[Federal Register Volume 79, Number 244 (Friday, December 19, 2014)]
[Proposed Rules]
[Pages 75773-75780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29633]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 14-226; FCC 14-184]


Broadcast Licensee-Conducted Contests

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission proposes to amend its rules 
governing broadcast licensee-conducted contests (the ``Contest Rule'') 
in a manner that reflects how consumers access information in the 21st 
Century. This document proposes to amend the Contest Rule by, among 
other things, allowing licensees to comply with their obligation to 
disclose material contest terms either through broadcast announcements 
or by making such terms available in writing on a publicly accessible 
Internet Web site. In addition, the Commission proposes to adopt rules 
that would define the disclosure obligation in cases where a station 
chooses to meet that obligation through an Internet Web site.

DATES: Comments are due on or before February 17, 2015; reply comments 
are due on or before March 19, 2015. Written comments on the Paperwork 
Reduction Act proposed information collection requirements must be 
submitted by the public, Office of Management and Budget (OMB), and 
other interested parties on or before February 17, 2015.

ADDRESSES: You may submit comments, identified by MB Docket No. 14-226, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-
0530 or TTY: (202) 418-0432.
    In addition to filing comments with the Secretary, a copy of any 
comments on the Paperwork Reduction Act proposed information collection 
requirements contained herein should be submitted to the Federal 
Communications Commission via email to [email protected]. For detailed 
instructions for submitting comments and additional information on the 
rulemaking process, see the SUPPLEMENTARY INFORMATION section of this 
document.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Raelynn Remy of the Policy Division, Media Bureau 
at (202) 418-2120 or [email protected]. For additional information 
concerning the Paperwork Reduction Act information collection 
requirements contained in this document, send an email to [email protected] 
or contact Cathy Williams at (202) 418-2918.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking, FCC 14-184, adopted and released on November 
21, 2014. The full text is available for public inspection and copying 
during regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW., Room CY-A257, 
Washington, DC 20554. This document will also be available via ECFS at 
http://fjallfoss.fcc.gov/ecfs/. Documents will be available 
electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. The 
complete text may be purchased from the Commission's copy contractor, 
445 12th Street SW., Room CY-B402, Washington, DC 20554. Alternative 
formats are available for people with disabilities (Braille, large 
print, electronic files, audio format), by sending an email to 
[email protected] or calling the Commission's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
    The Notice of Proposed Rulemaking seeks comment on potential 
information collection requirements. If the Commission adopts any 
information collection requirements, the Commission will publish a 
notice in the Federal Register inviting the public to comment on the 
requirements, as required by the Paperwork Reduction Act of 1995, 
Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission seeks specific comment on how it 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.'' The Commission, as 
part of its continuing effort to reduce paperwork burdens, invites the 
general public and the Office of Management and Budget (OMB) to comment 
on the information collection requirements contained in this document, 
as required by the Paperwork Reduction Act of 1995, Public Law 104-13. 
Public and agency comments are due February 17, 2015.

Summary

I. Introduction

    1. In the Notice of Proposed Rulemaking (NPRM), we propose to amend 
Sec.  73.1216 of our rules governing broadcast licensee-conducted 
contests (``Contest Rule'') \1\ by, among other things, allowing 
licensees to comply with their obligation to disclose material contest 
terms either by broadcasting the material terms or making such terms 
available in writing on a publicly accessible Internet Web site. The 
NPRM stems from a Petition for Rulemaking

[[Page 75774]]

(``Petition'') filed by Entercom Communications Corp. (``Entercom'' or 
``Petitioner'') requesting that the Commission so update the Contest 
Rule in a manner that reflects how consumers access information in the 
21st Century.\2\ The Petition was unopposed, and supported by a number 
of commenters.\3\ As discussed below, we propose to modernize our rules 
to provide broadcast licensees with greater flexibility in the methods 
by which they may satisfy their obligation to disclose material contest 
terms, without relaxing licensees' duty to conduct contests with due 
regard for the public interest.
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    \1\ 47 CFR 73.1216.
    \2\ See Petition for Rulemaking filed by Entercom Communications 
Corp., CGB Docket No. RM-11684 (filed Jan. 20, 2012).
    \3\ We note that we received no comments on the Petition from 
consumer advocacy groups or members of the general public and 
encourage all interested parties to file in response to the NPRM.
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II. Background

A. The Contest Rule

    2. Radio and television stations frequently run contests as a form 
of promotion, advertisement, and entertainment. The Commission adopted 
the existing Contest Rule in 1976 to address concerns about the manner 
in which broadcast licensees were conducting contests over the air. 
That rule provides, in part:
    A licensee that broadcasts or advertises information about a 
contest it conducts shall fully and accurately disclose the material 
terms of the contest, and shall conduct the contest substantially as 
announced or advertised. No contest description shall be false, 
misleading or deceptive with respect to any material term.\4\
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    \4\ 47 CFR 73.1216. The Contest Rule defines ``contest'' as ``a 
scheme in which a prize is offered or awarded, based upon chance, 
diligence, knowledge or skill, to members of the public.'' Id., Note 
1(a). In addition, the rule provides that:
    [m]aterial terms include those factors which define the 
operation of the contest and which affect participation therein. 
Although the material terms may vary widely depending on the exact 
nature of the contest, they will generally include: How to enter or 
participate; eligibility restrictions; entry deadline dates, whether 
prizes can be won; when prizes can be won; the extent, nature and 
value of prizes; basis for valuation of prizes; time and means of 
selection of winners; and/or tie-breaking procedures. Id., Note 
1(b).
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    The Contest Rule contains prescriptions regarding the time and 
manner of disclosing material contest terms:

