Cumulus Media may be on the hook for a $233,000 fine from the FCC for more violations of its sponsorship identification rules and not reporting them to the FCC after agreeing to do so under a 2016 consent decree with the Enforcement Bureau. A reading of the FCC’s Notice of Apparent Liability for Forfeiture issued Tuesday shows why the fine is so high and which stations broadcast the non-compliant spots.
In January 2016, the Commission’s Enforcement Bureau reached a record-setting $540,000 settlement with Cumulus over sponsorship identification in radio ads promoting a proposed energy project. In the largest payment in FCC history for a single-station violation of the Commission’s sponsorship ID laws, the settlement resolved an investigation into whether country “The Big 97.5” WOKQ Dover, NH violated the rules. As part of the settlement, Cumulus entered into a compliance plan, agreeing to report any noncompliance with the sponsorship ID rules within 15 calendar days after discovering the violation.
Now the FCC claims that in 2017 and 2018, seven Cumulus radio stations apparently failed, in 26 instances, to air appropriate sponsorship identifications as required by its rules. In addition, Cumulus waited nearly eight months before reporting some of these violations to the Bureau, in violation of its commitments in the 2016 consent decree.
The FCC says that one non-compliant spot sponsored by Relevant Sports aired a total of thirteen times on six radio stations in Michigan on May 16, 2017 – without the appropriate sponsorship identifications. The stations included WDVD and WDRQ Detroit; WTKA and WWWW Ann Arbor; and WFBE and WTRX Flint.
While Cumulus said the 2017 violations were “promptly reported” to the company’s compliance officer, the FCC claims Cumulus didn’t inform the FCC of the violations until January 2018 – nearly eight months later.
Another non-compliant ad for a gubernatorial candidate ran a total of thirteen times from May 14-15, 2018 on WMAC Macon, GA – again without appropriate sponsorship identifications. This time Cumulus did notify the FCC in a timely manner, reporting the violations on May 29, 2018.
In both cases Cumulus told the FCC it reported the incidents to the company’s designated compliance officer under the consent decree and continued to training regarding the sponsorship identification laws.
FCC Doubles Base Fine
In calculating the fine, the FCC used a $4,000 base fine for each of the 26 alleged violations for a sub-total of $104,000. It then slapped on another $25,000 for violating the consent decree for a total base liability of $129,000. But based on “the totality of the circumstances” – including the broadcaster’s prior violations – the Commission decided “a substantial upward adjustment” was warranted. So it doubled the $4,000 per incident forfeiture to $8,000 for a grand total of $223,000.
In issuing the proposed fine, the Enforcement Bureau said its action “advances the Commission longstanding goals of protecting consumers by ensuring that they know who is attempting to persuade them, and by protecting broadcasters and sponsors from unfair competitors that fail to abide by our disclosure rules.” Under the FCC sponsorship identification rules, broadcasters are required to air sponsorship identification announcements “when any valuable consideration is paid or promised to them in exchange for the broadcast of program material.” The rules exist to prevent broadcasters from misleading the public into believing that the paid broadcast material is a station’s independently-generated news or editorial content. They’re also intended to protect competition “by preventing sponsors from gaining an unfair advantage by paying stations to present commercial material as news or editorial content, while their competitors paid programming is properly disclosed as sponsored material,” the FCC says.
Tuesday’s NAL isn’t a final ruling – it only advises Cumulus on how it has apparently violated the law and sets a proposed fine. Under Commission rules, the FCC can’t impose a higher penalty than the proposed $233,000 amount. Cumulus has an opportunity to respond to the Notice and the FCC says it will consider the company’s submission of evidence and legal arguments before acting further to resolve the matter.