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URL 29: The FCC Fines Channel 13 $10,000 (January 31, 1972)

URL 29: The FCC Fines Channel 13 $10,000 (January 31, 1972) (In Chapter 36, page 168) (1,928 words) (32,022 cum words)

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

An inquiry into the operation of KSHO-TV indicates that on occasions the station has joined the ABC television network after a sponsored network program has begun and that it has made a practice of discontinuing the broadcast of such programs before their conclusion in order to insert additional local commercial matter during station breaks. While such practices were going on, the licensee nevertheless submitted weekly commercial reports to ABC which did not disclose such deletions in network programs and which contained the following “Station Certification:”

“Everything carried according to schedule except as noted in the interruption, deletions, cancellation, or pre-emption column above. In the event any of the programs were not carried in their entirety for any reason not stated herein, payment to the station for such program or programs shall be waived.”

ABC states that payments to KSHO-TV for broadcasting its program were based upon the licensee’s representations in the weekly commercial reports and that it assumed that the station carried network programs in their entirety and without deletion of any kind, until it received a letter from a resident of Las Vegas last spring. It states that upon receipt of the letter, it reminded KSHO-TV of its “contractual obligation to carry ABC programs in their entirety” and that the station’s General Manager “indicated both orally and in a letter sent to us in June 1971 that KSHO-TV’s operation had been cleaned up and that earlier deviations had been eliminated.”

However, as stated above, the licensee appears to have failed to carry many programs in their entirety both before and after the assurances that ABC says it received in June 1971. The results of a spot check of five sponsored daytime network programs carried by KSHO-TV on 20 days from February to November 1971 are tabulated in Attachment a hereto. Although ABC states that its affiliates are allowed only 73 seconds for station breaks between network programs, the program logs of the station reveal that the station break time actually taken by KSHO-TV ranged up to 127 seconds and that therefore as many as 54 seconds of network programs were deleted in order to substitute additional local commercial announcements. Comparison of the times at which KSHO-TV dropped network programs with the interior time schedule of each individual broadcast furnished at our request by ABC indicates that in many instances the deleted network material included the disclosure of receipt of payment for the use or promotion of merchandise on the program which is required by Section 317 of the Communications Act and Section 73.654 of our Rules. (Footnote 1) For example, of the 19 “Let’s Make a Deal” broadcasts listed in Attachment A, in ten instances all or a portion of the announcements required under Section 317 apparently were omitted by KSHO-TV, on the following dates: March 3, 5; April 5, 6, 7, 8, 27; May 10, 24; and June 8, 1971. Of the 18 “Newlywed Game” broadcasts, all or portions of the requirement announcement apparently were deleted in seven instances—March 5; April 7, 9, 26, 27; May 28; and July 12, 1971. Of the 19 “Dating Game” broadcasts included in our spot check, all or portions of the requirement announcement apparently were deleted in 10 instances—February 8; March 1, 2, 3, 5; April 8, 9; May 28; July 12; and August 11, 1971.

Attachment A contains 10 pages of Channel 13’s station log, and Attachment B contains 2 pages of its station log.

ABC states that the above-listed announcements fell within the requirements of Section 317 of the Act and Section 73.654 of the Rules as interpreted by the Commission in the letters cited in in footnote 1.

An examination of copies of the KSHO-TV weekly television commercial reports (made available by ABC) for the weeks of February 7-13; February 28-March 6; April 4-10; April 25-May 1; May 9-15; May 23-29; and June 6-12, 1971, indicates that the licensee falsely represented to ABC that it broadcast the above Let’s Make a Deal, Newlywed Game, and Dating Game programs in their entirety.

During the 92 daytime programs checked. The station, according to its own program logs, joined the network late 60 times, and although the delays were usually of only a few seconds’ duration, in a few instances they were as extensive as 20, 30, and even 40 seconds.

In response to Commission inquiry, the licensee states, in part: “KSHO-TV has followed the practice, with some regularity, of inserting local commercial material in network entertainment programs without abridging entertainment content…between programs and in regular station breaks, in such a manner as not to be objectionable to the viewer.”

The licensee states that it has not considered “program credits, network promos, and similar non-entertainment announcements” to be entertainment programming; that other network stations throughout the nation have engaged in the same practice, which, it asserts, “has been tolerated (if not expressly condoned) by the networks,” that such a practice is especially widespread among affiliates in small markets, is for many stations “a matter of economic survival,” and that the economic plight of KSHO-TV has been well-documented to the Commission. The licensee also states:

“The Commission has never, to our knowledge, made a clear announcement that such practice was improper. There was no intention of violating any Commission rule or policy….The station has recently been advised this practice may, inadvertently, have resulted in failure to present an announcement presented by the network in compliance with Section 317 of the Communications Act. Prior to the investigation…this possibility had not occurred to KSHO-TV.”

