Nationally, all eyes are on Washington as the presidential contest heats up. The rules governing that contest are largely outside the purview of the FCC (with the exception, of course, of broadcast political advertising), but the agency continues its oversight of another type of contest — those conducted on-air by broadcasters. A recent enforcement action serves as an important reminder that when a broadcaster conducts a contest, it must follow the fine print.
On August 9, 2024, the FCC's Enforcement Bureau issued a Notice of Apparent Liability for $14,000 against a large broadcaster, the licensee of 194 stations participating in a nationwide contest that took place in early 2021. The FCC determined that the broadcaster willfully violated Section 73.1216 of its rules, which requires licensees to fully and accurately disclose material contest terms, including the "time and means of selection of winners." Section 73.1216 also requires that licensees conduct contests as advertised.
During the contest, participating stations announced a keyword 11 times each day. Listeners submitted entries by texting or submitting the keyword online by the end of the hour in which the station announced the keyword. The contest rules called for one winner to be selected randomly from each hour's entries from all participating stations, for a total of 297 total winners who would each receive a $1,000 prize. The broadcaster was to randomly select potential winners "on or about the next business day following each Contest day" and notify them within 72 business hours. According to the FCC, that did not happen.
The FCC found that the broadcaster did not select and/or notify 50 winners within the time frame specified in the contest rules. In so doing, the Commission determined that the use of the phrase "up to" in the contest rules when referring to the number of potential winners did not allow the broadcaster "to select fewer than 297 verified winners due to its own employees' negligence." Additionally, the FCC explained that the broadcaster could not avoid liability by citing poor employee performance in timely selecting winners nor did the fact that the broadcaster selected winners after receiving a Letter of Inquiry from the FCC mitigate its liability.
The proposed $14,000 fine includes a $4,000 base forfeiture for Contest Rule violations and an upward adjustment of $10,000 based on the "totality of the circumstances" and the broadcaster's prior violations of Commission rules. The FCC also did not find any basis for a downward adjustment, emphasizing that "the apparent misconduct was serious, not minor; the Licensee did not disclose the apparent misconduct until after receiving the LOI; and the Licensee has a history of prior violations."
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