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. 200732080039   |
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|                                  | * | FRN: 00063229247             |
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NOTICE OF APPARENT LIABILITY FOR FORFEITURE

**Adopted: September 26, 2007 Released: September 26, 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 sixteen thousand dollars (\$16,000) for
    willfully and repeatedly 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 four video news releases ("VNRs")
    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 either 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 cablecast.[^3]

3.  On November 11, 2006, the Center for Media and Democracy ("CMD") and
    Free Press jointly filed a complaint against Comcast alleging that
    CN8 transmitted VNRs without providing the sponsorship
    identification required by Section 76.1615.[^4] Specifically, CMD
    alleged that on September 26, 2006, CN8 transmitted two VNRs, one
    produced for General Mills concerning the "Wheaties Fit to Win
    Challenge" and one produced for Allstate concerning life insurance.
    CMD also alleged that on September 28, 2006, CN8 transmitted a VNR
    produced for Trend Micro Software concerning laptop computer
    security and that company's security software, and on October 3,
    2006, transmitted a VNR produced for General Mills concerning the
    75^th^ anniversary of their product "Bisquick."

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

5.  Comcast responded to the letter of inquiry on July 2, 2007.[^6]
    Comcast admits that on September 26 and 28 and October 3, 2006,
    respectively, CN8, transmitted portions of the VNRs produced on
    behalf of the following entities without any sponsorship
    identification: General Mills "Wheaties Fit to Win Challenge;"
    Allstate Insurance; Trend Micro Software "Remote File Lock"; and
    General Mills "Bisquick 75^th^ Anniversary."[^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 on September 26 and 28, and October 3,
    2006.[^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 and repeated 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 material whenever that
    operator accepts "money, service or other valuable consideration" to
    carry that material. The phrase "service or other valuable
    consideration," however, does not include "service or property
    furnished either without or at a nominal charge for use on, or in
    connection with, a cablecast," *unless* such service or property is
    "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
    cablecast."[^15] Thus, while the proviso to the rule exempts service
    or property furnished without charge for use on or in connection
    with a cablecast from the duty to announce the sponsor or source of
    such material, the exception to that proviso preserves the duty when
    there is too much focus on a product or brand name in the
    programming. We now turn to consideration of Comcast's use of each
    of these VNRs without providing sponsorship identification.

## General Mills "Wheaties Fit to Win Challenge"

8.  CN8's cablecast featuring the General Mills "Wheaties Fit to Win
    Challenge" was part of a daily segment focusing on consumer issues
    during the program "Art Fennell Reports" on September 26, 2006.[^16]
    The segment, concerning health and fitness, featured the General
    Mills "Wheaties Fit to Win Challenge," a program promoting nutrition
    and exercise, and included portions of a VNR produced on behalf of
    General Mills and its "Wheaties" brand.[^17] The VNR material used
    in this consumer-issues segment contains both mentions of the
    "Wheaties" brand name and extensive images of the product.[^18]
    Indeed, it is the only product shown or mentioned during the
    segment. 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 this material falls within the
    exception specifically set forth in the proviso to the rule and that
    a sponsorship announcement was required. Because the VNR itself was
    the "valuable consideration" provided to CN8 and because it was not
    within the scope of the proviso for nonpromotional material, we
    reject Comcast's argument that it received no consideration for the
    cablecast. 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]

    **B. Allstate Insurance**

9.  CN8 cablecast a report concerning life insurance as part of a daily
    segment focusing on consumer issues during the program "Art Fennell
    Reports," on September 26, 2006.[^21] The segment, introduced with a
    reference to September as "National Insurance Month," strongly
    encourages consumers to have and to periodically review their life
    insurance policies and included portions of a VNR produced on behalf
    of Allstate Insurance.[^22] The VNR material used in this
    consumer-issues segment includes two interview segments with an
    Allstate representative, identified in the second segment by an
    on-screen graphic, seated in front of the Allstate logo.[^23] 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.[^24] We
    conclude that this material falls within the exception specifically
    set forth in the proviso to the rule and that a sponsorship
    announcement was required. Because the VNR itself was the "valuable
    consideration" provided to CN8 and because it was not within the
    scope of the proviso for nonpromotional material, we reject
    Comcast's argument that it received no consideration for the
    cablecast. 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.[^25]

##  C. Trend Micro Software {#c.-trend-micro-software .unnumbered}

10. CN8's cablecast featuring Trend Micro Software was part of a daily
    segment focusing on consumer issues during the program "Art Fennell
    Reports," on September 28, 2006.[^26] The segment, concerning laptop
    computer security and identity theft, included portions of a VNR
    produced on behalf of Trend Micro.[^27] Specifically, the segment
    used a portion of the VNR in which a Trend Micro spokesman,
    identified by an on-screen graphic, promoted Trend Micro's "Remote
    File Lock" software by explaining that it allows a consumer to move
    information to a folder that Trend Micro will lock down, password
    protect and encrypt upon notification by the consumer that their
    laptop has been stolen.[^28] 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.[^29] We conclude that this
    material falls within the exception specifically set forth in the
    proviso to the rule and that a sponsorship announcement was
    required. Because the VNR itself was the "valuable consideration"
    provided to CN8 and because it was not within the scope of the
    proviso for nonpromotional material, we reject Comcast's argument
    that it received no consideration for the cablecast. 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.[^30]