[T]he time and manner of disclosure of the material terms of a 
contest are within the licensee's discretion. However, the 
obligation to disclose the material terms arises at the time the 
audience is first told how to enter or participate and continues 
thereafter. The material terms should be disclosed periodically by 
announcements broadcast on the station conducting the contest, but 
need not be enumerated each time an announcement promoting the 
contest is broadcast. Disclosure of material terms in a reasonable 
number of announcements is sufficient. In addition to the required 
broadcast announcements, disclosure of the material terms may be 
made in a non-broadcast manner.\5\
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    \5\ Id., Note 2. The Contest Rule does not apply to licensee-
conducted contests that are not broadcast or advertised to the 
general public or to a substantial segment of the public, to 
contests in which the general public is not requested or permitted 
to participate, to the commercial advertisement of non-licensee-
conducted contests, or to a contest conducted by a non-broadcast 
division of the licensee or by a non-broadcast company related to 
the licensee. See id., Note 3.

The Contest Rule was premised on the Commission's conclusion that ``a 
licensee's contests should be conducted fairly and substantially as 
represented to the public, and . . . failure to do so falls short of 
the degree of responsibility expected of licensees.''
    3. As set forth above, the Contest Rule requires a licensee to 
broadcast the material terms of a contest the first time it informs its 
audience how to enter or participate, and to repeat such terms a 
reasonable number of times thereafter.\6\ Although, under the rule, 
licensees are permitted to employ non-broadcast methods for disclosing 
material contest terms, they may not substitute such methods for the 
required broadcast disclosure.
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    \6\ See 47 CFR 73.1216, Note 2.
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B. Petition for Rulemaking

    4. In January 2012, Entercom filed the Petition requesting that the 
Commission revise the disclosure requirements of Sec.  73.1216. 
Specifically, Petitioner proposes that the Commission amend Sec.  
73.1216 to permit broadcasters to satisfy their obligation to disclose 
material contest terms either by: (i) Broadcasting such terms on the 
station (as required by the current rule); \7\ or (ii) providing 
material terms in written form on a Web site and upon request by email, 
facsimile, mail, or in person, provided that the station makes periodic 
announcements informing viewers and listeners how and where the public 
can obtain access to the material terms.\8\ In addition, Petitioner 
asserts that broadcasters that lack their own Web sites should be 
allowed to post contest terms on the Web site of a state broadcasters' 
association that permits such posting.
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    \7\ As discussed infra, Petitioner does not propose complete 
elimination of broadcast disclosure because, it argues, such on-air 
announcements may still make sense for some licensees and for simple 
contests where little information has to be conveyed to listeners. 
See Entercom Petition at 5.
    \8\ Id. Although Petitioner proposes to require licensees to 
make contest terms available, upon request, via email facsimile, 
postal mail, or in person, we decline to propose this at this time 
because we believe that permitting licensees to disclose contest 
terms through broadcast and Internet methods is adequate to ensure 
the availability of material contest information to the public.
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    5. Petitioner contends that its proposed revisions will bring the 
Contest Rule into alignment with how Americans access and consume 
information in the 21st Century and provide for a more effective means 
of distributing contest information to the public. It asserts that, 
``[i]n today's fast paced world, Americans expect to instantly access 
information . . . by merely logging on to a Web site [or] conducting 
[an Internet] search''; thus, it argues, reliance on broadcast 
announcements to disseminate material contest information is no longer 
an acceptable way to inform the public about contest terms. Petitioner 
asserts that the vast majority of broadcasters already have dedicated 
Web sites where they can post complete contest information that the 
public can access ``on demand.'' Moreover, it argues that licensees can 
disseminate contest information via additional methods, such as email, 
that are more effective than broadcast at conveying contest terms.
    6. Petitioner argues that, because the current rule requires 
licensees to disclose material contest terms via broadcast only 
periodically, such disclosures may not be heard or seen by an audience 
member interested in the contest. Further, Petitioner contends that the 
material terms of some contests can be quite complex and lengthy, such 
that even if listeners hear (or see, in the case of television) a 
periodic announcement of such terms, it is nearly impossible for them 
to comprehend and remember all of the information disclosed. Thus, it 
asserts, audiences are not likely to obtain useful information from 
such broadcasts.
    7. Petitioner contends that the public today accesses information 
in ways that are dramatically different from how the public accessed 
information when the Contest Rule was adopted, and cites evidence that 
the Internet is the medium used by most Americans to obtain information 
instantaneously. According to Petitioner, the public is accustomed to 
accessing station Web sites to obtain current news, weather, traffic 
reports, and other information, and, therefore, the public reasonably 
expects to find contest information on station Web sites. Petitioner 
further notes that the Commission itself has recognized the

[[Page 75775]]

ubiquity and efficiency of the Internet and its utility to Commission 
processes.
    8. In November 2012, the Commission's Consumer and Governmental 
Affairs Bureau (``CGB'') issued a Public Notice inviting comment on the 
Petition. Each of the sixteen parties that responded to the Public 
Notice support the Petitioner's request to commence a rulemaking 
proceeding to modernize the Contest Rule.

