Federal Communications Commission DA 10-2313 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of TRI-STATE PUBLIC COMMUNICATIONS, INC. Licensee of Noncommercial Educational Station WHDD-FM, Sharon, Connecticut ) ) ) ) ) ) ) EB-09-IH-0015 NAL Account No. 201132080010 FRN No. 0016955916 Facility ID No. 173310 ORDER Adopted: December 15, 2010 Released: December 16, 2010 By the Chief, Enforcement Bureau: 1. In this Order, we adopt the attached Consent Decree entered into between the Enforcement Bureau (“Bureau”) and Tri-State Public Communications, Inc. (the “Licensee”). The Consent Decree terminates an investigation by the Bureau against the Licensee for possible violations of Sections 317, 399B, and 507 of the Communications Act of 1934, as amended,1 and Sections 73.503(d) and 73.1212 of the Commission’s Rules2 regarding the broadcast of sponsorship identification and underwriting announcements over Station WHDD-FM, Sharon, Connecticut (the “Station”). 2. The Bureau and the Licensee have negotiated the terms of the Consent Decree that resolve this matter. A copy of the Consent Decree is attached hereto and incorporated by reference. 3. After reviewing the terms of the Consent Decree and evaluating the facts before us, we find that the public interest would be served by adopting the Consent Decree and terminating the investigation. 4. In the absence of material new evidence relating to this matter, we conclude that our investigation raises no substantial or material questions of fact as to whether the Licensee possesses the basic qualifications, including those related to character, to hold or obtain any Commission license or authorization. 5. Accordingly, IT IS ORDERED that, pursuant to Section 4(i) of the Communications Act of 1934, as amended,3 and Sections 0.111 and 0.311 of the Commission’s Rules,4 the Consent Decree attached to this Order IS ADOPTED. 6. IT IS FURTHER ORDERED that the above-captioned investigation IS TERMINATED. 1 See 47 U.S.C. §§ 317, 399b, 508. 2 See 47 C.F.R. §§ 73.503(d), 73.1212. 3 See 47 U.S.C. § 154(i). 4 See 47 C.F.R. §§ 0.111, 0.311. Federal Communications Commission DA 10-2313 2 7. IT IS FURTHER ORDERED that the third-party complaint and allegations against the Station and/or the Licensee before the Enforcement Bureau related to the above-captioned investigation as of the date of this Consent Decree ARE DISMISSED. 8. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree shall be sent to Tri-State Public Communications, Inc., c/o WHDD-FM, 67 Main Street, Sharon, Connecticut 06069, and to its counsel, Brendan Holland, Davis Wright Tremaine, LLP, 1919 Pennsylvania Avenue N.W., Suite 200, Washington, D.C. 20006-3402, by first-class, certified mail, return receipt requested. FEDERAL COMMUNICATIONS COMMISSION P. Michele Ellison Chief, Enforcement Bureau Federal Communications Commission _____ DA 10-2313 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of TRI-STATE PUBLIC COMMUNICATIONS, INC. Licensee of Noncommercial Educational Station WHDD-FM, Sharon, Connecticut ) ) ) ) ) ) ) EB-09-IH-0015 NAL Account No. 201132080010 FRN No. 0016955916 Facility ID No. 173310 CONSENT DECREE 1. The Enforcement Bureau (“Bureau”) and Tri-State Public Communications, Inc. (the “Licensee”), by their authorized representatives, hereby enter into this Consent Decree for the purpose of terminating the Enforcement Bureau’s investigation into whether the Licensee violated Sections 317, 399B, and 507 of the Communications Act of 1934, as amended,1 and Sections 73.503(d) and 73.1212 of the Commission’s Rules,2 in connection with the broadcast of underwriting announcements over Station WHDD-FM, Sharon, Connecticut (the “Station”), and the Licensee’s compliance with the Sponsorship Identification Laws. I. DEFINITIONS 2. For the purposes of this Consent Decree, the following definitions shall apply: (a) “Act” means the Communications Act of 1934, as amended, 47 U.S.C. § 151 et seq. (b) “Adopting Order” or “Order” means an Order by the Bureau adopting the terms of this Consent Decree without change, addition, deletion, or modification. (c) “Bureau” means the Enforcement Bureau of the Federal Communications Commission. (d) “Commission” and “FCC” mean the Federal Communications Commission and all of its bureaus and offices. (e) “Complaint” means the third party complaint received by or in the possession of the Bureau, forming the basis for the Bureau’s February 23, 2009, and October 22, 2009, Letters of Inquiry,3 regarding whether the Licensee violated the Commission’s Underwriting and Sponsorship Identification Laws in connection with its operation of the Station on November 3 and 11, 2008, and on December 2 and 8, 2008. 