FCC Sues Radio Station for Tardy Contest Prizes

Published May 31, 2016

The Federal Communications Commission leveled its big guns at tiny Saga Communications over a contest payment dispute. Even though the awards were bestowed, the FCC is suing Saga for $4,000, plus interest and the cost of the suit, citing insufficient “timeliness” of the payment.

On July 17, 2005, Saga’s Springfield, Massachusetts radio station, WAQY-FM, conducted the contest with a grand prize of a two-year lease on a Buick or cash equivalent and a “trunk load full” of Aerosmith memorabilia. The winner complained to the FCC in December 2005, saying the station promised he’d receive all the prizes by July 22, but he didn’t receive the cash until August 18 and still hadn’t received the Aerosmith memorabilia.

“The FCC wants to make it so that if someone follows the airways they really have to deliver,” said T. J. Walker, CEO of Media Training Worldwide, New York. He said the rising number of scams, particularly on the Internet, has prompted the FCC to be somewhat more aggressive than it otherwise might be.

Saga told the FCC that the one-month delay in delivering the cash was “within the zone of reasonableness” and the failure to award the memorabilia until February 2006 was a “problem” that had since been resolved, with Saga adding more prizes to compensate for the delay.

‘Waste of Time, Resources’
In 2007 the FCC fined Saga $4,000 for not conducting the contest “substantially as announced” because it didn’t meet timeliness requirements. Saga sought to have the fine canceled, saying “promptness” is not part of the FCC’s contest rules for licensees. The FCC is suing for the forfeiture amount, interest, and the costs of the lawsuit. In May, Saga filed an FCC application for review.

“The dispute sounds like a waste of all participants’ time and resources,” said Jonathan Askin, a professor of clinical law at the Brooklyn Law School. “I cannot see the bigger policy principle that resolution of this petty dispute might resolve, but then I’m not familiar with all the subtleties and tangential issues that might be implicated by the matter. Perhaps there is a bigger consumer protection issue at stake here to which I am not privy, but we would be well-served if the government made its broader policy objective more transparent.

“If there is a more profound issue underlying this dispute, the amount in controversy should be largely irrelevant,” he added.

‘Overregulation, Micromanagement’
“It sure appears that the FCC is being a bit heavy-handed here,” said Jim Lakely, co-director of the Center on the Digital Economy at The Heartland Institute in Chicago. “One could even question whether regulating the timeliness of prize delivery in a radio contest is something the commission should even regulate. It would appear that the civil courts or even the Federal Trade Commission would be better able to handle this.”

Lakely added, “I think Saga acted within the ‘zone of reasonableness’ here, and it hardly seems worth—literally—making a federal case out of a delay in delivering Aerosmith memorabilia. This is a good example of how the FCC’s instinct is always to grab more power to the point of overregulation and micromanagement of industry.”

Phil Britt ([email protected]) writes from South Holland, Illinois.