Nearly two years ago, the FCC handed Sinclair Broadcast Group and a host of its shared services partners, including Michael Anderson-helmed Cunningham Broadcasting, a Notice of Apparent Liability for Forfeiture in the millions of dollars for apparent FCC violations of its Children’s TV programming rules.
Now, the Commission has affirmed the NALF, releasing on Friday a Forfeiture Order that was actually adopted 23 days ago.
As a result, the apparent willful and repeated violation of section 73.670 of the Rules by more than 100 television stations, which failed to comply with the limits on commercial matter in children’s programming,” means a total forfeiture of upward of $3 million is being enforced.
The FCC was made aware of the rule violation by the stations themselves.
Beginning in June 2020, in the course of filing their license renewal applications via FCC Form 2100, Schedule 303-S, a number of the associated licensees listed in the NAL informed the Commission of repeated violations of the Children’s Programming Commercial Rules, established with the Children’s Television Act of 1990 — colloquially known as “KidVid” rules.
Specifically, multiple broadcast TV licensees associated with Cunningham and Sinclair, in particular, responded “No” to the question in their applications entitled Children’s Programming Commercial Limitations because a commercial for the Hot Wheels Super Ultimate Garage inadvertently aired on eleven occasions during eight 30-minute-long
episodes of Team Hot Wheels.
These commercials aired between November 10, 2018 and December 16, 2018. The
commercial was pulled from the program immediately after discovery.
When issuing the NAL in September 2022, the Commission said, “The circumstances are particularly egregious here because the commercial in this case centers around a product directly related to the children’s program being aired and was not an isolated occurrence as alleged by the licensees.”
With the August 14 adoption of the Forfeiture Order released today, Chairwoman Jessica Rosenworcel wholeheartedly agrees is right.
“The Children’s Television Act puts strict limits on advertising during kids’ programming,” she said in a statement. “There is no question these limits were crossed here, where broadcasters mixed toy commercials with programming and violated our rules. This is laid out clearly in the underlying unanimous Notice of Apparent Liability that preceded this action. Here we follow through on that earlier effort with a virtually identical Forfeiture Order that involves 19 different station groups and 113 stations. This approach is consistent with our precedent and the principle that failure to follow the law must have consequences.”
Yet, the two Republican Commissioners sided with Sinclair and its partners, vehemently dissenting on the 3-2 decision that pitted Democrats against Republicans.
Nathan Simington offered a short but stern dissenting statement, stating, “Under new and controlling Supreme Court precedent, the Commission’s authority to assess monetary forfeitures as it traditionally has done is unclear. Until the Commission formally determines the bounds of its enforcement authority under this new precedent, I am obligated to dissent from any decision purporting to impose a monetary forfeiture. I call on the Commission to open a Notice of Inquiry to determine the new constitutional contours of Commission enforcement authority.”
Brendan Carr, the senior Republican on the Commission who would likely become Chairman should former President Trump win the general election in November, was much more verbose. He says the forfeiture assessed in the FCC’s Order “illustrates broader problems with the FCC’s approach to enforcement. If we do not fix them, the courts will.”
“The forfeiture assessed in this Order may not seem large in the grand scheme. But it illustrates broader problems with the FCC’s approach to enforcement. If we do not fix them, the courts will.” — Brendan Carr
Meanwhile, Carr believes the FCC is unfairly punishing Sinclair even though he says “there is no question” in this case that Sinclair exceeded the FCC’s limits on commercial material in children’s programming due to “a technical error” that was later fixed and disclosed to the FCC’s Media Bureau.
While the FCC never accepts post-violation remedial efforts as an acceptable form of resolving a NALF, Carr thinks the financial penalty is uncalled for.
“Ordinarily, the parties would have entered a consent decree and the licensee would have agreed to a penalty,” he opines. “After all, nobody disputes that a violation took place. But that is not what happened here. Rather than settle what everyone understood to be a short-lived error, the FCC decided to throw the book and impose a forfeiture of $2,652,000 [to Sinclair].”
Noting other fines that were of lesser amounts, Carr argues, “To evade these authorities and precedents, today’s Order justifies its $2.65 million penalty through a series of moves that do not withstand scrutiny. The FCC treats a single error at Sinclair’s central facility as 83 separate rule violations, one for each station that broadcast the material. hen, after dinging the company for the same conduct 83 times over, the FCC dings Sinclair again by increasing the penalty based on the violation’s ‘geographic reach’ across 83 markets. The FCC calls the violation ‘willful’ even as it acknowledges elsewhere that it was ‘inadvertent.’ It tars the company as a repeat offender even though the most recent incident happened nearly 20 years ago.”
This sets up a fight in federal court that the Commission could lose, Carr notes.
“Our enforcement practices are at a fork in the road after the Supreme Court’s latest string of administrative law decisions,” he concludes. “The FCC is not safe anymore to disregard clear limits on its statutory authority after Loper Bright. Nor can this agency get away with arbitrary and capricious decision-making by ignoring obvious counterarguments and considerations, as Ohio v. EPA makes clear. And after Jarkesy, the FCC is on thinning ice when it decides the legality of its own enforcement actions involving forfeitures. As I’ve said before, it is time for the FCC to start the process of fundamentally reforming our enforcement practices—lest the courts step in, including in cases where bad actors deserve accountability. I think the days are numbered for FCC enforcement decisions that rest on stacked penalties, creative math, surprise standards, and extraneous behavioral conditions. I dissent.”