1 See 47 U.S.C. §§ 317, 399b, 508. 2 See 47 C.F.R. §§ 73.503(d), 73.1212. 3 See Letter from Kenneth M. Scheibel, Jr., Assistant Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, to Tri-State Public Communications, Inc., dated February 23, 2009; Letter from Kenneth M. Scheibel, Jr., Assistant Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, to Tri-State Public Communications, Inc., dated October 22, 2009 (“Letters of Inquiry”). Federal Communications Commission DA 10-2313 2 (f) “Compliance Plan” means the program described in paragraph 11 and the Attachment to this Consent Decree. (g) “Effective Date” means the date on which the Commission releases the Adopting Order. (h) “Investigation” means the investigation concerning the Complaint commenced by the Bureau’s Letters of Inquiry4 regarding whether the Licensee violated the Commission’s Underwriting and Sponsorship Identification Laws in connection with its operation of the Station on November 3 and 11, 2008, and on December 2 and 8, 2008. (i) “Licensee” means Tri-State Public Communications, Inc. and its predecessors-in-interest and successors-in-interest as licensee of the Station. (j) “Parties” mean the Licensee and the Bureau. (k) “Rules” mean the Commission’s regulations found in Title 47 of the Code of Federal Regulations. (l) “Sponsorship Identification Laws” mean, individually or collectively, 47 U.S.C. § 317, 47 U.S.C. § 508, 47 C.F.R. § 73.1212, and/or any Commission policy relating to sponsorship identification or the practices commonly referred to as “payola” or “plugola.” (m) “Station” means noncommercial educational Station WHDD-FM, Sharon, Connecticut (Facility ID No. 173310). (n) “Underwriting Laws” mean 47 U.S.C. § 399b and 47 C.F.R. § 73.503(d). II. BACKGROUND 3. On December 23, 2008, the Commission received a Complaint which alleged that the Licensee had aired underwriting announcements containing “calls to action and qualitative terms intended to induce business patronage.”5 The Complaint alleged that the Licensee had received consideration in exchange for the broadcast of the announcements.6 The Complaint also provided a recording of material broadcast by the Station.7 Based on the Complaint and recording, it appeared that the Licensee aired various commercial announcements, including one in which it failed to identify the sponsor. On February 23, 2009, and October 22, 2009, the Bureau issued Letters of Inquiry to the Licensee, which directed the Licensee, among other things, to submit sworn written statements in response to questions relating to 4 See supra note 3. 5 See Letter from Complainant to Hillary S. DeNigro, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, filed December 23, 2008 (“Complaint”). 6 See id. at 2. 7 See id. at Attachment. Federal Communications Commission DA 10-2313 3 alleged violations of the Underwriting and Sponsorship Identification Laws.8 The Licensee responded on March 25, 2009, and on December 4, 2009.9 4. The Underwriting Laws define advertisements as program material broadcast “in exchange for any remuneration” and intended to “promote any service, facility, or product” of for-profit entities.10 Section 399b(b)(2) specifically provides that noncommercial educational stations may not broadcast advertisements.11 Although contributors of funds to such stations may receive on-air acknowledgements of their support, the Commission has held that such acknowledgements may be made for identification purposes only, and should not promote the contributors’ products, services, or businesses.12 Specifically, such announcements may not contain comparative or qualitative descriptions, price information, calls to action, or inducements to buy, sell, rent or lease.13 At the same time, however, the Commission has acknowledged that it is at times difficult to distinguish between language that promotes versus that which merely identifies the underwriter and is consistent with the Commission’s Rules and decisions establishing compliant underwriting announcements. Consequently, the Commission expects licensees to exercise reasonable, “good faith” judgment in this area, and affords some latitude to the judgments of licensees who do so.14 The underwriting announcements at issue here may have violated the Underwriting Laws because they appear to exceed the bounds of what is permissible and within licensee discretion