission's rule. 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. The Commission's rules
clearly provide that "[t]he material terms should be disclosed
periodically by announcements broadcast on the station conducting the
contest." 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. 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. 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.
Further, paragraph seven of the Official Contest Rules stipulates that
"[a]ll [s]ubmissions . . . must be received by the close of the
Contest Period." 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 [f]inalists" during the period from March 12 to March 21, 2008.
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, we are persuaded that there were no violations of the
pertinent statute, 47 U.S.C. S: 509. Clear Channel submitted evidence
that credibly refutes these allegations. 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. 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. 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, 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. We believe that the substantial revenues of Clear Channel and
its previous violations of Commission rules 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). 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.
II. ORDERING CLAUSES
10. ACCORDINGLY, IT IS ORDERED, pursuant to section 503(b) of the Act, and
sections 0.111, 0.311, and 1.80 of the Commission's rules, 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 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.
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
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.
47 C.F.R. S: 73.1216.
See complaint dated July 25, 2008, IC Number 08-R1037916 ("Complaint").
See id.
See id.
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").
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. S: 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. S:
0.459(d)(1).
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").
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").
See LOI Response at 11, 14-15.
See id. at 11.
See id. at 2-6.
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).
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).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, para. 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, para. 9.
See 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, para. 4 (2002) (forfeiture paid).
See 47 C.F.R. S: 73.1216.
See id., nn. 1(b)-2.
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).
See id. at 6.
See id.
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").
See 47 C.F.R. S: 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.
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).
See 47 C.F.R. S: 73.1216 n.2 (emphasis added).
See id.
See LOI Response & Exhibit E ("Official Contest Rules").
See LOI Response & Exhibit E at 1.
See LOI Response & Exhibit E at 3.
See id. Further compounding this confusion is the fact that "Contest
deadline" is not defined in the Official Contest Rules.
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.
47 U.S.C. S: 509 (Prohibited Practices in Case of Contests of Intellectual
Knowledge, Intellectual Skill, or Chance).
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.
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 P: 193 (1998) (citing 47 C.F.R. S: 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).
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. S: 1.80(b).
See 47 U.S.C. S: 503(b)(2)(E); 47 C.F.R S: 1.80(b)(4).
See id.
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 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.
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).
See id. As noted above, Clear Channel has violated our contest rule
multiple times.
See 47 U.S.C. S: 503(b).
See 47 C.F.R. S:S: 0.111, 0.311, and 1.80.
For purposes of the forfeiture proceeding initiated by this NAL, Clear
Channel Communications, Inc. shall be the only party to this proceeding.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 12-64
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Federal Communications Commission DA 12-64