Posted on June 10, 2010 by David Oxenford

So Just What is an "Issue Ad" and Why Should I Care?

In the last few weeks, I've been asked several times by broadcasters whether an ad should be considered an "issue ad."   Usually, the ad in question deals with some sort of faintly controversial issue, and the broadcaster seems torn about how to classify the ad.   In many ways, the answer is almost irrelevant as, other than some public file obligations, whether or not an ad is an issue ad has little practical significance.  Issue ads are not entitled to special rates - lowest unit rates are reserved for candidate ads.  They are not entitled to special placement in broadcast schedules.  As there is no Fairness Doctrine, there isn't even a requirement that you treat both sides of an issue in the same fashion (except perhaps, where a Fairness obligation may still arise if the issue being discussed is a candidate in an election, when the last remnant of Fairness, the Zapple Doctrine, has not officially been declared dead).  So why worry about whether or not something is an issue ad?

The principal reason is the public file. Commission rules require that the sponsor of an issue ad be identified in a broadcaster's public file, along with the sponsor's principal officers or directors.  This is required for any ad dealing with a controversial issue of public importance.  The ad does not need to deal with a political issue, or one to be considered by a government body.  Any controversial issue of public importance merits the public file treatment.  For ads dealing with a "federal issue", one to be considered by the US Congress, any Federal administrative agency or any other branch of the United States government, additional disclosures need to be made in the file (which we have listed before), setting out all the information that you would need to provide with respect to a candidate ad - including the price paid for the ad and the schedule on which the ad will run. 

It has been suggested to me that an issue ad needs to be identified so as to decide whether the ad needs to have a "paid for" or "sponsored by" tag at the end to identify its sponsor.  In fact, any ad where the sponsor of the ad is unclear - even a pure commercial ad needs to have a "paid for" or "sponsored  by tag."  For instance, a few years ago, a station was fined when a local chamber of commerce was buying time to promote all the businesses in its town, and the chamber was never identified in the ad - much less as the sponsor of that ad.  When the ad is for a product, and the maker of the product is that sponsor, the Commission considers the identification of the product to be sufficient sponsorship identification.  But where the actual sponsor is someone else, and it is not clear from the ad who the sponsor is, a broadcaster is required to identify that sponsor.

So, in considering whether a spot is an issue ad, why go through the trouble of worrying too much about it.  If it deals with something that looks controversial, err on the side of caution.  Consider it an issue ad, place notice in your public file, and go on with your business!
Tags: , , , , , , ,
Posted on May 3, 2009 by David Oxenford

Selling Stories In a Broadcast Station's News Programs - Remember the Sponsorship Identification

A recent stir was created when a Midwestern television company was reported to have signed a contract with a state government agency, promising to market the agency and its programs throughout the state.  This promotion was to include a segment in the company's televised news promoting the effects of the work of the agency.  Questions were immediately raised about whether this was prohibited by FCC rules.  But, when the news pieces ran, the company was very careful to state after these segments that they were sponsored by the station and the state agency.  As the FCC has no rules about what can be included in the "news" (and probably could not consistent with the First Amendment), the only real issue was one of sponsorship identification.  As the licensee did here, if the sponsor of the story is identified, making clear to the public who was attempting to persuade them on the issue addressed, there should be no FCC issues.

This is different from the issues that have arisen previously at the FCC, where there have been fines levied against television stations and cable systems for airing programming that was sponsored, but for which no sponsorship identification was provided (see our posts here and here).  This includes the video news release or VNR issues, where the FCC has fined stations for using news actualities provided by groups with a financial interest in the issue that was being addressed, but without identifying the fact that the material was provided by the interested parties.  Where a program addresses a controversial issue of public importance, the disclosure rules are more strict, requiring that the station not only disclose that it received money to air a story - but to also disclose anything that it got from the interested party - including tapes or scripts.

As we have written, the entire sponsorship identification field is under review in the Commission's proceeding which is to consider embedded advertising, product placement, and the whole gamut of broadcast sponsorship issues.  In that proceeding, the FCC made clear that broadcasters have an obligation to make sure that no one is receiving any undisclosed consideration for the placement of any type of promotion for a good or service into a program.  Broadcasters have this obligation, according the FCC, even if the program is being produced by a third party.  Thus, broadcasters should be asking for certifications from their program producers that they have not received anything of value in exchange for featuring a product or service or, if they have, that it is disclosed.  As we wrote last year, one television broadcaster was fined when an on-air host who produced his own show was found to have received consideration for the point of view that he expressed - something not revealed in his program, and something that the station did not inquire about.

Broadcasters, whether radio or TV, should use care when accepting anything of value in exchange for agreeing to broadcast any material on the air - whether it be music or news or any other type of programming.  We wrote about some of the considerations that stations should use in connection with payola concerns, which is really another aspect of the same issue.  With the FCC's scrutiny on this area, stations need to err on the side of caution, and be sure to identify sponsored programming whenever it appears. 
Tags: , , , , , , , ,
Posted on October 8, 2008 by David Oxenford

FCC Investigating TV Commentators Who Were Allegedly Paid to Present Views on Military Issues

According to numerous press articles, including this one in Multichannel News, the FCC has begun an investigation into several commentators on TV news programs to see if they were receiving payments or other consideration for presenting a particular viewpoint on military issues on which they were interviewed.  According to press reports, the FCC has sent letters requesting information about the arrangements to both television networks and the commentators themselves.  This investigation would appear to be a continuation of the FCC's concern about undisclosed sponsors of programming attempting to convince the public of a particular position on any controversial issue of public importance.

