In Reply Refer To:
     1800C-1MD
     93020559
     Released: October 22, 1996
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
KTBY, Inc.
Licensee, KTBY(TV), Anchorage, AK
1840 S. Bragaw Street, #101
Anchorage, AK  99508
Dear Licensee:
This letter constitutes a NOTICE OF APPARENT LIABILITY FOR A FORFEITURE
("NAL") in the amount of ten thousand dollars ($10,000) pursuant to Section 503(b) of the
Communications Act of 1934, as amended, under authority delegated to the Chief, Mass
Media Bureau, by Section 0.283 of the Commission's Rules.  This forfeiture proceeding
concerns apparently repeated violations by KTBY(TV), Anchorage, Alaska, of the
Commission's rule limiting the amount of commercial matter that may be aired during
children's programming.
In response to the Children's Television Act of 1990, Pub. L. No. 101-437, 104 Stat. 996-
1000, codified at 47 U.S.C. Sections 303a, 303b and 394, the Commission adopted rules
prohibiting the broadcast, on weekdays, of more than 12 minutes of commercial time and, on
weekends, of more than 10.5 minutes of commercial time per hour of children's
programming.  47 C.F.R.  73.670.  The Commission also reaffirmed its policies against
host-selling and other types of interweaving and stated that where these practices resulted in a
"program-length commercial," the entire program would count as commercial time for
purposes of the children's advertising limits.   See Children's Television Programming, 6
FCC Rcd 2111, 2117-18, recon., 6 FCC Rcd 5093, 5097, 5098-99 (1991).
On October 1, 1993, the Mass Media Bureau's Enforcement Division sent you a letter of
inquiry citing possible policy and rule violations during certain children's programs which
had been monitored on KTBY(TV) by our Alaska field personnel earlier in the year.  The
letter directed your attention to two situations.  The first involved an apparent promotion for
National Bank of Alaska by program hosts during the Fox 4 Kids Club program on Monday,
February 1, 1993.  The second involved an advertisement for Pizza Hut which featured
"Goof Wear" during the half-hour Goof Troop show broadcast on Tuesday, February 2,
1993.  You responded by letter dated October 15, 1993.
Fox 4 Kids Club; National Bank of Alaska
In this spot, live program characters Kidd and Kiddie Fox, demonstrating "the virtues and
values of saving money as opposed to spending it foolishly on candy and junk food"
(according to your explanation), appeared to encourage viewers to save their money at
National Bank of Alaska, a sponsor of that day's program.  The videotape of the program
shows Kiddie Fox saying to Kidd Fox, "I saved up my allowance and all my birthday checks
from Grandma and Grandpa Fox, took it to National Bank of Alaska, opened up a savings
account, and saved enough for the bike of my dreams!"  Kidd regrets that he squandered his
money, but Kiddie comforts him, saying, "There's still hope, kids.  Watch National Bank of
Alaska Kids Club Monday on the Fox 4 Kids Club and learn cool stuff about money!"  (It is
important to note that this spot occurred during the so-called "National Bank of Alaska Kids
Club Monday" program.)
You claim that this was not a violation of the Commission's rules and policies concerning
children's television advertising because it was a "non-paid" spot intended as "edutainment."
That there was no separate consideration for the spot, however, does not necessarily resolve
the matter.  "[E]ven if no separate consideration is received for such mentions," spots that
are part of a program package for which the broadcaster receives consideration are "bonus"
spots, to be treated as commercial matter.  6 FCC Rcd 2124, n.25.   See also  SuperStation,
Inc., 8 FCC Rcd 490 (MMB 1993) ("cross-promotionals" for related for-profit business are
to be counted as commercial time, even though air time was not purchased).   Although it is
not definitively established that there was an arrangement with the sponsor such that it could
expect bonus spots, it appears from the mention that it was connected with KTBY's receipt
of consideration from National Bank of Alaska.  (It is unlikely, for example, that the hosts in
this program would have mentioned the name of a competing bank instead.)