III. Discussion

    9. We propose to amend the Contest Rule to allow broadcasters to 
satisfy their obligation to disclose material contest terms by making 
such terms available in writing on a publicly accessible Internet Web 
site. We believe that this rule revision will give broadcasters greater 
flexibility in the means by which they may comply with the Contest Rule 
and is consistent with the Commission's recognition that the Internet 
is an effective tool for distributing information to broadcast 
audiences. We seek comment on this proposal. Although the Commission's 
rule currently requires that material terms be disclosed periodically 
by announcements broadcast on the station,\9\ we agree with parties who 
assert that the dramatic changes in the way that consumers access 
information since the Contest Rule was adopted justify updating the 
rule. As some commenters note, the public is accustomed to accessing 
station Web sites to obtain a broad range of information. In fact, the 
record reflects that some licensees already use their Web sites to post 
contest-related information, and allow consumers to enter and 
participate in contests via station Web sites. Parties contend that 
posting material contest terms in writing on station Web sites will 
give potential contest participants immediate access to those terms and 
allow the public to review the terms at their convenience, thereby 
meeting consumer expectations for accessing such information and 
potentially reducing consumer confusion.
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    \9\ In particular, the Contest Rule provides that: ``The 
material terms should be disclosed periodically by announcements 
broadcast on the station conducting the contest. . . . In addition 
to the required broadcast announcements, disclosure of the material 
terms may be made in a non-broadcast manner.'' 47 CFR 73.1216, Note 
2. See also Good Karma Broad. LLC, 27 FCC Rcd 10938, 10941 n.32 (EB 
2012) (``Posting contest rules on a station's Web site does not 
satisfy Sec.  73.1216's requirement that a licensee broadcast the 
material terms of a contest it conducts.''); Joint Commenters 
Comments at 2, citing Clear Channel Communications, Inc., 27 FCC Rcd 
343, 346 ] 6 (EB 2012) (``While stations are free to provide contest 
information in other formats, including Internet postings, numerous 
Commission decisions have repeatedly made clear that `licensees 
cannot avail themselves of alternative non-broadcast announcements 
to satisfy the requirement that they accurately announce a contest's 
material terms.' '').
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    10. We propose to allow a broadcast station to satisfy its Sec.  
73.1216 disclosure obligation by posting material contest terms on the 
station's Internet Web site, the licensee's Web site, or, if neither 
the individual station nor the licensee has its own Web site, any 
readily publicly accessible Internet Web site.\10\ We seek comment on 
the costs and benefits of adopting this proposal. In addition, we seek 
comment on whether and to what extent we should adopt rules specifying 
the format for contest disclosures that are posted on Internet Web 
sites.
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    \10\ As noted above, although Petitioner proposes to allow 
stations that do not have their own Web site to post material 
contest terms to the Web site of a state broadcasters' association, 
NSBA has asserted that ``there is no unanimity among the State 
Associations for agreeing to serve as a third-party Web host for 
station contest rules.'' See NSBA Comments at 6. See also VAB 
Comments at 3; OAB Comments at 4; NCAB Comments at 3. NSBA thus 
proposes to allow licensees the option of posting their contest 
rules on any Web site that allows such posting, under certain 
conditions. NSBA Comments at 6. Petitioner does not oppose NSBA's 
proposal. See Entercom Reply at 3-4.
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    11. If a licensee uses an Internet Web site to disclose material 
contest terms, how could we ensure that such terms are easy for 
consumers to locate on that Web site? For example, should we require a 
link on the Web site's home page to the contest terms? How long should 
a licensee be required to maintain the contest information on the Web 
site? NSBA asserts that a non-station Web site that is used to comply 
with the Contest Rule's disclosure requirements must be ``accessible to 
the public 24/7 during the contest, for free, and without any 
registration requirement.'' Should a revised Contest Rule contain these 
requirements? Are there other Web site characteristics or requirements 
that the rule should mandate to promote the goal of public 
accessibility? We are sensitive to the possibility that consumers may 
become frustrated if they cannot readily locate a contest's material 
terms on a non-licensee Web site, and seek comment on how licensees 
might anticipate and avoid problems associated with posting content 
rules to non-licensee sites. We propose to apply the same rule to radio 
and television licensees, but seek comment on whether any differences 
in those services merit different treatment in the rule. In particular, 
we seek comment on the impact of the above proposals on small 
broadcasters.
    12. We note that the disclosure requirements in Sec.  73.1216 
pertain to ``material'' contest terms, defined as those terms that 
``define the operation of the contest and which affect participation 
therein.'' Section 73.1216 provides that ``material terms may vary 
widely depending on the exact nature of the contest,'' but that such 
terms generally will include: How to enter or participate; eligibility 
restrictions; entry deadline dates, whether prizes can be won; when 
prizes can be won; the extent, nature and value of prizes; basis for 
valuation of prizes; time and means of selection of winners; and/or 
tie-breaking procedures. To the extent that licensees have difficulty 
determining which terms are ``material'' and thus subject to disclosure 
under the Contest Rule, would revising the rule as proposed eliminate 
or reduce the need for licensees to make this determination, insofar as 
they could post all contest information in writing online? On the other 
hand, is it necessary to require that licensees set apart or 
distinguish in some way contest terms deemed ``material'' from other 
contest information to ensure that this important information is 
readily available to the public and not buried in lengthy fine print? 
We seek comment generally on whether or to what extent we need to 
refine the definition of ``material'' given our proposed change to the 
Contest Rule. To avoid consumer confusion, we propose that, consistent 
with existing Commission precedent, any material terms announced on air 
must not differ from the material terms disclosed on a Web site.\11\
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    \11\ For example, if the on air announcement or advertising for 
the contest identifies a particular prize by brand name or model, 
then the Web site disclosure must be the same.
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    13. We propose further to modify the Contest Rule by requiring 
stations that choose to satisfy their disclosure obligations via an 
Internet Web site to broadcast the complete, direct Web site address 
where the contest terms are posted \12\ each time the station mentions 
or advertises a contest. Under the current rule, stations are required 
to broadcast material terms periodically after their initial 
disclosure. The discretion afforded licensees under the current rule to 
determine when they will broadcast material terms after initial 
disclosure can potentially leave a consumer without access to such 
terms at the time a contest is advertised on air, as well as create 
uncertainty for broadcasters about their compliance

