Well Connected

Published — June 30, 2005 Updated — May 19, 2014 at 12:19 pm ET

The cost of indecency

Big settlements lead to tamer airwaves

Introduction

After a record 2004, the Federal Communications Commission has yet to issue a fine for indecent broadcasting this year, the longest pause in activity since 2001, according to records gathered by the Center for Public Integrity. The last fine issued was Dec. 22, 2004, capping off a record year in broadcast indecency enforcement in every major category. [See “2004 Broke all Records on Indecent Broadcasting“]

The pause is no doubt related to regime change and two vacancies on the Federal Communications Commission. But a far more likely cause is the impact of record settlement agreements reached in 2004 between the FCC and two giant media companies. The agreements promise dire consequences for on-air talent and other employees who participate in the airing of any future indecent broadcasts.

In 2004, the FCC signed a $3.5 million settlement agreement with Viacom Inc. and a $1.75 million agreement with Clear Channel Communications Inc., the largest payments for broadcast indecency in FCC history. Those two companies were responsible for 61 percent of all proposed fines since 2000, the Center found.

Viacom, owner of CBS Broadcasting Inc. and Infinity Broadcasting Corp., is the second-largest television station owner and second-largest radio broadcaster in the country. Clear Channel is the No. 1 radio broadcaster with about 1,200 radio stations.

By agreeing to pay, the broadcasters avoided legal fees and a potentially lengthy administrative appeals process. But they also signed compliance agreements that, according to performers and First Amendment advocates, have chilled speech on the airwaves and prompted disc jockeys and producers to think twice before airing potentially controversial broadcasts.

For example, if the FCC determines that a broadcast by a Clear Channel station is indecent, the “offending employees will be terminated without delay,” according to the agreement.

Broadcast personalities as well as freedom of speech advocates say the atmosphere is especially poisonous given that the definition of indecent speech over the airwaves is vague at best.

“There’s never been more uncertainty in the broadcast industry than today on what’s indecent and what’s not,” said Dennis Wharton, spokesman for the National Association of Broadcasters, an industry trade group. “That’s just a fact.”

Jonathan Rintels, a television screenwriter who is now executive director of the Center for Creative Voices in Media, likens the current climate to having “Big Brother sitting on your shoulder looking over your typewriter,” he said. There is a “giant gray area of potential indecency which can appear to be very arbitrary—and if you venture into that at all you are placing your job on the line and possibly your career.”

Despite the chill in the airwaves, in February the House of Representatives overwhelmingly approved legislation that would increase maximum fines against broadcasters by more than 10 times—from $32,500 to $500,000.

Forceful compliance agreement

Settlement agreements between the FCC’s Enforcement Bureau and licensees are relatively common. But settlements involving broadcast indecency actions are not. Since 1990, there have been five—three of those in 2004.

The first of those three was on June 9, 2004, when Clear Channel agreed to pay the government $1.75 million to settle fines connected to the Howard Stern radio show, the Washington, D.C.-based Elliott in the Morning show and a broadcast at two Florida stations. It was a record settlement, eclipsing the previous mark of $1.71 million paid by Infinity Broadcasting (now part of Viacom Inc.) in 1995 for shows involving Stern in the early 1990s. As part of the settlement, the agency dismissed a host of complaints against Clear Channel that had yet to reach the monetary penalty stage.

The settlement was significant for reasons well beyond its size. Clear Channel did, in fact, end up paying much more than the $797,500 value of the pending fines. By contrast, the Stern settlement in 1995 was roughly equal to the amount of outstanding penalties.

But of greater concern to Clear Channel employees was the “Responsible Broadcasting Initiative”—a one-page compliance agreement contained in the settlement.

Among its provisions:

  • Management is required to train on-air talent and producers on what is indecent and what is not.
  • If a station receives a notice of a proposed fine, the employees responsible for the broadcast are suspended and forced to undergo “remedial training” on FCC indecency regulations—even if the agency ultimately decides that the broadcast was not indecent.
  • If the employees return to the air after the initial suspension, they will be subjected to a “significant time delay—up to five minutes”—so that a program monitor will have the ability to interrupt the broadcast if the content is questionable.
  • If, after appeals, the FCC rules that a broadcast is indecent, the company agrees that “…the offending employees will be terminated without delay. This will ensure those employees who break the law by broadcasting or by materially participating in a decision to broadcast obscene or indecent material will not work for Clear Channel.”

On Aug. 12, about two months after the Clear Channel settlement, Emmis Communications Corp., employer of Chicago–based disc jockey Eric “Mancow” Muller, signed an identical agreement. Emmis agreed to pay $300,000 to settle several outstanding indecency actions. Muller is still on the air. He is a recurring guest on Fox News Channel’s morning show, Fox & Friends.

On Nov. 23, 2004, the FCC announced it had reached an agreement with Viacom for the biggest monetary settlement for indecency yet. The Viacom settlement was similar to Clear Channel’s, but not quite as severe.