under the Act and pertinent Commission precedent.15 5. The Sponsorship Identification Laws establish the general obligation of a broadcast station to air sponsorship identification announcements whenever any “money, service or other valuable consideration” is paid or promised to the station for the broadcast of program material.16 The Commission has noted that the sponsorship identification rules are “grounded in the principle that listeners and viewers are entitled to know who seeks to persuade them” and has warned that it would take enforcement action against broadcast stations and cable operators that did not comply with its rules.17 A proviso to these sections exempts stations from the requirement to make sponsorship identification announcements in certain circumstances, but these exemptions do not apply when the consideration paid or promised to a station is in the form of “money.”18 In this case, the material aired by the Licensee may not have been adequately identified as sponsored, in violation of the Sponsorship Identification Laws. 8 See supra note 3. 9 See Letter from Brendan Holland, Attorney for Tri-State Public Communications, Inc., to Marlene H. Dortch, Secretary, Federal Communications Commission, filed March 25, 2009; Letter from Brendan Holland, Attorney for Tri-State Public Communications, Inc., to Marlene H. Dortch, Secretary, Federal Communications Commission, filed December 4, 2009. 10 See 47 U.S.C. § 399b(a). 11 See 47 U.S.C. § 399b(b)(2). 12 See Commission Policy Concerning the Noncommercial Nature of Educational Broadcasting Stations, Public Notice (1986), republished, 7 FCC Rcd 827 (1992). 13 See id. 14 See Xavier University, Letter of Admonition, issued November 14, 1989 (Mass Med. Bur.), recons. granted, Memorandum Opinion and Order, 5 FCC Rcd 4920 (1990). 15 See id. 16 See 47 U.S.C. § 317(a)(1); 47 C.F.R. § 73.1212(a). 17 See, e.g., Commission Reminds Broadcast Licensees, Cable Operators and Others of Requirements Applicable to Video News Releases and Seeks Comment on the Use of Video News Releases by Broadcast Licensees and Cable Operators, Public Notice, 20 FCC Rcd 8593-94 (2005). 18 See id. Federal Communications Commission DA 10-2313 4 6. The Bureau and Licensee acknowledge that any proceedings that might result from the Investigation of the Complaint would be time-consuming and would require substantial expenditure of public and private resources. In order to conserve such resources, and to ensure continued compliance by Licensee with the Underwriting and Sponsorship Identification Laws, the Bureau and Licensee are entering into this Consent Decree in consideration of the mutual commitments made herein. III. TERMS OF AGREEMENT 7. Adopting Order. The Parties agree that the provisions of this Consent Decree shall be subject to final approval by the Bureau by incorporation of such provisions by reference in the Adopting Order without change, addition, modification, or deletion. 8. Jurisdiction. The Licensee agrees that the Bureau has jurisdiction over it and the matters contained in this Consent Decree and has the authority to enter into and adopt this Consent Decree. 9. Effective Date; Violations. The Parties agree that this Consent Decree shall become effective on the date on which the FCC releases the Adopting Order. Upon release, the Adopting Order and this Consent Decree shall have the same force and effect as any other Order of the Bureau. Any violation of the Adopting Order or of the terms of this Consent Decree shall constitute a separate violation of a Bureau Order, entitling the Bureau to exercise any rights and remedies attendant to the enforcement of a Commission Order. 10. Termination of Investigation. In express reliance on the covenants and representations in this Consent Decree and to avoid further expenditure of public resources, the Bureau agrees to terminate its Investigation and dismiss the Complaint. In consideration for the termination of said Investigation and dismissal of the Complaint, the Licensee agrees to the terms, conditions, and procedures contained herein. The Bureau further agrees that, in the absence of new material evidence, the Bureau will not use the facts developed in this Investigation through the Effective Date of the Consent Decree, or the existence of this Consent Decree, to institute, on its own motion, any new proceeding, formal or informal, or take any action on its own motion against the Licensee concerning the matters that were the subject of the Investigation. The Bureau also agrees that it will not use the facts developed in this Investigation through the Effective Date of this Consent Decree, or the existence of this Consent Decree, to institute on its own motion any proceeding, formal or informal, or take any action on its own motion against the Licensee with respect to the Licensee’s basic qualifications, including its character qualifications, to be a Commission licensee or to hold Commission authorizations. 