Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | File No. EB-06-IH-3723       |
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| **COMCAST CORPORATION**          | ) | NAL/Acct. No. 200732080035   |
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|                                  | * | FRN: 00063229247             |
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NOTICE OF APPARENT LIABILITY FOR FORFEITURE

**Adopted: September 21, 2007 Released: September 21, 2007**

By the Chief, Enforcement Bureau:

# Introduction

1.  In this *Notice of Apparent Liability for Forfeiture* ("*NAL*"), we
    find that Comcast Corporation ("Comcast"), which operates an
    affiliated regional cable network, CN8, is apparently liable for a
    forfeiture in the amount of four thousand dollars (\$4,000) for
    violating Section 76.1615 of the Commission's rules.[^1] This rule
    generally requires cable operators engaged in origination
    cablecasting to make sponsorship identification announcements when
    presenting matter in return for money, service, or other valuable
    consideration. We find that Comcast cablecast portions of a video
    news release ("VNR") produced on behalf of "Nelson's Rescue Sleep"
    without also airing required sponsorship identification
    announcements.[^2]

# Background

2.  Section 76.1615(a) of the Commission's rules states:

> When a cable television system operator engaged in origination
> cablecasting presents any matter for which money, service, or other
> valuable consideration is either directly or indirectly paid or
> promised to, or charged or accepted by such cable television system
> operator, the cable television system operator, at the time of the
> cablecast, shall announce that such matter is sponsored, paid for, or
> furnished, either in whole or in part, and by whom or on whose behalf
> such consideration was supplied: *Provided, however,* that "service or
> other valuable consideration" shall not include any service or
> property furnished without or at a nominal charge for use on, or in
> connection with, a cablecast unless it is so furnished in
> consideration for an identification of any person, product, service,
> trademark, or brand name beyond an identification reasonably related
> to the use of such service or property on the broadcast.[^3]

3.  On November 11, 2006, the Center for Media and Democracy ("CMD") and
    Free Press jointly filed a complaint against Comcast alleging that,
    on September 21, 2006, CN8 transmitted a VNR produced by D.S. Simon
    Productions for Nelson's Rescue Sleep without providing the
    sponsorship identification required by Section 76.1615.[^4]

4.  On April 26, 2007, the Enforcement Bureau ("Bureau") issued a letter
    of inquiry[^5] to Comcast to determine, among other things, whether
    CN8 transmitted the VNR as alleged, and if so, whether Comcast
    disclosed the source of the VNR in its cablecast.

5.  Comcast responded to the letter of inquiry on July 2, 2007.[^6]
    Comcast admits that on September 21, 2006, its affiliated cable
    network, CN8, aired portions of a VNR produced on behalf of
    "Nelson's Rescue Sleep" without any sponsorship identification.[^7]
    Comcast argues as a threshold matter that Section 76.1615 appears to
    be invalid because the statutory provision underlying that rule,
    Section 317 of the Communications Act, as amended (the "Act"),
    applies only to broadcasting and not to cablecasting.[^8] Comcast
    states that although it does not believe that the Commission has the
    authority to apply Section 317 in the context of cable programming
    or to enforce Section 76.1615 of the Commission's rules, it
    nonetheless responded to the inquiries set forth in the LOI.[^9]
    Comcast contends that even assuming the validity of the rule, CN8's
    use of the VNR material did not violate Section 76.1615.[^10]
    Specifically, Comcast argues that no sponsorship identification is
    required unless consideration is received or promised as part of an
    express or implied agreement in exchange for use of the VNR. Comcast
    further states that CN8 and its employees did not receive and were
    not promised any consideration from any source in exchange for
    cablecasting the VNR material.[^11]

# Discussion

6.  Under Section 503(b)(1) of the Act, any person who is determined by
    the Commission to have willfully or repeatedly failed to comply with
    any provision of the Act or any rule, regulation, or order issued by
    the Commission shall be liable to the United States for a monetary
    forfeiture penalty.[^12] To impose such a forfeiture penalty, the
    Commission must issue a notice of apparent liability, and the person
    against whom the notice has been issued must have an opportunity to
    show, in writing, why no such forfeiture penalty should be
    imposed.[^13] The Commission will then issue a forfeiture if it
    finds by a preponderance of the evidence that the person has
    violated the Act or a Commission rule.[^14] We conclude under this
    standard that Comcast is apparently liable for a forfeiture for its
    apparent willful violation of Section 76.1615 of the Commission\'s
    rules.

