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URL 27: The FCC Fines Channel 8 a Measly $4,000 for Clipping (July 26, 1972)

URL 27: The FCC Fines Channel 8 a Measly $4,000 for Clipping (July 26, 1972) (In Chapter 35, page 164) (1,623 words) (28,471 cum words)

The FCC Fines Channel 8 a Measly $4,000 for Clipping, July 26, 1972

To Hughes Tool Company, 25th floor, Humble Building, Houston, Texas

This letter constitutes a Notice of Apparent Liability for forfeiture pursuant to Section 503(b)(2) of the Communications Act of 1934, as amended.

An inquiry by the Commission into the operations of KLAS-TV, Las Vegas, Nevada, has revealed apparent violations of Section 73.1205 of the Commission’s Rules as set forth below.

It appears that KLAS sent invoices to Wells-Rich-Greene, 767 Fifth Avenue, New York, NY, warranting that the actual broadcast information shown thereon was taken from program logs whereas in fact in some instances the times shown on the invoices differed from the actual times of broadcast as shown on the logs. The times of broadcasts stated on the invoices covering announcements for Midas Mufflers are set forth below, together with the actual times of broadcasts as shown on KLAS program logs.

The invoice for broadcasts during June and July 1971:

Date of broad- cast Time shown

on invoice

Amount billed Time of broadcast as shown on logs
6-28. Monday 11:29 pm 0
7-1. Thursday 8:59 pm $70 11:01:20 pm
7-3. Saturday 10:29 pm $61 11:01:42 pm
7-6 Tuesday 11:16 pm 0 11:23 pm
7-8 Thursday 8:59 pm $70 8:45:10 pm
7-10 Saturday 10:29 pm $61 Between 6:30-7 pm
7-12 Monday 11:16 pm 0 11:00-11:15 pm
7-15 Thursday 8:59 pm $70 8:55:20 pm
7-17 Saturday 1:29 pm* $61 6:59:30 pm
7-20 Tuesday 11:16 pm 0 6:59:30 pm
7-22 Thursday 8:59 pm $70 8:52:30 pm
7-24 Saturday 10:29 pm $61 6:30-6:57:20 pm

*The invoice apparently intended to specify 10:29 pm rather than 1:29 pm

Thus, of the eight announcements for which charges were made, in five instances the time of actual broadcast varied from one half hour to three and one-half hours from the time shown on the invoice. The contract covering the above spots with Edward Petry and Company, station representative for KLAS, specified that the spots on Thursday were to be broadcast at 9:00 pm, at a rate of $70 each; the spots on Saturday were to be broadcast at 10:30 pm at $61, and one additional spot per week was to be broadcast at no charge between 11:00 and 11:30 pm (Class B Time) on a night other than Saturday or Sunday. Although no additional charge was to be made for this spot, it was a part of the sales agreement and, as a “bonus” spot, must be considered as a part of the station’s contractual obligations. According to the station’s S-10 rate card specified in the contract, the station’s Class AA time was 7:30 pm to 10:30 pm. The station’s Class A time was 5:30-7:30 pm and 10:30-11:00 pm. The invoice represents that the two paid spots weekly were in the Class AA time, whereas in fact five of these announcements were broadcast in Class A time.

The station invoice for the months of July and August 1971 issued to Wells-Rich-Greene for advertising Midas Mufflers lists ten 30-second announcements as follows: (Bonus announcements omitted)

Date of broad- cast Time shown

on invoice

Amount billed Time of broadcast as shown on logs
7-29 8:59 pm $70 8:53:43 pm
7-31 10:29 pm $61 7:29:20 pm
8-5 8:59 pm $70 8:52:50 pm
8-7 10:29 pm $61 10:28 pm
8-12 8:59 pm $70 8:54:05 pm
8-14 10:29 pm $61 6:37 pm
8-19 8:59 pm $70 8:54:50 pm
8-21 10:29 pm $61 11:01 pm
8-26 8:59 pm $70 8:55:10 pm
8-18* 10:29 pm $61 Between 5-6 pm on log of 8-28

*Apparently refers to 8-28, since no spot appears on log of 8-18

Thus, of the ten July-August announcements for which charges were made, in four instances the time of actual broadcast as shown on the logs varied from one-half hour to five hours from the time shown on the invoice. It appears, also, that two of the announcements were broadcast in Class B time and two in Class A time, whereas the contract provided for Class AA time for the paid announcements.