The licensee also states that its past practice of abridging portions of some network programs “is not being followed now and will not be followed in the future.”

The Commission has considered all of the circumstances of this case and the licensee’s responses to Commission inquiry. We note initially that we have no evidence that the licensee has engaged in “double-billing” in the sense of issuing false invoices or affidavits to advertisers purchasing time directly from it. We find copious evidence, however, that the licensee has issued false statements to the network that it broadcast network commercial programs in their entirety, and that some of the network material deleted by the licensee included announcements required by Section 317 of the Communications Act and Section 73.654 of our Rules concerning receipt of consideration for inclusion of matter within programs. As set forth in the earlier footnote, we have stated specifically that Section 317 requires such an announcement and that the announcement is to be computed and logged as commercial matter. We note, further, that ABC states that its reimbursement of KSHO-TV was based upon the station’s representations in its weekly “Station Certification” and that ABC was unaware that the station was failing to carry network programs in their entirety. Although the licensee states that ”clipping” of network programs is a widespread practice and has been tolerated if not condoned by the networks, it has offered no evidence that ABC was aware of or condoned its practices here, and the facts that other licensees have committed a violation does not, of course, excuse this licensee. Although the Commission has never before ruled on a case on all fours with this one, it has found in two cases that false certification to a network that network commercials were carried constituted violation of Section 73.1205, and in a third case it ruled that falsely certifying the time that network sponsored religious programs had been broadcast constituted violation of that section. (See letter to Wake County Broadcasting Company, Inc., July15, 1970, FCC 70-780.)

In view of these facts, we have determined that pursuant to Section 503(b)(1)(B) of the Communications Act of 1934,as amended, you have incurred an apparent liability of ten thousand dollars ($10,000) for willfully or repeatedly failing to observe the provisions of Section 317 of the Communications Act and Sections 73.654 and 73.1205 of the Commission’s Rules and Regulations. We believe that false certification that the announcements required under Section 317 had been broadcast falls within the scope of Section 73.1205 of the Rules, in that it constitutes issuance of a “document…which misrepresents the quantity of advertising actually broadcast (number or length of advertising messages) or the time of day…at which it was broadcast.” (Section 73.1205)

In view of the above, we find it unnecessary to rule here on the question of whether, even had the deleted portions of programs not included the material referred to in the preceding paragraph, the submission of false certifications to the network would have constituted violation of Section 73.1205. It certainly can be argued, however, that the whole of a network commercial program, including credits and promotional messages inserted by the network itself, constitutes “advertising” for which the station is compensated by the network, and therefore that issuance of any false document regarding carriage of a network program constitutes violation of Section 73.1205. Regardless of whether, as the licensee claims, such practices are widespread and in some cases known to and tolerated by networks, it appears that failure to broadcast sponsored programs in full constitutes a deceptive practice with respect to the sponsors of network programs, unless the network advises the sponsors that the programs are not being carried in full, and the Commission expects networks and affiliated alike to make sure that advertisers are not deceived.

You are hereby notified that you have the opportunity to file with the Commission, within thirty (30) days of the date 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 heretofore made by the Commission, any justification for the violations involved, and any other information which 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 any such reply, the Commission will determine whether the facts set forth therein are sufficient to relive 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 Treasury of the United States.

If you do not wish to file a statement which denies liability, and, in addition, you do not wish to await the issuance of an Order, you may, within thirty (30) days of the date of the receipt of this letter, make payment of the forfeiture by mailing to the Commission a check, or similar instrument, in the amount of ten thousand dollars ($10,000), drawn payable to the Treasurer of the United States.

Commissioner Johnson dissenting for the reason stated in his dissenting opinion attached to FCC 72-137; Commissioner H. Rex Lee absent. (Footnote 2)

Footnote 1: The Commission ruled on December 16, 1970, that when payment is received for use of products as prizes, a clear announcement must be made of receipt of such payments and the identity of the persons making such payments, and that such announcements must be computed and logged as paid advertising. Sources: Letter to NBC, 27 FCC 2d, 75. Letter to ABC, 30 FCC 2d, 827.)

Footnote 2: I asked the FCC for a copy of Nick Johnson’s dissent, but they didn’t bother to answer me.

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