7.  Section 76.1615(a) of the Commission's rules makes clear that when a
    cable television system operator engages in origination
    cablecasting, it must identify the sponsor of a material whenever
    that operator accepts "money, service or other valuable
    consideration" to air that material. The phrase "service or other
    valuable consideration," however, does not include "service or
    property furnished without charge or at a nominal charge for use on,
    or in connection with a broadcast," *unless* such service or
    property is "furnished in consideration for an identification in a
    broadcast of any person, product, service, trademark or brand name
    beyond an identification which is reasonably related to the use of
    such service or property on the broadcast."[^15] Thus, while the
    proviso to the rule exempts service or property furnished without
    charge from the duty to announce the sponsor or source of such
    material, the exception to that proviso reinstates the duty when
    there is too much focus on a product or brand name in the
    programming.

8.  CN8's cablecast featuring "Nelson's Rescue Sleep" was part of a
    daily segment on "Art Fennell Reports" focusing on consumer
    issues.[^16] On September 21, 2006, the consumer-issues segment
    concerned non-prescription sleep aids. The segment featured only
    "Nelson's Rescue Sleep," a commercial, natural sleep-aid product,
    and included portions of a VNR produced by D.S. Simon Productions on
    behalf of "Nelson's Rescue Sleep."[^17] The VNR material used in
    this consumer-issues segment contains extensive images and mentions
    of the product and includes the statement that "If you are one of
    the estimated 70 million Americans who have trouble sleeping -
    Rescue Sleep may be what you're looking for."[^18] We do not believe
    that this type of promotional material, furnished by a product
    manufacturer, can or should be considered within the scope of the
    proviso, which is directed to material that contains only fleeting
    or transient references to products or brand names.[^19] We conclude
    that even though CN8 received this material at no charge, it falls
    within the exception specifically set forth in the rule and that a
    sponsorship announcement was thus required. We therefore find that
    Comcast violated Section 76.1615(a) of the Commission's rules by
    willfully airing the VNR material at issue without proper
    sponsorship identification.[^20]

9.  The Commission's *Forfeiture Policy Statement* sets a base
    forfeiture amount of \$4,000 for sponsorship identification
    violations.[^21] After considering the record and all of the factors
    contained in Section 503(b)(2)(D) of the Act, 47 U.S.C. §
    503(b)(2)(D), and the *Forfeiture Policy Statement*, we believe a
    \$4,000 forfeiture is appropriate in this case, which represents the
    base amount for the cablecast transmitted by CN8 on September 21,
    2006.

# ORDERING CLAUSES 

10. **ACCORDINGLY, IT IS ORDERED THAT**, pursuant to Section 503(b) of
    the Communications Act of 1934, as amended, and Sections 0.111,
    0.311 and 1.80 of the Commission's rules, Comcast Corporation is
    hereby **NOTIFIED** of its **APPARENT LIABILITY FOR FORFEITURE** in
    the amount of Four Thousand Dollars (\$4,000) for willfully
    violating Section 76.1615 of the Commission's rules.

11. **IT IS FURTHER ORDERED**, pursuant to Section 1.80 of the
    Commission's rules, that within thirty days of the release of this
    Notice, Comcast Corporation **SHALL PAY** the full amount of the
    proposed forfeiture or **SHALL FILE** a written statement seeking
    reduction or cancellation of the proposed forfeiture.

12. Payment of the forfeiture must be made by check or similar
    instrument, payable to the order of the Federal Communications
    Commission. The payment must include the NAL/Acct. No. and FRN No.
    referenced above. Payment by check or money order may be mailed to
    Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA
    15251-8340. Payment by overnight mail may be sent to Mellon Bank/LB
    358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment
    by wire transfer may be made to ABA Number 043000261, receiving bank
    Mellon Bank, and account number 911-6106.

13. The response, if any, must be mailed to the Office of the Secretary,
    Federal Communications Commission, 445 12th Street, S.W.,
    Washington, D.C. 20554, to the Attention of: Hillary S. DeNigro,
    Chief, Investigations and Hearings Division, Enforcement Bureau,
    Room 4-C330, and must include the NAL/Acct. No. referenced above.

14. The Commission will not consider reducing or canceling a forfeiture
    in response to a claim of inability to pay unless the petitioner
    submits: (1) federal tax returns for the most recent three-year
    period; (2) financial statements prepared according to generally
    accepted accounting practices; or (3) some other reliable and
    objective documentation that accurately reflects the petitioner's
    current financial status. Any claim of inability to pay must
    specifically identify the basis for the claim by reference to the
    financial documentation submitted.

15. Requests for payment of the full amount of the NAL under an
    installment plan should be sent to: Associate Managing Director --
    Financial Operations, 445 12^th^ Street, S.W., Room 1-A625,
    Washington, D.C. 20554.[^22]

16. **IT IS FURTHER ORDERED** that a copy of this Notice shall be sent,
    by Certified Mail/Return Receipt Requested, to Peter H. Feinberg,
    Associate General Counsel, Comcast Corporation, 1500 Market Street,
    Philadelphia, Pennsylvania, 19102, and to its counsel, James L.
    Casserly, Esquire, and Megan Anne Stull, Esquire, Willkie Farr and
    Gallagher LLP, 1875 K Street, N.W., Washington, D.C. 20006.