[[Page 75776]]

with the rule. Although the rule changes we propose diverge from 
Petitioner's proposal (which would require stations to broadcast 
announcements identifying the Web site address only periodically), we 
believe that requiring licensees to broadcast the Web site address 
where contest terms are available each time they mention or advertise a 
contest will better inform the public of material contest information 
and is not unduly burdensome. We believe that such a requirement is 
less burdensome than requiring a licensee to periodically broadcast 
material contest terms in full. Therefore, we propose to require 
licensees to broadcast the Web site address on which material contest 
terms are posted each time they mention or advertise a contest. In 
addition, if a licensee that chooses to satisfy its disclosure 
obligations via the Internet changes the material terms of a contest 
after the contest is first announced, we propose that the licensee must 
announce on air that the contest rules have changed and direct 
participants to the Web site to review the changes. We seek comment on 
the appropriate frequency and duration of this requirement. For 
example, should this announcement have to be made each time the 
licensee announces the contest and broadcasts the Web site address 
where such terms are posted, and if so, for how long should that 
requirement last? \13\ We seek comment on these proposals, including 
the costs and benefits of adopting these rules. We also seek comment on 
the impact of these proposals on small licensees.
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    \12\ By complete, direct Web site address, we mean the address 
that will take the consumer directly to the page on the Web site 
where the contest terms are posted. If licensees post the contest 
terms on the home page of the Web site or post a direct link to the 
contest terms on the home page, then announcing the home page 
address will suffice to ensure consumers can easily find and review 
the terms of the contest.
    \13\ The Commission has interpreted the existing Contest Rule to 
impose on licensees an obligation to notify the public of changes to 
material contest terms by announcing such changes over the air. See 
Access 1 New Jersey License Co., LLC, Notice of Apparent Liability 
for Forfeiture, 22 FCC Rcd 4232, 4235, ] 8 and n.24 (EB 2007) 
(finding that a licensee's failure to notify the public of changes 
to material contest terms violated the Contest Rule). See also Clear 
Channel Broad. Licenses, Inc., Notice of Apparent Liability for 
Forfeiture, 21 FCC Rcd 4072 (EB 2006) (imposing forfeiture for 
unannounced contest rule change that excluded contestant's multiple 
entries). Thus, if we were to amend the Contest Rule to permit 
disclosure of material contest terms via a Web site, licensees that 
chose to comply with their disclosure obligations via broadcast 
similarly would be required to notify the public of changes to such 
terms through broadcast announcements.
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    14. We propose that we should still permit broadcast disclosure as 
one means of complying with the Contest Rule. As Petitioner notes, 
broadcast disclosure of material contest information ``may still make 
sense for some broadcasters and for extremely simple contests where 
very little information has to be conveyed to the [audience].'' If we 
retain broadcast disclosure as a method of complying with the Contest 
Rule, should we make any changes to the rule to improve the 
effectiveness of broadcasting material contest terms?

