Posted on February 11, 2011 by David Oxenford

FCC Underwriting Rules for Noncommercial Radio and TV - A Seminar on the Issues

Fines for noncommercial broadcasters who air acknowledgments of their donors and contributors that sound too much like commercials have been a problem area for many noncommercial educational radio and television stations, and have resulted in significant fines from the FCC.  The FCC allows "enhanced underwriting announcements" that identify a sponsor, what their business is, and where they are located, but such information must be provided in an objective, non-promotional manner.  Earlier this week, I conducted a seminar for noncommercial broadcast stations who are members of the Maine Association of Broadcasters and the Connecticut Broadcasters Association.  During the seminar, we discussed the FCC rules that govern fundraising done on such stations.  The PowerPoint slides from that presentation are available here, and provide an outline of the FCC rules on underwriting, promotions, fundraising and related issues, with samples of announcements that have led to FCC fines for noncommercial stations.

We have written many times about FCC issues related to fundraising and other matters relevant to  noncommercial stations.  We have written articles about cases where the FCC fined stations for enhanced underwriting announcements that were too enhanced, and violated FCC standards by containing prohibited calls to action, inducements to buy, price information or qualitative claims (see, for instance, articles here and here).  Another article discussed fines issued by the FCC for improper underwriting announcements where the announcements were of excessive length, and where the announcement ran in programming that was not originated by the station and from which the station received no consideration.  Another article discussed the FCC prohibition on noncommercial stations interrupting their regular programming to raise funds for charitable groups other than the licensee.  You can scroll though other articles we have written on other legal issues for noncommercial broadcasters by clicking here.  Watch our blog for other issues that relate to noncommercial broadcasters to stay up-to-date on the latest developments about which you should be aware. 

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Posted on June 17, 2010 by David Oxenford

Noncommercial FM Station Fined $12,500 for Sponsorship Acknowledgments That Were Too Commercial

Stations that are licensed as "noncommercial educational" stations are prohibited by the FCC from running commercials - seemingly a pretty straightforward prohibition.  Yet drawing the line between a prohibited commercial and a permissible sponsorship acknowledgment is sometimes difficult in these days of "enhanced underwriting."   In a recent case, the FCC fined a noncommercial radio station $12,500 for repeatedly airing 4 announcements from sponsors that the Commission found to have crossed the line by being overly promotional.  These announcements, which appear to have been recordings of unscripted sponsor acknowledgments, demonstrate how carefully noncommercial stations must police their sponsorship announcements to avoid risking an FCC sanction.

The announcements in these cases are worth reviewing. Some have subtle promotional messages, while the areas of concern are more clear in others.  But in reaching its decision, the Commission goes through a close analysis of the wording of each announcement to see if the announcement contains "comparative or qualitative descriptions, price information, calls to action, or inducements to buy, sell, rent or lease", all prohibited language in a noncommercial sponsorship identification.  So, when one of the announcement referred to "beautiful Harley Davidson light trucks" sold by a local auto dealer who sponsored the station, the FCC found that this was a qualitative claim that went over the line.  Similarly, statements that "we have it here" or "where we are proud to be Mexicans" (these announcements having been run on a Spanish-language station in California) were found to be attempts to qualitatively distinguish this dealer from others, or to be inducements to buy - a prohibited call to action.  And a specific statement that "no downpayment" would be required on a purchase constituted the kind of price information that should not be contained in a sponsorship acknowledgment.  Another announcement for a local tire store had similar problems in the content of the ads, using phrases such as stating that the company "knows about tires" and that the company's product "reduces [the] loss [of tire] pressure" and "has less risk of suffering damages . . . last longer and [is] not too expensive cause you to save more . . . [and] save more in gas per mileage."

As evidenced by this decision, noncommercial broadcasters need to concentrate on the facts when delivering a sponsorship acknowledgment.  A station can identify the sponsor and provide a non-promotional description of what business they are in, and provide contact or location information.  But they need to keep these product identification statements short and generic, and avoid all that stuff that sometimes makes commercials on commercial stations interesting - the music, the hype, the reason why one business is better or different from its competitors, and the real push to make the listener want to patronize the sponsor.  We've written about some other cases where underwriting acknowledgments have gone too far and prompted FCC fines, here and here.  There is a fine line between the permissible and the prohibited, but it is one that noncommercial stations must carefully walk to avoid FCC penalties. 
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