David Oxenford

David Oxenford, Partner, Wilkinson Barker Knauer LLP 

Last week’s proposed $233,000 fine against Cumulus Media is a not only a high-profile reminder of just how seriously the FCC takes its sponsorship identification rules. It also signals a strong message about how tough the agency can get for even the slightest violation of a consent decree involving a previous violation of its rules. That’s the takeaway from broadcast attorney David Oxenford, sizing up the hefty fine on his Broadcast Law Blog.

“If the FCC catches you once in a rule violation, don’t get caught again for the same violation,” the respected attorney warns. “And if you agree to the terms of a consent decree in connection with that first violation, by all means abide by the letter of that decree or the FCC will not hesitate to exercise its full enforcement power.” This is especially true when it comes to political and issue advertising.

The nearly quarter-million fine proposed last week was for additional sponsorship identification violations by the broadcaster, as reported by Inside Radio. In a Notice of Apparent Liability for Forfeiture, the Commission claimed 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 a 2016 consent decree that involved a record-setting $540,000 settlement with Cumulus.

As part of the 2016 settlement, Cumulus agreed to a three-year compliance plan, which included appointing a Compliance Officer, enhancing operating procedures, conducting employee training on sponsorship ID laws and a hotline for reporting violations of the compliance plan. It also agreed to report to the FCC within 15 days any violations of these FCC rules.

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.

While the Commission doesn’t provide much detail of the alleged violations – one involved a spot sponsored by Relevant Sports in Michigan and the other was for a gubernatorial candidate in Georgia – neither spot appears to have run for more than a few days, Oxenford notes. And in both cases, Cumulus said it not only caught and corrected the violations, but it also conducted training on the rules after being alerted to the problems.

“These violations would seem like the kinds of issues that could arise at any station when a spot with an inadequate sponsorship tag slips on to the air unnoticed,” Oxenford points out. He calls it “laudable” that Cumulus quickly caught and corrected the problems. However, that didn't stop the FCC from coming down hard on the company, with one Commissioner issuing a dissenting statement suggesting the penalty should have been steeper.

The message to broadcasters, according to Oxenford? “The FCC is still watching very closely so don’t mess up – and if you do and are subject to FCC penalties, by all means do not do it again.”