IV. Procedural Matters

A. Regulatory Flexibility Act

    15. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA'') \14\ the Commission has prepared this present Initial 
Regulatory Flexibility Act Analysis (``IRFA'') concerning the possible 
significant economic impact on small entities by the policies and rules 
proposed in the NPRM. Written public comments are requested on this 
IRFA. Comments must be identified as responses to the IRFA and must be 
filed by the deadlines for comments provided on the first page of the 
NPRM. The Commission will send a copy of the NPRM, including this IRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration 
(``SBA'').\15\ In addition, the NPRM and IRFA (or summaries thereof) 
will be published in the Federal Register.\16\
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    \14\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Pub. L. 104-121, Title II, 110 Stat. 857 (1996).
    \15\ See 5 U.S.C. 603(a).
    \16\ See id.
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1. Need for, and Objectives of, the Proposed Rule Changes
    16. The NPRM stems from an unopposed Petition for Rulemaking filed 
by Entercom Communications Corp. requesting that the Commission update 
Sec.  73.1216 of its rules governing broadcast licensee-conducted 
contests (the ``Contest Rule'') \17\ in a manner that reflects how 
consumers access information in the 21st Century.\18\ The NPRM proposes 
to amend the Contest Rule by, among other things, allowing licensees to 
comply with their obligation to disclose material contest terms either 
through broadcast announcements or by making such terms available in 
writing on a publicly accessible Internet Web site.
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    \17\ 47 CFR 73.1216.
    \18\ See Petition for Rulemaking filed by Entercom 
Communications Corp., CGB Docket No. RM-11684 (filed Jan. 20, 2012).
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    17. In particular, the NPRM proposes to amend the Contest Rule: (i) 
To permit a licensee that chooses to satisfy its disclosure obligations 
by means of an Internet Web site to make material contest terms 
available on the station's Web site, the licensee's Web site, or, if 
neither the station nor the licensee has its own Web site, any publicly 
accessible Internet Web site; (ii) to require that any material contest 
terms announced on air not differ from the material terms disclosed on 
a Web site; (iii) to require a station that chooses to satisfy its 
disclosure obligation via the Internet to broadcast the complete, 
direct Web site address where the contest terms are posted each time 
the station mentions or advertises a contest; and (iv) to require that, 
if a licensee that chooses to satisfy its disclosure obligation via the 
Internet changes the material terms of a contest after the contest is 
first announced, the licensee announce on air that the contest rules 
have changed and direct participants to the Web site to review the 
changes. These proposals are intended to modernize the Contest Rule in 
a manner that gives broadcasters greater flexibility in the methods by 
which they satisfy their obligation to disclose material contest terms, 
while ensuring adequate notice of such terms to the public.
2. Legal Basis
    18. The proposed action is authorized pursuant to sections 4(i), 
4(j), and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 154(j), and 303.
3. Description and Estimates of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    19. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\19\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \20\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\21\ A small business concern is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\22\ The rules

[[Page 75777]]

proposed herein will directly affect small television and radio 
broadcast stations. Below, we provide a description of these small 
entities, as well as an estimate of the number of such small entities, 
where feasible.
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    \19\ 5 U.S.C. 603(b)(3).
    \20\ 5 U.S.C. 601(6).
    \21\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to 5 
U.S.C. 601(3), the statutory definition of a small business applies 
``unless an agency, after consultation with the Office of Advocacy 
of the Small Business Administration and after opportunity for 
public comment, establishes one or more definitions of such term 
which are appropriate to the activities of the agency and publishes 
such definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
    \22\ 15 U.S.C. 632. Application of the statutory criteria of 
dominance in its field of operation and independence are sometimes 
difficult to apply in the context of broadcast television. 
Accordingly, the Commission's statistical account of television 
stations may be over-inclusive.
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    20. Television Broadcasting. This economic Census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound.'' \23\ The SBA has created the following small 
business size standard for such businesses: those having $38.5 million 
or less in annual receipts.\24\ The 2007 U.S. Census indicates that 808 
firms in this category operated in that year. Of that number, 709 had 
annual receipts of $25,000,000 or less, and 99 had annual receipts of 
more than $25,000,000.\25\ Because the Census has no additional 
classifications that could serve as a basis for determining the number 
of stations whose receipts exceeded $38.5 million in that year, we 
conclude that the majority of television broadcast stations were small 
under the applicable SBA size standard.
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    \23\ U.S. Census Bureau, 2012 NAICS Definitions, ``515120 
Television Broadcasting,'' at http://www.census.gov./cgi-bin/sssd/
naics/naicsrch.
    \24\ 13 CFR 121.201; 2012 NAICS code 515120.
    \25\ U.S. Census Bureau, Table No. EC0751SSSZ4, Information: 
Subject Series--Establishment and Firm Size: Receipts Size of Firms 
for the United States: 2007 (515120), http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ4&prodType=table.
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    21. Apart from the U.S. Census, the Commission has estimated the 
number of licensed commercial television stations to be 1,387 
stations.\26\ Of this total, 1,221 stations (or about 88 percent) had 
revenues of $38.5 million or less, according to Commission staff review 
of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on 
July 2, 2014. In addition, the Commission has estimated the number of 
licensed noncommercial educational (NCE) television stations to be 
395.\27\ NCE stations are non-profit, and therefore considered to be 
small entities.\28\ Based on these data, we estimate that the majority 
of television broadcast stations are small entities.
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    \26\ See Broadcast Station Totals as of June 30, 2014, Press 
Release (MB rel. July 9, 2014) (Broadcast Station Totals) at https://apps.fcc.gov/edocs_public/attachmatch/DOC-328096A1.pdf.
    \27\ See Broadcast Station Totals, supra.
    \28\ See generally 5 U.S.C. 601(4), (6).
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    22. Class A TV and LPTV Stations. The same SBA definition that 
applies to television broadcast stations would apply to licensees of 
Class A television stations and low power television (LPTV) stations, 
as well as to potential licensees in these television services. As 
noted above, the SBA has created the following small business size 
standard for this category: Those having $38.5 million or less in 
annual receipts.\29\ The Commission has estimated the number of 
licensed Class A television stations to be 432.\30\ The Commission has 
also estimated the number of licensed LPTV stations to be 2,028.\31\ 
Given the nature of these services, we will presume that these 
licensees qualify as small entities under the SBA definition.
---------------------------------------------------------------------------

