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 TEXAS LICENSES LIMITED    | ) | NAL/Acct. No. 200132080004   |
| PARTNERSHIP**                    | * |                              |
|                                  | * | Facility ID# 23084           |
| Licensee of Station KHKS(FM)     |   |                              |
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| Denton, Texas                    | * |                              |
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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
    Texas Licenses Limited Partnership ("AMFM"), licensee of Station
    KHKS(FM), Denton, Texas, apparently liable for a forfeiture in the
    amount of four thousand dollars (\$4,000) for violating Section
    317(a)(1) of the Communications Act of 1934, as amended ("Act"), 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, as part of an agreement with A&M Records
    under which the station received consideration without airing
    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.

4.  Mr. John Cook, Vice President, Operations for KHKS(FM), recalls that
    he first received a copy of "On A Day Like Today" in the late summer
    of 1998 with a note indicating that Bev Tilden liked the song.
    Shortly afterwards, Mr. Cook received a call from Tom Poleman, who
    was then the Program Director at Chancellor station WHTZ, asking if
    Mr. Cook had heard the single, if he liked it, and if he was
    interested in having Bryan Adams appear at a Christmas concert for
    KHKS listeners. Mr. Cook recalls telling Mr. Poleman that while he
    did not think the song would be a hit, he would consider playing the
    song and having Bryan Adams appear at the station's Christmas
    concert. Mr. Cook claims that he was indifferent whether or not
    Bryan Adams would appear at that concert. Mr. Cook states that he
    did not think Mr. Poleman was attempting to persuade him to play the
    song by offering Mr. Adams' appearance.

5.  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
    KHKS(FM)), make Mr. Adams available for live concerts in various
    cities with Chancellor stations, and provide CDs, airfare, and seats
    for contests. The agreement provided that KHKS(FM) would receive
    \$30,400. In return, the Chancellor stations would 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. The agreement described the Dallas concert
    as "Pending" for December 12, as opposed to "firm" concerts in
    Boston, New York, and Orlando.

6.  Mr. Cook subsequently received a call from Chuck Armstrong, who was
    Chancellor's Senior Vice President Entertainment/New Media.
    According to Mr. Cook, Mr. Armstrong told him that the "strike" date
    for "On A Day Like Today" was that day and that "everyone" was
    adding the song that day. Mr. Cook declares that Mr. Armstrong told
    him that he would have to play the song 14 times a week. Mr. Cook
    stated that he added the song to the station's rotation "due to this
    pressure from Armstrong." The decision to add the song deviated from
    Mr. Cook's normal selection criteria. The station's play lists
    indicated that "On A Day Like Today" was added during the week of
    September 28 to October 4, 1998.

7.  In October 1998, A&M questioned Mr. Armstrong and John Bassanelli,
    Chancellor's Managing Director, about what it believed to be
    insufficient airplay of "On A Day Like Today" on KHKS. Messrs.
    Armstrong and Bassanelli attempted to speak with Mr. Cook, but Mr.
    Cook did not return their telephone calls. Steve Rivers,
    Chancellor's Chief of Programming, then reached Mr. Cook and told
    him to follow through on his "commitment" to the Bryan Adams
    campaign. Mr. Cook recalls that Mr. Rivers asked him to give the
    song better day part visibility. At some point, Mr. Cook requested
    his staff to play the song during the day at least once a day.

8.  On November 10, 1998, Morty Wiggins of A&M Records sent a letter to
    Chuck Armstrong of Chancellor canceling Mr. Adams' appearance at the
    KHKS(FM) concert. Brenda Adriance, the General Manager of KHKS(FM),
    told Mr. Cook that the concert was canceled because of the lack of
    airplay of "On A Day Like Today" on the station.

9.  The station's play lists indicate that "On A Day Like Today" was
    added during the week of September 28 to October 4. From the period
    of October 5 through November 1, the song was played seven times a
    week. During the week of November 2 through 8, the station played
    the song 12 times. The following week, the song was played 11 times.
    The song was then dropped from the station's rotation.

10. 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

11. 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. . .
> .

12. In this case, AMFM apparently violated those provisions by playing
    "On A Day Like Today" without airing appropriate sponsorship
    identification announcements. While the written agreement between
    Chancellor and A&M did not mention airplay of the song, under the
    specific circumstances involving KHKS(FM), we conclude that airplay
    of the record became part of the *quid pro quo* for the
    consideration the station received from A&M. That conclusion is
    based upon Mr. Cook's admission that he would not have played "On A
    Day Like Today" except for the pressure he received from Chancellor
    Entertainment management. The management officials clearly applied
    that pressure because of their attempt to support their agreement
    with A&M. Stated another way, but for the existence of the agreement
    between A&M and Chancellor, and the consideration the station
    received as part of that agreement, the station would not have
    played "On A Day Like Today." Accordingly, it appears that the
    playing of "On A Day Like Today" was linked to the consideration the
    station received from A&M. Since the station did not air sponsorship
    identification announcements when it played the record, it
    apparently violated Section 317 of the Act and Section 73.1212 of
    our rules.

13. 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.

14. 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

15. 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.

16. 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.

17. 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.

18. 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.

19. 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.