Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | File No. 99050522            |
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| **AMFM RADIO LICENSES, L.L.C.**  | ) | NAL/Acct. No. 200132080003   |
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| Licensee of Station WKQI(FM)     | * | Facility ID# 6592            |
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| Detroit, Michigan                | * | JJS                          |
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[NOTICE OF APPARENT LIABILITY FOR FORFEITURE]{.underline}

**Adopted: October 11, 2000 Released: October 12, 2000**

By the Chief, Enforcement Bureau:

# Introduction

1.  In this Notice of Apparent Liability for Forfeiture, we find AMFM
    Licenses, L.L.C. ("AMFM"), licensee of Station WKQI(FM), Detroit,
    Michigan, apparently liable for a forfeiture in the amount of four
    thousand dollars (\$4,000) for a violation of Section 317(a)(1) of
    the Communications Act of 1934, as amended, 47 U.S.C. § 317(a)(1),
    and Section 73.1212 of the Commission's rules, 47 C.F.R. § 73.1212,
    which requires licensees, among other things, to make sponsorship
    identification announcements whenever a station broadcasts matter in
    return for money, service, or other valuable consideration. We find
    that AMFM broadcast a record, "On A Day Like Today" by Bryan Adams,
    in consideration for Mr. Adams' agreement to appear at a concert
    sponsored by the station, without airing required sponsorship
    identification announcements.

# Background

2.  On February 2, 1998, John Madison, Sr., the Senior Vice President
    Regional Operations for Chancellor Media Corporation ("Chancellor"),
    the parent corporation of the licensee,[^1] invited other Chancellor
    executives and representatives from record labels to discuss ways
    that record labels could use Chancellor stations to better introduce
    and promote records. Following that meeting, which took place in New
    York in February 1998, Chancellor and Mercury Records developed a
    marketing campaign for Shania Twain to market her as a Top 40
    artist. The campaign included sixty second artist profile spots
    featuring the artist speaking about her music, excerpts from her
    song, and a "retail tag" informing listeners where they could
    purchase her CD. Chancellor viewed that campaign to be highly
    successful.

3.  Following the Shania Twain campaign, Chancellor began marketing
    these types of campaigns to record labels. In June or July 1998,
    representatives of A&M Records played "On a Day Like Today," a song
    by Bryan Adams, to John Ivey, the Program Director at Chancellor
    station WXKS, Boston, Massachusetts. Subsequently, on July 15, 1998,
    A&M representatives met with Mr. Madison and Bev Tilden,
    Chancellor's Vice President of Marketing, to discuss a marketing
    campaign for that song. After a couple of months of negotiations, on
    September 23, 1998, Chancellor and A&M entered into an agreement.
    Under the agreement, A&M would purchase commercials on ten
    Chancellor stations (including WKQI-FM), make Mr. Adams available
    for live concerts in various cities with Chancellor stations, and
    provide CDs, airfare, and seats for contests. In return, the
    Chancellor stations agreed to run live and recorded announcements,
    liners, promos, and contests promoting the new Bryan Adams song. The
    stations also agreed to provide hotel accommodations and spending
    money for the contests. In the written agreement, Chancellor did not
    make any representations concerning playing the Adams single.

4.  On November 10, 1998, Morty Wiggins of A&M Records sent a letter to
    Chuck Armstrong of Chancellor canceling Mr. Adams' appearance at a
    concert in Dallas. On the afternoon of November 11, Mr. Wiggins
    called John Bassanelli, Chancellor's Managing Director, to say that
    Mr. Adams would not perform at WKQI's concert because the
    cancellation of the Dallas show had made it prohibitively expensive
    for Mr. Adams to be on the road for the December 9, 1998 Detroit
    show. According to Chancellor, Tom O'Brien, the station's Program
    Director, "was frantic at the prospect of a concert cancellation"
    because the station had promoted the concert, secured a venue, and
    booked other acts to appear with Mr. Adams. Mr. O'Brien then made
    "various promises and concessions" in the hope of saving the
    concert. Later on November 11, 1998, Mr. Bassanelli wrote a letter
    to Mr. Wiggins stating "Per Tom O'Brien, the stations will commit to
    the following items in return for a firm and non-cancelable
    performance by Bryan Adams:

    1\. Immediate increase of spins of the current single 'On A Day Like
    Today' to a minimum of 25 times per week through the week ending
    December 26. The station will guarantee and fair and even \[sic\]
    rotation through critical day parts.

    2\. Guaranteed immediate add (out of the box) of the next release
    with a minimum 15 spins per week for five (5) weeks."

    The station also agreed to move the concert date to December 13,
    1998 and to provide a station appearance at a local record retailer
    of A&M's or Mr. Adams' choosing.

5.  After November 11, the station played "On A Day Like Today"
    considerably more often and at more favorable times than prior to
    that date. From November 5 through November 11, WKQI played the
    record 13 times, and over half of those plays were between midnight
    and 6:00 a.m. From November 12 through November 18, the station
    played the record 29 times, and over half of those plays were
    between 7:00 a.m. and 7:00 p.m. Except for Saturday, November 28 and
    Saturday, December 5, the station played "On A Day Like Today" at
    least three times a day every day from November 11 through
    December 13. *See* January 18, 2000 Response to Letter of Inquiry,
    Exhibit 11. The station did not air any sponsorship identification
    announcements in connection with the playing of the record. After
    the concert, the station only played "On A Day Like Today" nine more
    times (during the period from December 14 through December 21). The
    station never played the "next release" referred to in the November
    11 letter.