    \29\ 13 CFR 121.201; NAICS code 515120.
    \30\ See Broadcast Station Totals, supra.
    \31\ See Broadcast Station Totals, supra.
---------------------------------------------------------------------------

    23. We note, however, that in assessing whether a business concern 
qualifies as ``small'' under the above definition, business (control) 
affiliations \32\ must be included. Because we do not include or 
aggregate revenues from affiliated companies in determining whether an 
entity meets the revenue threshold noted above, our estimate of the 
number of small entities affected is likely overstated. In addition, we 
note that one element of the definition of ``small business'' is that 
an entity not be dominant in its field of operation. We are unable at 
this time to define or quantify the criteria that would establish 
whether a specific television broadcast station is dominant in its 
field of operation. Accordingly, our estimate of small television 
stations potentially affected by the proposed rules includes those that 
could be dominant in their field of operation. For this reason, such 
estimate likely is over-inclusive.
---------------------------------------------------------------------------

    \32\ ``[Business concerns] are affiliates of each other when one 
concern controls or has the power to control the other or a third 
party or parties controls or has the power to control both.'' 13 CFR 
21.103(a)(1).
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    24. Radio Stations. This economic Census category ``comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public.'' \33\ The SBA has created the following small 
business size standard for this category: Those having $38.5 million or 
less in annual receipts.\34\ Census data for 2007 shows that 2,926 
firms in this category operated in that year.\35\ Of this number, 2,877 
firms had annual receipts of less than $25,000,000, and 49 firms had 
annual receipts of $25,000,000 or more.\36\ Because the Census has no 
additional classifications that could serve as a basis for determining 
the number of stations whose receipts exceeded $38.5 million in that 
year, we conclude that the majority of television broadcast stations 
were small under the applicable SBA size standard.
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    \33\ U.S. Census Bureau, 2012 NAICS Definitions, ``515112 Radio 
Stations,'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. 
This category description continues, ``Programming may originate in 
their own studio, from an affiliated network, or from external 
sources.''
    \34\ 13 CFR 121.201; NAICS code 515112.
    \35\ U.S. Census Bureau, Table No. EC0751SSSZ4, Information: 
Subject Series--Establishment and Firm Size: Receipts Size of Firms 
for the United States: 2007 (515112), http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ4&prodType=table.
    \36\ Id.
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    25. Apart from the U.S. Census, the Commission has estimated the 
number of licensed commercial AM radio stations to be 4,553 stations 
and the number of commercial FM radio stations to be 6,622, for a total 
number of 11,175.\37\ Of this total, 9,898 stations (or about 90 
percent) had revenues of $38.5 million or less, according to Commission 
staff review of the BIA Kelsey Inc. Media Access Pro Television 
Database (BIA) on October 23, 2014. In addition, the Commission has 
estimated the number of licensed noncommercial educational (``NCE'') AM 
radio stations to be 168 stations and the number of noncommercial 
educational FM radio stations to be 4,082, for a total of 4,250.\38\ 
NCE stations are non-profit, and therefore considered to be small 
entities.\39\ Therefore, we estimate that the majority of radio 
broadcast stations are small entities.
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    \37\ See Broadcast Station Totals as of June 30, 2014, Press 
Release (MB rel. July 9, 2014) (Broadcast Station Totals) at https://apps.fcc.gov/edocs_public/attachmatch/DOC-328096A1.pdf. This 
document only indicates the total number of AM stations as 4,721. 
The breakdown between licensed AM commercial and noncommercial 
stations was obtained from Staff review of the Consolidated Database 
System (CDBS). See http://licensing.fcc.gov/prod/cdbs/pubacc/prod/cdbs_pa.htm.
    \38\ See Broadcast Station Totals, supra.
    \39\ See generally 5 U.S.C. 601(4), (6).
---------------------------------------------------------------------------

    26. Low Power FM Stations. The same SBA definition that applies to 
radio stations would apply to low power FM stations. As noted above, 
the SBA has created the following small business size standard for this 
category: Those having $38.5 million or less in annual receipts.\40\ 
The Commission has estimated the number of licensed low power FM 
stations to be 814.\41\ Given the nature of these services, we will 
presume that these licensees qualify as small entities under the SBA 
definition.
---------------------------------------------------------------------------

    \40\ See 13 CFR 121.201, NAICS Code 515112.
    \41\ See News Release, ``Broadcast Station Totals as of June 30, 
2012'' (rel. Jul. 19, 2012) (http://fjallfoss.fcc.gov/edocs_public/attachmatch/DOC-304594A1315231A1.pdf).
---------------------------------------------------------------------------