Viacom agreed to pay $3.5 million to settle a number of notorious complaints, chief among them a pending fine related to a broadcast of the “Opie and Anthony Show.” The duo, now on satellite radio, was fined for an on-air contest that urged contestants to have sex in unusual locations. The show crossed the line for the FCC when a couple reportedly chose St. Patrick’s Cathedral in New York City for their interlude, which set off a firestorm of complaints to the FCC.

That fine and a number of other complaints totaled $440,500. As in the Clear Channel case, Viacom agreed to pay more than the value of the outstanding fines—in this case, much more. The settlement canceled those fines and also dismissed an undisclosed number of other complaints against Viacom’s television networks, CBS and UPN.

The Viacom order also required training and delay mechanisms and the suspension of employees if a fine were proposed. And if the broadcast personality were returned to the air, the agreement also required a delay of the signal (though not up to five minutes as included in the Clear Channel document).

In addition, rather than require the outright termination of an employee if the broadcast were ultimately ruled indecent by the FCC, the Viacom settlement requires only that he or she be “subject to further disciplinary action up to and including termination.”

FCC Chairman Kevin Martin noted the inconsistencies between the two agreements in his concurring statement supporting the fine. “I am concerned that this consent decree is significantly different and may be less of a deterrent for future violations. Moreover, by requiring less of Viacom than we have required of others, we may be treating those other companies unfairly,” he wrote.

Settling may be expedient

For a publicly traded broadcaster, the decision to settle makes good business sense, says Marvin Johnson, legislative counsel for the American Civil Liberties Union. “The FCC for a long time was not incredibly active in terms of indecency. As a result, it was basically an economic decision—if you’ve got a $32,500 fine, it’s easier to pay it than raise a Supreme Court appeal.

“Fox seems to be digging in its heels on the ‘Married by America’ thing,” Johnson added, referring to an all-time record $1.2 million fine issued against all 169 Fox Network affiliates for airing a racy reality show. “If you want to challenge this stuff, you just raise these fines—that’s going to make it economically feasible to go to the Supreme Court.”

“We are challenging it,” said Scott Grogin, vice president for corporate communications at Fox Broadcasting Co. “We do not believe the episode was indecent and we are contesting the claim.”

Rintels, who is a lawyer as well as a screenwriter, says the eagerness to settle is directly related to other regulatory issues—like ownership limits and copyright protection—that a broadcast company may have before the government.

“These companies are not going to take on the administration. They’re not going to take on the Republican majority and imperil or put at risk all the business they have in Washington … in order to take up the mantle of free speech for Howard Stern,” he said. “Just from a business perspective you can see that they would never do that—and that’s part of the problem with concentrated media—it neuters them.”

Congress is considering legislation that would make the FCC’s enforcement in recent years look tame by comparison.

In the House, H.R. 310 passed 389-38. In addition to boosting the maximum fine from $32,500 to $500,000 per incident, the bill would allow the FCC to fine the broadcast personality as well as the station and require a license-revocation hearing after three violations.

A similar bill was introduced in the Senate but has yet to see a vote. In addition, senators are considering expanding the FCC’s authority to regulate indecency on cable networks and even add violent content to the commission’s oversight.

Last year, both houses of Congress passed bills but were unable to agree on final language.

While coalitions of artists, the ACLU and some broadcasters are concentrating on mobilizing opposition to congressional action, there are a few cases that may reach the courts independent of any new legislation.

The leading candidates are the Fox fine and the $550,000 proposed fine against Viacom and its owned-and-operated stations for the infamous Janet Jackson Super Bowl halftime show. The Viacom settlement specifically excludes the Super Bowl fine. “While we deeply regret the incident involving Janet Jackson, we believe that a government fine for an unintentional broadcast is unfair and unwarranted, and we are challenging that decision,” reads a company statement.

Another live show that is being challenged is NBC’s 2003 Golden Globe Awards broadcast where U2 singer Bono used the F-word in a fit of exuberance. The broadcast was initially declared not indecent and then declared indecent by the FCC following a public outcry and a campaign by the Parents Television Council. No fine was issued but the FCC’s reversal of itself, combined with the implications of the ruling—that a fleeting use of a profanity on a live show is indecent—has prompted NBC and other groups to challenge the decision.

As for the FCC, the first order of business is to fill the vacancies created by the departure of former Chairman Michael Powell and the pending departure of Commissioner Kathleen Abernathy. But Martin, a close ally of the Bush White House, is expected to be tough on broadcasters. In testimony before the Committee on Commerce, Science and Transportation in the Senate in February 2004, he spoke in favor of higher fines, faster turnaround times for indecency actions, the creation of a family viewing hour and “addressing” the issue of indecency on cable and satellite programming.

“We need to make the decision to air indecent or profane language a bad business decision,” he said.

The current lull in broadcast indecency actions may be a sign that he has already accomplished his mission.

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