11. Compliance Plan. For purposes of settling the matters set forth herein, the Licensee agrees to maintain a Compliance Plan related to future compliance with the Act, the Commission’s Rules, and the Commission’s Orders. The Plan will include, at a minimum, the components found in the Attachment to this Consent Decree. 12. Compliance Reports. Licensee will file compliance reports with the Commission ninety (90) days after the Effective Date, twelve (12) months after the Effective Date, twenty-four (24) months after the Effective Date, and upon expiration of this Consent Decree, three (3) years after the Effective Date. Each compliance report shall include a compliance certificate from the Compliance Officer, as defined in paragraph 7 of the Compliance Plan in the Attachment, as an agent of the Licensee, stating that the Compliance Officer has personal knowledge that the Licensee: (i) has established operating procedures intended to ensure compliance with the terms and conditions of this Consent Decree, the Underwriting Laws, and the Sponsorship Identification Laws, together with an accompanying statement explaining the basis for the Compliance Officer’s certification; (ii) has been utilizing those procedures since the previous Compliance Report was submitted; and (iii) is not aware of any instances of non- Federal Communications Commission DA 10-2313 5 compliance. The certification must comply with Section 1.16 of the Commission’s Rules19 and be subscribed to as true under penalty of perjury in substantially the form set forth therein. If the Compliance Officer cannot provide the requisite certification, the Compliance Officer, as an agent of and on behalf of the Licensee, shall provide the Commission with a detailed explanation of: (i) any instances of non-compliance with this Consent Decree, the Underwriting laws, and the Sponsorship Identification Laws; and (ii) the steps that the Licensee has taken or will take to remedy each instance of non- compliance and ensure future compliance, and the schedule on which proposed remedial actions will be taken. All compliance reports shall be submitted to the Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, Room 4-C330, 445 12th Street, S.W., Washington, D.C. 20554, with a copy submitted electronically to Kenneth M. Scheibel, Jr., at Kenneth.Scheibel@fcc.gov, Anjali K. Singh at Anjali.Singh@fcc.gov, and Amelia Brown at Amelia.Brown@fcc.gov. 13. Termination Date. Unless stated otherwise, the requirements of the Compliance Plan will expire three (3) years after the Effective Date. 14. Voluntary Contribution. Licensee agrees that it will make a voluntary contribution to the United States Treasury in the amount of $15,000. The payment will be made in three installments of $5,000, payable as follows: $5,000 on or before the twentieth day of the month following the release of the Adopting Order; $5,000 on or before three months after the date of the first payment; and payment of the balance of $5,000 on or before six months after the date of the first payment. The payment 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 in the caption to the Adopting Order. 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). The Licensee will also send electronic notification on the date said payment is made to Hillary.DeNigro@fcc.gov, Ben.Bartolome@fcc.gov, Kenneth.Scheibel@fcc.gov Anjali.Singh@fcc.gov, and Amelia.Brown@fcc.gov. 15. Waivers. The Licensee waives any and all rights it may have to seek administrative or judicial reconsideration, review, appeal or stay, or to otherwise challenge or contest the validity of this Consent Decree and the Order adopting this Consent Decree, provided the Commission issues an Order adopting the Consent Decree without change, addition, modification, or deletion. The Licensee shall retain the right to challenge Commission interpretation of the Consent Decree or any terms contained herein. If either Party (or the United States on behalf of the Commission) brings a judicial action to enforce the terms of the Adopting Order, neither the Licensee nor the Commission shall contest the validity of the Consent Decree or the Adopting Order, and the Licensee shall waive any statutory right to a trial de novo. The Licensee hereby agrees to waive any claims it may otherwise have under the Equal Access to Justice Act, 5 U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq., relating to the matters addressed in this Consent Decree. 