    27. We note again, however, that in assessing whether a business 
concern qualifies as ``small'' under the above definition, business 
(control) affiliations \42\ must be included. Because

[[Page 75778]]

we do not include or aggregate revenues from affiliated companies in 
determining whether an entity meets the applicable revenue threshold, 
our estimate of the number of small radio broadcast stations affected 
is likely overstated. In addition, as noted above, one element of the 
definition of ``small business'' is that an entity not be dominant in 
its field of operation. We are unable at this time to define or 
quantify the criteria that would establish whether a specific radio 
broadcast station is dominant in its field of operation. Accordingly, 
our estimate of small radio stations potentially affected by the 
proposed rules includes those that could be dominant in their field of 
operation. For this reason, such estimate likely is over-inclusive.
---------------------------------------------------------------------------

    \42\ ``[Business concerns] are affiliates of each other when one 
concern controls or has the power to control the other or a third 
party or parties controls or has the power to control both.'' 13 CFR 
21.103(a)(1).
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4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    28. In this section, we identify the reporting, recordkeeping, and 
other compliance requirements proposed in the NPRM and consider whether 
small entities are affected disproportionately by any such 
requirements.
    29. Reporting Requirements. The NPRM does not propose to adopt 
reporting requirements.
    30. Recordkeeping Requirements. The NPRM proposes certain 
recordkeeping requirements that would be applicable to covered small 
entities. In particular, the NPRM:
     Proposes to allow broadcast licensees to satisfy their 
obligation to disclose material contest terms by posting such terms on 
the station's Web site, the licensee's Web site, or, if neither the 
station nor the licensee has its own Web site, any publicly accessible 
Internet Web site;
     proposes that any material contest terms announced on air 
must not differ from the material terms disclosed on a Web site;
     proposes to require stations that choose to satisfy their 
disclosure obligations via an Internet Web site to broadcast the 
complete, direct Web site address where the contest terms are posted 
each time the station mentions or advertises a contest;
     proposes that, if a licensee that chooses to satisfy its 
disclosure obligations via an Internet Web site changes the material 
terms of a contest after the contest is first announced, such licensee 
be required to announce on air that the contest terms have changed and 
direct participants to the Web site to review the changes; and
     seeks comment on whether a licensee that chooses to 
satisfy its disclosure obligations via the Internet and that changes 
contest terms after a contest is first announced, must repeat that the 
contest terms have changed each time it announces the contest and 
broadcasts the Web site address where such terms are posted, and if so, 
how long that requirement should last.
    31. Other Compliance Requirements. The NPRM seeks comment on other 
compliance requirements that would be applicable to covered small 
entities. In particular, the NPRM:
     Seeks comment on whether and to what extent the Commission 
should adopt rules specifying the format for contest disclosures that 
are posted on Internet Web sites and how long stations should be 
required to maintain such disclosures on a Web site;
     seeks comment on whether licensees should be required to 
set apart or distinguish in some way contest terms deemed ``material'' 
from other contest information to ensure that important contest 
information is readily available to the public;
     seeks comment on whether to adopt requirements designed to 
ensure that the material terms of a contest are easy for consumers to 
locate on a public Web site;
     seeks comment on whether to require that a public Web site 
that is used to comply with the Contest Rule's disclosure requirements 
be accessible to the public 24/7 during the contest, for free, and 
without any registration requirement, and whether there are other 
characteristics that such Web sites should be required to possess;
     seeks comment on how licensees can anticipate and avoid 
problems associated with posting contest terms to non-licensee Web 
sites;
     seeks comment on whether there are any differences between 
radio and television licensees that merit different treatment in the 
rule; and
     seeks comment on whether, if broadcast disclosure is 
retained as one method of complying with the Contest Rule, any changes 
should be made to the rule to improve the effectiveness of broadcasting 
material contest terms.
    32. Because no commenter provided information specifically 
quantifying the costs and administrative burdens associated with the 
Petitioner's proposed rule revisions, we cannot precisely estimate the 
impact of the rules proposed in the NPRM on small entities. However, 
the proposed revisions will afford all licensees, including small 
broadcasters, greater flexibility in the method by which they comply 
with the Contest Rule. In addition, we note that the proposed revisions 
were derived largely from the Petition for Rulemaking in this 
proceeding, which was unopposed and supported by all commenters, 
including small broadcasters. Thus, we find it reasonable to conclude 
that any costs or burdens on small entities resulting from the proposed 
requirements will be outweighed by the benefits.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    33. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.\43\
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    \43\ 5 U.S.C. 603(c)(1) through (c)(4).
---------------------------------------------------------------------------