Moreover, despite your characterization of these spots as "interstitials," the material
promotes the show's sponsor during the sponsored programming using the program's main
characters.  While these characters are not prohibited from plugging station sponsors outside
of the show with which they are identified, doing so within their program, in exchange for
consideration, is "host-selling," a practice the Commission has denounced because it takes
unfair advantage of the trust that children place in these characters.  Action for Children's
Television, 50 FCC 2d 1, 8, 16-17 (1974).   Additionally, such host-selling interweaves
program elements and commercial elements in a way that violates the Commission's basic
policies requiring adequate separation so that young children will not be confused in
distinguishing advertising from program material.
In view of all the circumstances, we believe the above-described "interstitial" was a violation
of our host-selling policy.  We ADMONISH you to avoid such situations in the future.
Goof Troop; Pizza Hut
This paid advertisement promoted the specially-priced "personal pan pizza" as part of the
"goofiest pizza pack ever, starring Disney's Goof Troop."  It included animated footage of
Goof Troop characters and shots of children dancing while wearing merchandise ("Goof
Wear") containing Goof Troop characters or designs.
You state that this spot aired within the Goof Troop show a total of four times over a four-
week period, as part of a contract to promote a "personal pan pizza," not to sell Goof Troop
paraphernalia.  You add, however, that because our letter alerted you to the fact that
advertisers sometimes include such secondary elements in their spots, you initiated a
procedure of prior visual review of each advertisement to be aired in KTBY's children's
programming.
A "program-length commercial" is a program associated with a product, in which
commercials for that product are aired.  It is counted in its entirety as commercial matter.
Children's Television Programming, 6 FCC Rcd at 2117-18.  The Goof Troop characters and
products in the advertisement are clearly related to the Goof Troop program in which the
advertisement was aired.  Accordingly, these Pizza Hut advertisements with Goof Troop
characters turn the subject 30-minute Goof Troop programs into program-length
commercials, causing KTBY(TV) to have exceeded the limits on commercial matter in
children's programming on those four occasions.
Pursuant to 47 U.S.C.  503(b), KTBY, Inc., is hereby advised of its apparent liability for a
forfeiture in the amount of ten thousand dollars ($10,000) for its apparent repeated violations
of 47 C.F.R.  73.670, by airing the program-length commercials described above on four
consecutive Tuesdays, beginning February 2, 1993, and ending February 23, 1993.  The
amount specified was reached after consideration of the factors set forth in Section 503(b)(2)
of the Communications Act, including "the nature, circumstances, extent, and gravity of the
violation."  47 U.S.C.  503(b)(2)(D).
In particular, we have considered the number of instances of commercial overages, the nature
of the overages, the period of time over which such overages occurred, and the reasons the
overages occurred.  Here we have a relatively large number (in terms of monitoring) of
potentially serious violations, caused by the licensee's apparent inattentiveness to "secondary
elements" during the four weeks in question.  In this case, we believe the "secondary
elements" were too obvious to have been overlooked so easily.  There must have been
something besides coincidence that placed this particular Pizza Hut commercial with Goof
Troop characters (as indicated in the advertising schedule you submitted) only on Tuesdays
between 3 p.m. and 5:30 p.m., surrounding and engulfing the half-hour Goof Troop program
at 4 p.m. on Tuesdays.  Although the maximum forfeiture amount authorized is $25,000 per
violation, we believe that in these circumstances a $10,000 forfeiture is a fair and effective
monetary sanction for the violations described above.
With respect to this forfeiture proceeding, you are afforded a period of thirty (30) days from
the release date of this document "to show, in writing, why a forfeiture penalty should not be
imposed or should be reduced, or to pay the forfeiture.  Any showing as to why the
forfeiture should not be imposed or should be reduced shall include a detailed factual
statement and such documentation and affidavits as may be pertinent."  47 C.F.R.
1.80(f)(3).  Other relevant provisions of Section 1.80 of the Commission's Rules are
summarized in the attachment to this letter.
                                FEDERAL COMMUNICATIONS COMMISSION
      Roy J. Stewart
      Chief, Mass Media Bureau