The FCC is standing behind its proposed forfeitures against Viacom and ESPN for allegedly misusing the EAS tones in a movie trailer.  As we previously wrote, in March 2014, the FCC proposed almost $2 million in combined fines against Viacom, NBCUniversal, and ESPN based on allegations that these programmers repeatedly transmitted a trailer for the film “Olympus Has Fallen” that included real or simulated EAS tones or similar sounds.  Viacom and ESPN challenged their respective proposed liability, while NBCUniversal voluntarily paid its proposed forfeiture.

In the Forfeiture Order, the Commission reiterated the broad scope of the laws prohibiting the transmission of EAS tones outside of an actual emergency.  First, the agency determined that the plain language of both Section 325(a) of the Communications Act (prohibiting the transmission of false distress signals) and Section 11.45 of the FCC’s rules (prohibiting the transmission of the EAS tones or a simulation thereof outside of an actual emergency) provided adequate notice that they extend to any person, whether or not that person is directly responsible for the transmission.

The FCC specifically rejected an argument by Viacom that liability should rest with the company that produced the trailer and embedded the EAS tones therein, as opposed to an “intermediary” such as a cable programmer.  First, the Commission reaffirmed that “entities acting as ‘conduits’ for misconduct cannot shift blame to a third party.”  Second, the agency stated that because each company accepted the trailer, reviewed it, and inserted it into its programming, it was “not a mere passive intermediary.”  Finally, the FCC asserted that it “has prosecutorial discretion in choosing to initiate investigations” and that its decision not to pursue an action “against any or all potentially liable entities does not preclude it from enforcing against a specific violator.”  Broadcasters and other programmers should find the agency’s first and third rationales for rejecting Viacom’s position particularly troubling, as they raise questions about whether the Commission in the future may seek to hold distributors that passively transmit programs liable for violating the EAS laws.

With respect to the nature of the content, the FCC reiterated that any transmission of the EAS tones is prohibited, whether or not such transmission is deceptive or misleading.  The Commission stated that:

[T]ransmission of the EAS Tones in a commercial advertisement is inherently deceptive and potentially harmful.  A commercial advertisement is, by its nature, program material designed to promote a product or service, not a bona fide alert of an emergency situation or authorized test of the EAS system. This misuse can cause the public to believe there is an emergency when there is none. This harm is not remedied by arguing that the listener or viewer should quickly realize that he or she has been fooled into paying attention to a mere commercial message. On the contrary, encouraging the perception that the EAS Tones may signal anything other an actual emergency or test harms the integrity of the EAS in exactly the way Section 11.45 was designed to prevent.

Finally, the FCC rejected arguments by Viacom and ESPN that the proposed forfeiture amounts—$1,120,000 and $280,000, respectively—were excessive and inconsistent with the Commission’s Forfeiture Policy Statement.  In so holding, the Commission relied on: (1) the number of transmissions, including separate transmissions on East Coast and West Coast programming feeds; (2) the “vast audience reach of each Company’s programming”; (3) the “public safety implications raised by the transmissions”; and (4) the substantial revenues of both Viacom and ESPN.  The agency specifically rejected Viacom’s argument that the separate transmissions constituted a “continuing violation,” finding instead that each transmission constituted a separate violation.  As to ESPN’s argument that its forfeiture was substantially greater on a per-transmission basis than that against the other companies, the FCC stated that it may account for factors other than the number of occurrences when calculating a forfeiture, highlighting that “all of ESPN’s violations occurred on channels with nationwide reach.”

The Forfeiture Order provides the latest evidence that EAS violations are among the Commission’s highest enforcement priorities.  All companies involved in the creation or transmission of content for broadcast, cablecast, or transmission via satellite to viewers or listeners should implement training programs and other processes to ensure that they are not involved in the transmission of EAS tones, or any sounds that can be construed as a simulation thereof, outside of an actual emergency.

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