This investigation seems to be very similar to a case about which we wrote last year, where the FCC issued fines to a station group that aired programming that included commentator Armstrong Williams, who had been receiving consideration to speak in support of the No Child Left Behind program.  The FCC has also been looking at similar issues in its Sponsorship Identification and Embedded Advertising Proceeding, about which we wrote here.  In both of these proceedings, the FCC has warned broadcasters that they need to assess whether anyone who is supplying programming material to the station is receiving consideration for the views expressed on that programming, particularly where that programming involves something that could be considered a controversial issue of public importance.  Thus, stations should be asking networks, program syndicators, and others appearing on a program whether they are receiving any consideration for the views that they are about to express - particularly where that is not clear from the context of the program.  While the FCC has not explicitly so stated, it would seem like an interview of an author about his new book or an actor about his new movie would clearly imply that the author or actor received consideration.  But where someone is expressing an opinion on some matter where it is unclear that there is any commercial or financial interest, and such an interest does indeed exist, the station should be aware  of that interest and disclose that connection on-air.  See our discussion here for another case where the FCC imposed fines on a cable system for not disclosing such interests.  One more thing to worry about!

Tags: , , , , , ,
  • Email This
  • Print
  • Comments
  • Share Link
Posted on October 18, 2007 by David Silverman

FCC Proposes Fines for Political Sponsorship ID Violations

The FCC has taken the unusual step of issuing a Notice of Apparent Liability, i.e. an announcement that it has fined a broadcaster, against two TV station owners for failing to provide a sponsorship identification for political material sponsored by another Federal agency--the Department of Education ("DOE").  The proposed fines for these two broadcasters totaled over $70,000.  In connection with the same broadcasts, the Commission also issued a citation against the producer of the programs for failing to include a disclosure of the sponsor of the programs, warning that company that it would be fined if it were to engage in such activity in the future, even though the entity was not an FCC licensee.  These actions demonstrate the concern of the Commission over programs that attempt to influence the public, particularly those dealing with controversial issues of public importance, where those who have paid to do the convincing are not evident to the public.

These cases all stem from programs associated with conservative political commentator Armstrong Williams, who was paid by DOE to promote the controversial No Child Left Behind Act ("NCLBA") supported by the current administration.  He did so on two television programs:  his own show, titled "The Right Side with Armstrong Williams" and on "America's Black Forum," where he appeared as a guest.  These shows were aired by various television stations without any sponsorship identification to indicate that Williams was paid by DOE to promote NCLBA on the air.

In one case, the television broadcaster received $100 per broadcast for airing Right Side, but failed to reveal that it had received any consideration.  The broadcaster claimed that the consideration received was "nominal," which is generally an exception to the sponsorship ID requirement.  However, the FCC noted that the exception for "nominal" consideration applies only to "service or property" and not to "money," holding that receipt of any money, even if only a small sum, triggers the requirement for sponsorship identification.

In the other case, the broadcaster received no monetary consideration for airing an episode of America's Black Forum titled "2004 Election Countdown," in which Williams discussed NCLBA.  However, the Commission noted that this program contained discussion of a "controversial issue of public importance."  Because the videotape was provided to the station without charge, however, FCC rules require sponsorship identification, even if no monetary consideration is received. 

If "controversial issue of public importance" sounds familiar, that is the same type of programming subject to the FCC's former Fairness Doctrine, which required stations to air opposing viewpoints.  Although the Fairness Doctrine is no longer enforced by the FCC (but see here for a discussion of its possible return), programming aired on a station that discusses such issues are still subject to the sponsorship identification rules.  Although the FCC did not discuss it in this case, the same rule that triggers sponsorship identification requirements for programming addressing a controversial issue of public importance also triggers a requirement that the station include in its public file the name and address of the sponsoring organization and a list of its principal officers or directors.  For Federal issues, the Bipartisan Campaign Reform Act ("BCRA") also requires that stations place in their public files information as to the amounts paid to the station for any such programming (including advertising spots) and the schedule on which those spots will be run - essentially the same information as is provided for a spot purchased by a political candidate.

This decisions comes less than a month after the Commission's decision, about which we wrote here, to fine a cable operator for running Video News Releases without proper sponsorship identification.  The decisions show that the Commission is intent on enforcing sponsorship ID requirements for sponsored messages delivered in the form of news....even if the broadcaster or cable operator is not fully aware of the facts as to who was paying for their viewpoints to be put on the air.

Although the broadcasters in this most recent decision are likely to appeal the proposed fines levied by the FCC, the lessons to be learned include:  1) receipt of any money in exchange for airing programming, regardless of how small the sum, requires sponsorship identification; 2) the receipt of anything -even a tape or script - dealing with a controversial issue of public importance triggers the requirement for a sponsorship identification; and 3)  broadcasters and cable operators have an affirmative duty to conduct a good faith inquiry into any programming provided by third parties in which political matters are discussed to determine if the program provider received any consideration.  Although it may be difficult to determine whether a speaker's statement of a political viewpoint is due to the belief of the speaker or is the result of the speaker receiving compensation (especially if that position is also the speaker's belief), the FCC has made clear that any programming where the speaker is compensated for presenting his views should make the public aware of who is paying to have that viewpoint expressed. 

Tags: , , , , , , ,
  • Email This
  • Print
  • Comments
  • Share Link