It further appears that KLAS issued invoices containing false information as to cost of certain other announcements. An invoice dated July 31, 1971, to Charleston TV and Appliance, made available by the station, lists 72 announcements during the period July 8-31, 1971, for total charges of $1,937. No cost per announcement is indicated on the invoice. However, notations on a sheet attached to Charleston’s August invoice headed “Charleston TV Schedule July 8 / August 31, 1971,” made available by the station, indicate a rate for each announcement set forth in the schedule. The rates indicated on the schedule vary from $5 to $4 per announcement for a total of $566 rounded off to a $565 flat per week.”

A KLAS invoice dated July 31, 1971, for cooperative advertising with Charleston which was made available by Zenith, shows 44 announcements at $25–$1,100. And 10 announcements at $65–$650. A total of 54 announcements for $1,750. The 54 announcements listed on the invoice are the same 54 of those included in the 27 announcements listed on the invoice sent to Charleston as stated above, which means that Zenith was not billed for 18 of the 72 announcements. However, it appears that as a result of charging Zenith an inflated price of $65 for Class A or AA announcements, Zenith’s share of the advertising costs would be out of proportion to what it should have paid. In other words, Zenith would have paid for a considerable amount of Charleston’s other advertising. For example, examination of the invoice sent to Charleston reveals that five announcements, clearly Class AA, are included in the 18 announcements for which Zenith was not billed. If the value of these five AA announcements is computed on the basis of $65 each, they total $325. This seems to establish that the $65 rate shown on the Zenith invoice was inflated because the dollar difference between the total amount which Zenith was charged and the amount actually charged to Charleston is only $187. Further, as heretofore noted, the highest rate set forth in the Charleston TV schedule is $54 per announcement.

Another invoice to Charleston dated August 31, 1971, made available by the station, lists 94 announcements for the period August 1-31, 1971. No cost per announcement is shown on the invoice, although total charges are shown as $2,529. The latter amount is also entered in the station’s accounts receivable for Charleston. A copy of an invoice dated August 31, 1971,made available by Zenith, lists 78 announcements for the period August 1-31, 1971, and 28 at $25 = $700 appear. Total charges shown are $2,000.

A copy of another invoice also dated August 31, 1971, made available by GTE Sylvania, lists 21 cooperative Charleston announcements at $6t for a total of $1,365. Fourteen of the specific times listed for the 21 announcements are the same as those listed on the Zenith invoice. Thus, it appears that the station not only listed an inflated cost per announcement but also charged Zenith and Sylvania for some of the same announcements.

It appears, therefore, that you have violated Section 83/12-5 of the Commission’s rules by issuing, in the above recited instances, bills, invoices, affidavits, or other documents which contained false information concerning the amount actually charged for the advertising, or which misrepresented the nature of content of such advertising, or which misrepresented the quantity of advertising actually broadcast or the time of day or date at which it was broadcast.

The Commission has considered the above information and has determined, in view of all the circumstances presented, pursuant to Section 503(b)(1)(B) of the Communications Act of 1934, as amended that you have incurred an apparent liability for a forfeiture of four thousand dollars ($4,000) for the willful violations set forth above of Section 73.1205 of the Commission’s Rules.

You are hereby notified that you have the opportunity to file with the Commission, within thirty (30) days of the receipt of this Notice, a statement in writing as to why you should not be held liable, or if liable, why the amount of liability should be reduced or remitted. Any such statement should be filed in duplicate and should contain complete details concerning the allegations set out above, any justification for the violations involved, and any other information that you may desire to bring to the attention of the Commission. Statements of circumstances should be supported by copies of relevant documents where available. Upon receipt of such reply, the Commission will determine whether the facts set forth are sufficient to relieve you of liability, or to justify either reduction or remission of the amount of liability. If it is unable to find that you should be relieved of liability, the Commission will issue an Order of Forfeiture and the forfeiture will be payable to the Treasurer of the United States.

If you do not file, within thirty (30) days of the receipt of this Notice, either a statement of non-liability or a statement setting forth facts and reasons why the forfeiture should be of a lesser amount, the Commission will enter an Order of Forfeiture in the amount of four thousand dollars ($4,000).

If you do not wish to file a statement that denies liability and, in addition, you do not wish to admit the issuance of an Order, you may, within thirty (30) days of the receipt of this Notice, make payment of the forfeiture by mailing to the Commission a check or similar instrument in the amount of four thousand dollars ($4,000) drawn payable to the Treasurer of the United States.

Chairman Burch absent; Commissioner Hooks not participating.

BY DIRECTION OF THE COMMISSION

Ben F. Waple, Secretary

Cc: Edgar W. Holtz, Esquire

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