6.  According to AMFM, Messrs. Bassanelli and O'Brien did not consult
    with the Chancellor Legal Department, outside counsel, or more
    senior Chancellor executives before reaching their agreement with
    A&M. On December 23, 1998, after publication of newspaper articles
    reporting on the relationships between record companies and radio
    station groups, Jimmy de Castro, Chancellor's Chief Operating
    Officer, sent a memorandum to all Chancellor Radio Group employees
    stating "our promotional packages do not and may not include
    increased airplay as part of the deal. We do NOT accept 'pay for
    play' arrangements (either direct or indirect) and we do NOT make
    airplay decisions based on the sale of these packages."

# Discussion

7.  Section 317(a)(1) of the Act provides:

    All matter broadcast by any radio station for which any money,
    service or other valuable consideration is directly or indirectly
    paid, or promised to or charged or accepted by, the station so
    broadcasting, from any person, shall, at the time the same is so
    broadcast, be announced as paid for or furnished, as the case may
    be, by such person: *Provided*, That \"service or other valuable
    consideration\" shall not include any service or property furnished
    without charge or at a nominal charge for use on, or in connection
    with, a broadcast unless it is so 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.

    Similarly, Section 73.1212(a) of the Commission's rules provides, in
    pertinent part:

> When a broadcast station transmits 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
> station, the station, at the time of the broadcast, shall announce:
>
> \(1\) That such matter is sponsored, paid for, or furnished, either in
> whole or in part, and
>
> \(2\) By whom or on whose behalf such consideration was supplied. . .
> .

8.  In this case, AMFM apparently violated those provisions by not
    airing sponsorship identification announcements during the times it
    played "On A Day Like Today" pursuant to the station's November 11
    agreement with A&M Records. Under that agreement, the station
    agreed, among other things, to increase the number of times it would
    play the record in return for "a firm and non-cancelable performance
    by Bryan Adams" at the station's concert.

9.  AMFM argues that while the station made an airplay commitment,
    "because the concert was already promised in connection with the
    promotion as originally planned, no additional consideration was
    given by Adams or A&M in return for the commitment on airplay."
    *See* May 27, 1999 Response to Letter of Inquiry, p. 4. We reject
    that argument as contrary to the language of the agreements, as well
    as the language and intent of the rule. The original agreement
    between Chancellor and A&M only provided that the Detroit concert
    was a "pending" concert, as opposed to the "firm" concerts in
    Boston, New York, and Orlando. In contrast, when the station agreed
    to increase the number of times it would play "On A Day Like Today,"
    it received, in return, a "firm and non-cancelable performance" by
    Mr. Adams. Thus, AMFM clearly received an additional benefit in
    return for the promised airplay. Moreover, AMFM's statement that Mr.
    O'Brien "made various promises and concessions in the hope of saving
    the concert" further demonstrates that his commitment to play the
    record more often was part of the consideration he was offering in
    return for the concert. Moreover, subject to exceptions that are not
    pertinent here, Section 73.1212 requires sponsorship identification
    announcements whenever "money, service, or other valuable
    consideration is either directly or indirectly paid or promised to,
    or charged to or accepted by such station . . . ." That broad
    language clearly encompasses the agreement between the station and
    A&M. Since the station received the consideration of a "firm"
    concert in return for playing "On A Day Like Today," and since the
    station did not air sponsorship identification announcements when it
    played the song, the station apparently violated Section 317 of the
    Act and Section 73.1212 of the Commission's rules.

10. Section 503(b) of the Communications Act, 47 U.S.C. § 503(b), and
    Section 1.80(a) of the Commission's rules, 47 C.F.R. § 1.80(a), both
    state that any person who willfully or repeatedly fails to comply
    with the provisions of the Communications Act or the Commission's
    rules shall be liable for a forfeiture penalty. For purposes of
    Section 503(b), the term "willful" means that the violator knew it
    was taking the action in question, irrespective of any intent to
    violate the Commission's rules. *See Southern California
    Broadcasting Co.*, 6 FCC Rcd 4387 (1991). Furthermore, a continuing
    violation is "repeated" if it lasts more than one day. *Id.*, 6 FCC
    Rcd at 4388.

11. The Commission's *Forfeiture Policy Statement* sets a base
    forfeiture amount of \$4,000 for sponsorship identification
    violations.[^2] 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.

# Ordering clauses

12. 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,[^3] AMFM is hereby NOTIFIED of
    its APPARENT LIABILITY FOR FORFEITURE in the amount of four thousand
    dollars (\$4,000) for willfully and repeatedly violating Section
    73.1212 of the Commission's rules.

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

14. Payment of the forfeiture may be made by credit card through the
    Commission\'s Credit and Debt Management Center at (202) 418-1995 or
    by mailing a check or similar instrument, payable to the order of
    the Federal Communications Commission, to the Forfeiture Collection
    Section, Finance Branch, Federal Communications Commission, P.O. Box
    73482, Chicago, Illinois 60673-7482. The payment should note the
    NAL/Acct. No. referenced above.

15. The response, if any, must be mailed to Charles W. Kelley, Chief,
    Investigations and Hearings Division, Enforcement Bureau, Federal
    Communications Commission, 445 12^th^ Street, S.W, Room 3-B443,
    Washington DC 20554 and MUST INCLUDE the file number listed above.

16. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by
    Certified Mail/Return Receipt Requested, to AMFM's counsel, Eric L.
    Bernthal, Esq., Latham & Watkins, 1001 Pennsylvania Avenue, N.W.,
    Suite 1300, Washington, DC 20004-2505.

    FEDERAL COMMUNICATIONS COMMISSION

    David H. Solomon

    Chief, Enforcement Bureau

[^1]: Chancellor is now named AMFM, Inc. Since the corporation was known
    as Chancellor during the time of the events in question, we will
    refer to the corporation as Chancellor.

[^2]: *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); 47 C.F.R. § 1.80(b).

[^3]: 47 C.F.R. §§ 0.111, 0.311 and 1.80.