19 See 47 C.F.R. § 1.16. Federal Communications Commission DA 10-2313 6 16. Subsequent Rule or Order. The Parties agree that if any provision of the Consent Decree conflicts with any subsequent rule or Order adopted by the Commission (except an Order specifically intended to revise the terms of this Consent Decree to which the Licensee does not expressly consent), that provision will be superseded by such Commission rule or Order. 17. Successors and Assigns. The Licensee agrees that the provisions of this Consent Decree shall be binding on its successors, assigns, and transferees. 18. Final Settlement. The Parties agree and acknowledge that this Consent Decree shall constitute a final settlement between the Parties. The Parties further agree that this Consent Decree does not constitute either adjudication on the merits or a factual or legal finding or determination regarding any compliance or noncompliance with the requirements of the Act or the Commission’s Rules and Orders. The Parties agree that this Consent Decree is for settlement purposes only and that by agreeing to this Consent Decree, the Licensee does not admit or deny noncompliance, violation or liability for violating the Act, the Commission’s Rules or Orders in connection with the matters that are the subject of this Consent Decree. 19. Modifications. This Consent Decree cannot be modified without the advance written consent of both Parties. 20. Paragraph Headings. The headings of the Paragraphs in this Consent Decree are inserted for convenience only and are not intended to affect the meaning or interpretation of this Consent Decree. 21. Authorized Representative. Each party represents and warrants to the other that it has full power and authority to enter into this Consent Decree. 22. Counterparts. This Consent Decree may be signed in any number of counterparts (including by facsimile), each of which, when executed and delivered, shall be an original, and all of which counterparts together shall constitute one and the same fully executed instrument. ________________________________ P. Michele Ellison Chief Enforcement Bureau ________________________________ Date ________________________________ Marshall Miles President Tri-State Public Communications, Inc. ________________________________ Date Federal Communications Commission DA 10-2313 7 ATTACHMENT Compliance Plan The Licensee will develop a Compliance Plan for the purpose of furthering compliance with the Underwriting and Sponsorship Identification Laws. At a minimum, the Compliance Plan will consist of the following components: 1. Commitment to High Standards for the Identification of Program Sponsors and the Airing of Underwriting Announcements and Sponsored Content. The Licensee commits to enforcing high standards with respect to the Sponsorship Identification Laws and the Underwriting Laws to avoid violations. 2. Annual Report. The Compliance Officer, as defined below, shall submit reports to the Licensee’s Board of Directors concerning the Licensee’s compliance with this Compliance Plan. The first such report shall be submitted within sixty (60) days of the Effective Date and additional reports will be submitted at least annually thereafter. 3. Training of Station Employees. A. Training on Sponsorship Identification Laws. The Licensee will conduct appropriate training of its employees who are on-air talent and/or materially participate in the on-air broadcast of program material or in the making of programming decisions and their supervisory employees (“Programming Personnel”) in the Sponsorship Identification Laws, including the FCC’s interpretation of such statutes and regulations regarding payola and related issues. B. Training on Underwriting Laws. The Licensee will conduct appropriate training of Programming Personnel in the Underwriting Laws, including the FCC’s interpretation of such statutes and regulations regarding underwriting. C. Training Schedule. Training on both the Sponsorship Identification Laws and the Underwriting Laws will be provided to all Programming Personnel within sixty (60) days of the Effective Date. The training will be provided to all new Programming