    FEDERAL COMMUNICATIONS COMMISSION

    Kris Anne Monteith

    Chief, Enforcement Bureau

[^1]: *See* 47 C.F.R. § 76.1615.

[^2]: CN8 supplies programming to Comcast cable systems, and Comcast
    does not contest that the programming at issue here was carried on
    its cable systems.

[^3]: 47 C.F.R. § 76.1615. The rule also contains additional
    requirements for cable operators under certain circumstances.

[^4]: *See* Complaint of Timothy Karr, Campaign Director, Free Press,
    and Diane Farsetta, Senior Researcher, Center for Media and
    Democracy, dated November 14, 2006 (File No. EB-06-IH-5669)
    ("*Complaint*"). The *Complaint* also cited four other cablecasts in
    which CN8 had allegedly failed to provide the required sponsorship
    identification. This *NAL* addresses the *Complaint* only with
    respect to the September 21, 2006, cablecast on CN8.

[^5]: *See* Letter from Hillary S. DeNigro, Chief, Investigations &
    Hearings Division, Enforcement Bureau, to Comcast Corporation, dated
    April 26, 2007 ("*LOI*").

[^6]: *See* Letter from Megan Anne Stull, Willkie, Farr & Gallagher LLP,
    Counsel for Comcast Corporation, dated July 2, 2007 ("*Response*").

[^7]: *See id.* at 4.

[^8]: *See Response* at 1-2. The Commission has previously concluded
    that the statutory sponsorship identification requirements also
    apply to origination programming by cable operators. *See Commission
    Reminds Broadcast Licensees, Cable Operators and Others of
    Requirements Applicable to Video News Releases,* Public Notice, 20
    FCC Rcd 8593, 8594, n.6 (2005). We will not revisit that conclusion
    here.

[^9]: *See id.* at 3.

[^10]: *See id.*

[^11]: *See id.* at 3-4, 5, 7*.* In addition, Comcast notes that it paid
    CNN Newsource a licensing fee for access to the VNR material. *See
    id.* at 5.

[^12]: *See* 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); *see
    also* 47 U.S.C. § 503(b)(1)(D) (forfeitures for violation of 14
    U.S.C. § 1464). Section 312(f)(1) of the Act defines willful as
    \"the conscious and deliberate commission or omission of \[any\]
    act, irrespective of any intent to violate\" the law. *See* 47
    U.S.C. § 312(f)(1). The legislative history to Section 312(f)(1) of
    the Act clarifies that this definition of willful applies to both
    Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765, 97^th^
    Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
    term in the Section 503(b) context. *See, e.g.,* *Southern
    California Broadcasting Co*., Memorandum Opinion and Order, 6 FCC
    Rcd 4387, 4388 (1991) (\"*Southern California Broadcasting Co.*\").
    The Commission may also assess a forfeiture for violations that are
    merely repeated, and not willful. *See, e.g., Callais Cablevision,
    Inc.*, Notice of Apparent Liability for Monetary Forfeiture, 16 FCC
    Rcd 1359 (2001) (issuing a Notice of Apparent Liability for, *inter
    alia*, a cable television operator\'s repeated signal leakage).
    \"Repeated\" merely means that the act was committed or omitted more
    than once, or lasts more than one day. *Southern California
    Broadcasting Co.,* 6 FCC Rcd at 4388, ¶ 5; *Callais Cablevision,
    Inc.,* 16 FCC Rcd at 1362, ¶9.

[^13]: *See* 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^14]: *See, e.g., SBC Communications, Inc*., Forfeiture Order, 17 FCC
    Rcd 7589, 7591, ¶ 4 (2002) (forfeiture paid).

[^15]: 47 C.F.R. §76.1615(a).

[^16]: *See Response* at 4-5.

[^17]: *See id.* at 5 & Declaration of Janet Zappala.

[^18]: *Response* at 6 and Exhibit 1. We note that the VNR material used
    on the segment was edited, but that the editing did not alter the
    product and brand-name focus of the material.

[^19]: *See* *Applicability of Sponsorship Identification Rules,* Public
    Notice, 40 FCC 141, 148, illustrative interpretation 26(b) (1963)
    ("*1963 Public Notice*"*).*

[^20]: We note that there may be other bases for requiring sponsorship
    identification but we do not reach these in this *Notice of Apparent
    Liability*.

[^21]: *See The Commission's Forfeiture Policy Statement and Amendment
    of Section 1.80 of the Commission's Rules*, 12 FCC Rcd 17087, 17114
    (1997), *recons. denied* 15 FCC Rcd 303 (1999); 47 C.F.R. § 1.80(b).

[^22]: *See* 47 C.F.R. § 1.1914.