## D. General Mills "Bisquick 75^th^ Anniversary"  {#d.-general-mills-bisquick-75th-anniversary .unnumbered}

11. CN8's cablecast featuring General Mills "Bisquick 75^th^
    Anniversary" was part of a daily segment focusing on consumer issues
    during the program "Art Fennell Reports," on October 3, 2006.[^31]
    The segment, celebrating the 75^th^ anniversary of "Bisquick" baking
    mix, touted the convenience of "Bisquick" and included portions of a
    VNR produced on behalf of General Mills and its "Bisquick"
    brand.[^32] The VNR material used in this consumer-issues segment
    contains extensive images and mentions of "Bisquick," including
    excerpts from old advertisements for the product.[^33] "Bisquick" is
    the only product mentioned or shown during the segment. 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.[^34] We
    conclude that this material falls within the exception specifically
    set forth in the proviso to the rule and that a sponsorship
    announcement was required. Because the VNR itself was the "valuable
    consideration" provided to CN8 and because it was not within the
    scope of the proviso for nonpromotional material, we reject
    Comcast's argument that it received no consideration for the
    cablecast. 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.[^35]

12. The Commission's *Forfeiture Policy Statement* sets a base
    forfeiture amount of \$4,000 for sponsorship identification
    violations.[^36] 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 that
    it is appropriate to propose the base forfeiture amount of \$4,000
    for each of the four apparent violations of Section 76.1615.
    Consequently, we propose a forfeiture in the amount of \$16,000 for
    the cablecasts transmitted by CN8 on September 26 and 28, and
    October 3, 2006.

# ORDERING CLAUSES 

13. **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 Sixteen Thousand Dollars (\$16,000) for willfully and
    repeatedly violating Section 76.1615 of the Commission's rules.

14. **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.

15. 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 911-6229.

16. 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.

17. 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.

18. 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.[^37]

19. **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, a regional cable network affiliated with and owned by
    Comcast, produces and supplies programming to Comcast cable systems
    from Maine to Virginia. 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 a cablecast carried by
    Comcast on September 21, 2006, which allegedly failed to provide the
    required sponsorship identification. On September 21, 2007, we
    issued an *NAL* to Comcast finding that its cablecast of portions of
    a VNR produced on behalf of "Nelson's Rescue Sleep" apparently
    violated the sponsorship identification requirements of Section
    76.1615. *Comcast Corporation,* Notice of Apparent Liability for
    Forfeiture, DA 07-4005 (EB rel. Sept. 21, 2006).

[^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, Esquire, Willkie, Farr &
    Gallagher LLP, Counsel for Comcast Corporation, dated July 2, 2007
    ("*Response*").

[^7]: *See id.* at 4-7. Portions of the General Mills "Wheaties Fit to
    Win Challenge" and the Allstate Insurance VNRs were cablecast on
    September 26, 2006. Portions of the Trend Micro Software "Remote
    File Lock" VNR were cablecast on September 28, 2006. Portions of the
    General Mills "Bisquick 75^th^ Anniversary" VNR were cablecast on
    October 3, 2006.

[^8]: *See Response* at 1-2. The Commission has previously concluded
    that the 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); *Amendment of the Commission\'s Sponsorship
    Identification Rules (Sections 73.119, 73.289, 73.654, 73.789 and
    76.221)*, Report and Order, 52 FCC 2d 701 (1975), ¶ 37 ("We see no
    reason why the rules for such cablecasting should be different from
    those for broadcasting, for the consideration of keeping the public
    informed about those who try to persuade it would appear to be the
    same in both cases."). We will not revisit that conclusion here.

[^9]: *See* Response 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 5-6 & Declaration of Janet Zappala.

[^18]: *Response* at 6 and Exhibits 2 & 17. We note that the VNR
    material used during 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 Response* at 4-5.

[^22]: *See id.* at 5-6 & Declaration of Janet Zappala.

[^23]: *See Response* at 6 and Exhibits 4 & 19. We note that the VNR
    material used during the segment was edited, but that the editing
    did not alter the product and brand-name focus of the material.

[^24]: *See* *1963 Public Notice,* 40 FCC at 148, illustrative
    interpretation 26(b).

[^25]: We note that there may be other bases for requiring sponsorship
    identification but we do not reach these in this *Notice of Apparent
    Liability*.

[^26]: *See Response* at 4-5.

[^27]: *See id.* at 5-6 & Declaration of Janet Zappala.

[^28]: *See id.* at 6 and Exhibits 3 & 18. We note that the VNR material
    used during the segment was edited, but that the editing did not
    alter the product and brand-name focus of the material. In addition,
    the VNR apparently was edited to remove an on-screen graphic, "Video
    provided by Trend Micro." *Compare* clip of the Trend Micro VNR
    associated with the November 2006 study referenced in the
    *Complaint,* available at
    http://www.prwatch.org/files/vnrs/vnr59/059_VNR.mov (last visited
    September 25, 2007) and Exhibit 18.

[^29]: *See* *1963 Public Notice*, 40 FCC at 148, illustrative
    interpretation 26(b).

[^30]: We note that there may be other bases for requiring sponsorship
    identification but we do not reach these in this *Notice of Apparent
    Liability*.

[^31]: *See Response* at 4-5.

[^32]: *See id.* at 5-6 & Declaration of Janet Zappala.

[^33]: *See id.* at 6 and Exhibits 5 & 20. We note that the VNR material
    used during the segment was edited, but that the editing did not
    alter the product and brand-name focus of the material.

[^34]: *See* *1963 Public Notice*, 40 FCC at 148, illustrative
    interpretation 26(b).

[^35]: We note that there may be other bases for requiring sponsorship
    identification but we do not reach these in this *Notice of Apparent
    Liability*.

[^36]: *See The Commission's Forfeiture Policy Statement and Amendment
    of Section 1.80 of the Commission's Rules*, 12 FCC Rcd 17087, 17114
    (1997), *recon. denied* 15 FCC Rcd 303 (1999); *see also* 47 C.F.R.
    § 1.80(b).

[^37]: *See* 47 C.F.R. § 1.1914.