Last month, the FCC’s Media Bureau partially granted a Hawaiian broadcaster’s must-carry complaint.  The case centered on an issue concerning principal headend designation but also raised viewability concerns that were left to further proceedings.

            Background.  Local commercial television broadcast stations are entitled to demand carriage on cable systems located in the station’s DMA so long as the station meets the eligibility requirements established under the Communications Act and the FCC’s must-carry rules.  For example, if a station fails to deliver a good quality signal to the cable system’s principal headend, the cable operator may deny carriage.  A cable system may designate its own principal headend as long as the choice is reasonable and is not made to evade must-carry obligations.

            In addition, under the FCC’s viewability rules, cable operators with hybrid analog-digital systems must make must-carry stations available to analog customers.  Hybrid analog-digital system operators may comply with this requirement by making must-carry signals available to analog customers, on the basic tier, either without the use of extra equipment or with equipment that costs $2 or less per-month.  Operators must also notify both customers and affected broadcasters before terminating analog carriage.

            Must-Carry Demand.  In this case, the station, KUPU, elected must-carry status in 2011 and, in 2013, demanded carriage on the operator’s systems.  In response, the operator denied KUPU’s carriage request on all systems outside Oahu, arguing that KUPU failed to deliver a good quality signal to the principal headends of the systems on other islands.  The operator conceded that the station delivered a good quality signal to the Oahu system’s headend and began carrying the signal there in digital format. 

               The Complaint.  KUPU filed a complaint seeking carriage of its signal on each island’s system.

             Principal Headend Issue.  KUPU argued that the operator treats the islands as one system with a master headend in Oahu, and, therefore, must carry the station on all islands.  The operator countered that the systems’ headends have significant signal processing and distribution responsibilities and, therefore, were reasonably designated as principal headends.  Since KUPU could not deliver a good quality signal to the “outer islands headends,” the operator concluded that the FCC should deny the complaint as to those systems. 

             The Media Bureau agreed, concluding that the operator “is permitted to designate each of its headends serving the outer islands as legitimate principal headends.”  The Bureau ordered the operator to carry KUPU on its Oahu system and denied carriage on the other islands’ systems.  But it left KUPU with a parting reminder:  under FCC rules, if a full-power station desires carriage on every system in its market, it may use alternate means, such as a fiber feed, to deliver a good quality signal to each system’s principal headend.   The cost of the alternative means however is the responsibility of the broadcaster.

              Viewability Issues.  KUPU next argued that the operator’s subscriber notice did not comply with the FCC’s viewability rules, in part because it didn’t disclose the price of equipment necessary for analog customers to continue receiving KUPU’s signal.  KUPU also argued that the operator appeared to not include the signal in its basic tier.  Instead, KUPU would only be available as part of the operator’s expanded basic package at a cost of $45 more than its basic package, which KUPU argued was contrary to the FCC’s viewabilty rule that requires operators to make reception equipment available to analog customers for less than $2 per month.  KUPU also alleged a violation of the rule requiring carriage of must-carry stations on the basic tier.

              On these issues, the Media Bureau concluded that it did not have enough evidence and committed to initiate further proceedings in order to amass a more complete record.

              If you have questions regarding the must-carry or viewability rules, you can contact Scott Friedman or Jake Baldwin at (312) 372-3930, sfriedman@cinnamonmueller.com, or jbaldwin@cinnamonmueller.com.

FCC Proposes $89,200 Forfeiture for Broadcast Station’s

Refusal to Allow Inspections and Other Violations

              In an April 28, 2014 Notice of Apparent Liability for Forfeiture, the FCC proposed an $89,200 forfeiture against a broadcast station due to the station licensee’s “repeated and egregious disregard for several [FCC] rules.”  Most significantly, the station refused, on two separate occasions, to allow FCC agents to inspect its facilities.

                On September 17 and 30, 2011, FCC agents from the Enforcement Bureau’s Philadelphia Office attempted to inspect the main studio for the station, but found it inaccessible because there was a locked gate across the driveway that led to the building.  The agents spoke to the Station Manager, but on both occasions, the Station Manager refused to provide access.  FCC agents also unsuccessfully attempted to contact the owner of the station licensee.  In addition, on March 6, 2012, FCC agents monitored the station’s channel and used direction-finding equipment to locate the source of the transmissions only to find that the transmissions came from a different antenna structure registration than the station’s authorized location.

                Accordingly, the FCC found the station’s actions constituted willfull and repeated violations of its rules, and found the station apparently liable for an $89,200 forfeiture.  The FCC substantially increased its base forfeiture amounts due to the repeated and willful nature of the station’s failures to abide by its rules and regulations.  The station has thirty days to pay or seek a reduction in the forfeiture amount.

                The FCC stressed that the case involved a fundamental component of its regulatory scheme – its ability to obtain accurate information from FCC licensees, and that the station’s actions here not only undermined the FCC’s ability to ensure proper operation, but reflected indifference toward the licensee’s obligation to serve the public trust. 

                For cable operators, this case serves as an important reminder to be prepared for unannounced visits by FCC agents.  In particular, cable operators should make sure that each cable system’s public inspection file is up-to-date and available for public inspection at any time during regular business hours.

                If you have any questions about public inspection files or other FCC violations or forfeitures, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.

Cinnamon Mueller News

                Cinnamon Mueller’s Washington, D.C. office moved last week to a new location.  The new mailing address is:  1875 Eye Street, NW, Suite 700, Washington, DC 20006.