Pleading Poverty at the FCC
by Jerry Glover
April 29, 2016
Need to get an fine from the Federal Communications Commission reduced no matter what your sin? Plead poverty.
Recently, the FCC reduced a $12,000 fine to $3,000 for a radio station which claimed as a not-for-profit licensee it did not have the resources to pay. In re Christian Broadcasting of Yakima (KDHW-CD), No. 200641420003 (FCC April 25, 2016).
The station failed to file the Children’s Television Programming Reports electronically with the FCC for 15 quarters, and also failed to report that violation in its license renewal application. KDHW did not deny the violations but claimed that as a small no-profit organization it operated on a budget based on donations that have substantially decreased over the past years. As required by FCC regulations, the station provided the Commission with tax returns from the most recent three year period in support of its inability to pay claim.
The Commission confirmed that the station had willingly and repeatedly violated the quarterly report filing requirement. A forfeiture penalty can be imposed if a licensee has violated the Federal Communications Act or a Commission rule. The Commission has established a base forfeiture, when imposed, of $3,000 for failure to file required forms. But the Commission can adjust the forfeiture amount up or down by considering factors including the nature, circumstances, extent and gravity of the violation and the violator’s degree of culpability, history of prior offenses and (most importantly for this case) ability to pay.
The FCC noted that a company’s not-for-profit status is not, in and of itself, a basis for forfeiture reduction. The station has argued that its reporting failures were inadvertent so that a lesser forfeiture amount is called for. But the Commission noted that even inadvertent errors, oversights or failure to become familiar with Commission rules are still willful violations.
As noted, the station had submitted three years of tax returns to the FCC to back up its poverty claim. The station noted that its gross revenues are the best indicator of its ability to pay a forfeiture. The Commission held that the station had shown that paying the $12,000 forfeiture would cause financial hardship. So it reduced the fine to $3,000.
Take Away: Most radio/television stations cannot plead poverty. This tactic is, therefore, not common. But for small licensees it can be a powerful tool.