Appeals court strikes down FCC guidelines for fining broadcasters

WASHINGTON, D.C. — The U.S. Court of Appeals in Washington (D.C. Cir.) in mid-July struck down the Federal Communications Commission’s schedule of fines for violations of the Communications Act.

The court’s ruling casts doubt on the fines imposed by the FCC since it enacted the schedule in 1991. Among the companies that could benefit from the decision is Infinity Broadcasting Corp., which has been fighting more than $1.4 million in FCC fines over the allegedly indecent Howard Stern radio show.

Until the FCC issued a detailed fine schedule in 1991, the agency took a case-by- case approach to violations. The agency called the new fine schedule a “policy statement.” This “policy statement” detailed both the penalties applicable to specific violations, and the adjustments to be made under certain circumstances.

The appeals court ruled that the fine schedule was not a “policy statement,” which normally means “an indication of an agency’s current position on a particular regulatory issue.”

Noting that the FCC relied upon the schedule in virtually every case in which it set fines, the appeals court held that the “policy statement” was in fact a “rule.”

The difference was critical, because the FCC did not follow the procedures required to enact “rules,” which must be put out for public comment.

The FCC’s general counsel, Bill Kennard, told Electronic Media that the agency would not consider rebates for licensees who have paid their fines. He said that in pending cases, the FCC could reconsider the fines under the old case-by-case method.

(United States Telephone Association v. FCC; Media Counsel: John Gibson Mullan, Washington, D.C.)

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