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The FCC has proposed levying a $13.3 million fine against Sinclair Broadcast Group for failing to disclose that certain broadcasts resembling independently generated news coverage were actually paid TV segments.  

The Commission said this is the largest fine it has ever proposed for a violation of its sponsorship identification rules.

The FCC was tipped off to the violation in April 2016 when it received an anonymous complaint saying Sinclair had broadcast programming about the Huntsman Cancer Institute during a news segment, but never disclosed that the Huntsman Cancer Foundation had paid for the airtime.

An investigation by the FCC’s Enforcement Bureau found that the broadcasting giant and the Foundation had signed a deal for Sinclair to produce and supply programming to both Sinclair and non-Sinclair TV stations that promoted the Foundation and Institute. These included 60- to 90-second sponsored stories, aired under the guise of independent news coverage, as well as 30-minute paid TV stories.

The Commission found this type of programming was broadcast more than 1,700 times.

By failing to disclose, the public may be misled into thinking the programming is independent news coverage or editorial content rather than a commercial program, according to the FCC. Identifying sponsorship is also vital to promoting fair and equitable competition among sponsors, the FCC said.

The FCC found Sinclair apparently failed to air an announcement indicating the program was paid for and who it was sponsored by, and likewise failed to report to non-Sinclair stations that the programming was paid for.

Sinclair responded Thursday to the FCC’s Notice of Apparent Liability, saying “Any absence of sponsorship identification in these public service segments was unintended and a result of simple human error.”

“After working to reach a reasonable settlement, we are disappointed by this NAL, which we believe is unreasonable, given the circumstances of our case and the absence of any viewer harm,” Sinclair said in a statement. “We disagree with the FCC's action and intend to contest this unwarranted fine.”

The FCC said it will review any written response and additional evidence that comes to light before deciding its next steps. For the Commission to execute a Forfeiture Order that imposes a fine or any settlement would require another vote.

This latest development could add fuel to critics of Sinclair’s proposed $3.9 billion acquisition of Tribune Media, who have argued the combined company would have too much power over television and would stifle local and independent media voices.

Earlier this month the FCC voted to open a review into the Commission’s national broadcast audience reach cap, which currently prevents a single TV broadcaster from owning stations that reach more than 39 percent of households.

If the Sinclair-Tribune deal went through, the company would own 233 stations and reach 72 percent of the country.  

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