Personnel within thirty (30) days after they commence their duties. Refresher training will be provided to all Programming Personnel at least once every twelve (12) months, regarding existing guidelines and, where applicable, pertinent changes to the Underwriting and Sponsorship Identification Laws. 4. Multi-level Review of Underwriting Content and Sponsored Content. Licensee will use a multi-level review procedure for underwriting content and sponsored content to be broadcast on the Station. All scripts of announcements will continue to be reviewed by the Licensee or its staff, prior to broadcast, for compliance with the Underwriting Laws. 5. Education of Prospective Underwriters. Licensee will also implement and maintain a plan to educate prospective underwriters about appropriate underwriting content and how the Licensee incorporates such underwriting content in the messages that it prepares for underwriter approval and eventual broadcast. To that end, the Licensee will summarize the Underwriting Laws for each client before it accepts any contract with the prospective underwriter to air underwriting messages over the Station and prepares the underwriting message for the underwriter’s review. The Licensee will not broadcast any announcement that does not comply with the Underwriting Laws. Federal Communications Commission DA 10-2313 8 6. Contractual Agreements. Licensee will ensure that all contractual agreements with respect to Programming Personnel include a contractual clause relating to compliance with the Sponsorship Identification Laws. 7. Compliance Officer. Within forty-five (45) days of the Effective Date, the Licensee shall designate a Compliance Officer, whose responsibility shall be to seek to ensure the Licensee’s compliance with the Compliance Plan and with the Underwriting and Sponsorship Identification Laws through the following duties: (a) the implementation, effectuation, and supervision of the training program with regard to the Underwriting and Sponsorship Identification Laws for all Licensee employees; (b) being accessible by telephone and/or e-mail to any Licensee employee who seeks advice on compliance with the Compliance Plan and the Underwriting Sponsorship Identification Laws or who wishes to report potential violations of such policies and laws; (c) the development and implementation of procedures designed to ensure Licensee’s continuing compliance with the Compliance Plan and the Underwriting and Sponsorship Identification Laws; (d) monitoring the Licensee’s compliance with the Compliance Plan and the Underwriting and Sponsorship Identification Laws; (e) reporting on a quarterly basis to the Licensee President regarding compliance of Licensee Stations and employees with the Compliance Plan and the Underwriting and Sponsorship Identification Laws; and (f) such other activities as the Compliance Officer deems necessary or appropriate to carry out his or her duties. 8. Hotline. The Compliance Officer shall maintain a hotline for employees to call the Compliance Officer to obtain advice on compliance with the Compliance Plan and report violations of the Compliance Plan. 9. FCC Enforcement Actions. If as a result of a possible violation of the Sponsorship Identification Laws at a Licensee Station occurring after the effective date of the Consent Decree, the Licensee receives a Notice of Apparent Liability or similar Bureau document proposing a forfeiture, a Bureau document contemplating license non-renewal or revocation, or a Forfeiture Order, the following steps will be taken: A. Each employee accused of violating the Sponsorship Identification Laws will be suspended and an investigation will immediately be undertaken. B. Each such employee will be required to undergo remedial training on the Compliance Plan and the Sponsorship Identification Laws and satisfy the Compliance Officer and Licensee Station management that he or she understands such regulations and policies before resuming his or her duties. C. If a Notice of Apparent Liability, Forfeiture Order or similar document assessing a forfeiture, or a document denying a renewal application and/or revoking a license issued by the FCC, is finally adjudicated and the Licensee is finally found to have violated the Sponsorship Identification Laws that results in such action by the Commission, the employee(s) materially involved in the violation or violations that are the subject of such Commission or Bureau action will be subject to further disciplinary action, up to and including termination.