    34. The accompanying NPRM principally proposes to amend Sec.  
73.1216 of the Commission's rules by allowing all licensees, including 
small broadcasters, to meet their obligation to disclose material 
contest terms either through broadcast announcements or by making such 
terms available in writing on a publicly accessible Internet Web site. 
This revision to the rule is intended to give broadcasters greater 
flexibility in the manner by which they satisfy their obligation to 
disclose material contest terms, while ensuring adequate notice of such 
terms to the public. Whereas under the current rule, licensees must 
expend time and resources developing broadcast messages that adequately 
disclose important contest information, licensees will have the option 
to disclose such information through the Internet. Permitting 
disclosure through this additional method is potentially less costly 
and administratively burdensome for licensees, and will minimize the 
economic impact on small entities. One commenter has estimated, for 
example, that as much as two hours that are presently devoted by 
licensees to the production of contest-related broadcast spots will be 
spared. Moreover, the air time that is likely to be freed up as a 
result of more abbreviated contest-related announcements in some cases 
could be

[[Page 75779]]

used for advertising spots. As noted, the Petition for Rulemaking in 
this proceeding was uniformly supported by commenting parties, 
including small entities. Thus, we anticipate that the proposed rule 
revisions, if adopted, will only benefit small broadcast entities. 
Nevertheless, the NPRM seeks comment on the potential impact of its 
proposed rules on such entities.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    35. None.

B. Paperwork Reduction Act

    36. This document contains proposed new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995.\44\ In addition, pursuant to the Small Business 
Paperwork Relief Act of 2002,\45\ we seek specific comment on how we 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.'' \46\
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    \44\ Pub. L. 104-13.
    \45\ Pub. L. 107-198.
    \46\ 44 U.S.C. 3506(c)(4).
---------------------------------------------------------------------------

C. Ex Parte Rules

    37. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under Sec.  1.1206(b) of the Commission's 
rules.\47\ Ex parte presentations are permissible if disclosed in 
accordance with Commission rules, except during the Sunshine Agenda 
period when presentations, ex parte or otherwise, are generally 
prohibited. Persons making oral ex parte presentations are reminded 
that a memorandum summarizing a presentation must contain a summary of 
the substance of the presentation and not merely a listing of the 
subjects discussed. More than a one- or two-sentence description of the 
views and arguments presented is generally required.\48\ Additional 
rules pertaining to oral and written presentations are set forth in 
Sec.  1.1206(b).
---------------------------------------------------------------------------

    \47\ See 47 CFR 1.1206(b); see also id. 1.1202, 1.1203.
    \48\ See id. 1.1206(b)(2).
---------------------------------------------------------------------------

D. Filing Requirements

    38. Comments and Replies. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules,\49\ interested parties may file comments and 
reply comments on or before the dates indicated on the first page of 
this document. Comments may be filed using: (1) The Commission's 
Electronic Comment Filing System (``ECFS''), (2) the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies.\50\
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    \49\ See id. 1.415, 1.419.
    \50\ See Electronic Filing of Documents in Rulemaking 
Proceedings, Report and Order, 13 FCC Rcd 11322 (1998).
---------------------------------------------------------------------------

     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    39. Filings can be sent by hand or messenger delivery, by 
commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building. The filing 
hours are 8:00 a.m. to 7:00 p.m.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW., Washington, DC 20554.
    40. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 
20554. These documents will also be available via ECFS. Documents will 
be available electronically in ASCII, Microsoft Word, and/or Adobe 
Acrobat.
    41. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an email to [email protected] or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: http://www.fcc.gov.
    42. Additional Information. For additional information on this 
proceeding, contact Raelynn Remy of the Media Bureau, Policy Division, 
(202) 418-2936, [email protected].

V. Ordering Clauses

    43. Accordingly, it is ordered that pursuant to the authority 
contained in sections 4(i), 4(j) and 303 of the Communications Act of 
1934, as amended, 47 U.S.C. 154(i), 154(j), and 303, this Notice of 
Proposed Rulemaking is adopted.
    44. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Act Analysis, to the Chief Counsel for Advocacy 
of the Small Business Administration.

List of Subjects in 47 CFR Part 73

    Advertising, Consumer protection, Fraud, Television broadcasters.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 334, 336, 339.

0
2. Amend Sec.  73.1216 by revising Note 2 to read as follows:


Sec.  73.1216  Licensee-conducted contests.

* * * * *
    Note 2: In general, the time and manner of disclosure of the 
material terms of a contest are within the licensee's discretion. 
However, the obligation to disclose the material terms arises at the 
time the audience is first told how to enter or participate and 
continues thereafter. The disclosure of material terms shall be made by 
the station conducting the contest by either: (a) Periodic disclosures 
broadcast on the station; or (b) written disclosures on the

[[Page 75780]]

station's Internet Web site, the licensee's Web site, or if neither the 
individual station nor the licensee has its own Web site, any Internet 
Web site that is publicly accessible. In the former case, a reasonable 
number of periodic broadcast disclosures is sufficient. In the latter 
case, the station shall announce over the air the availability of 
material terms on the Web site and identify the complete, direct Web 
site address where the terms are posted each time the station mentions 
or advertises the contest. Material contest terms that are disclosed on 
an Internet Web site must conform in all substantive respects to those 
mentioned over the air. Any changes to the material terms during the 
course of the contest must be fully disclosed on air or the fact that 
such changes have been made must be announced on air and participants 
must be directed to the written disclosures on the Web site.
* * * * *
[FR Doc. 2014-29633 Filed 12-18-14; 8:45 am]
BILLING CODE 6712-01-P