Posted on March 29, 2010 by David Oxenford

FCC Corrects Advertising Nondiscrimination Certification - Removes Gender From Certification

In 2008, the FCC adopted a requirement that broadcast stations include in their advertising contracts a provision that says that advertisers will not discriminate on the basis of race or gender.  We wrote about that requirement here, and our post was greeted with significant surprise by many broadcasters as the requirement did not glean much publicity when it was first adopted.  Today, the FCC issued an Erratum to that two year old requirement, eliminating from the certification its application to discrimination in advertising based on gender.  Instead, the Erratum stated it was only discrimination based on race or ethnicity that was prohibited.  The Erratum stated that this language "more accurately" reflected the "Commission's clear intent" in adopting the requirement for the certification in advertising contracts.

The removal of "gender" from the advertising discrimination certification seems to recognize the common-sense advertising principal that some advertising, by its very nature, may be targeted to one gender or another.  But the correction of this language through an Erratum seems to avoid many of the hard issues that remain with this certification.  The Commission was very terse in its explanation of how this certification was supposed to work and exactly what it was supposed to prevent.  There were certain situations that seem to fit within the prohibitions - situations where the advertiser of a general market product refuses to allow it to be advertised on stations that target minority audiences (see our discussion of the Mini Cooper advertising controversy here).  This was to avoid the "no Spanish, no urban dictates", ruling out advertising on stations with urban formats or those programmed in Spanish, that some felt were attached to some advertising orders.  But there are many other questions that remain to be clarified.

For instance, while the Commission today seems to recognize that there are certain situations where it is appropriate to target the advertising of certain products to a specific gender, they fail to address whether it may also be appropriate to target advertising of certain products based on race or ethnicity.  In fact, many broadcast stations are now formatted to take advantage of that targeting - for instance Spanish language stations have one of the fastest growing advertising markets in the country, with advertising targeted to the audiences of those stations.  But what about the ad for a heavy metal band where the concert promoter specifically says that it wants the concert to be advertised only on a hard rock station, which may have a low minority audience.  Would that direction be judged discriminatory as the advertising order does target a specific audience that is largely not a "minority" audience?  Obviously, there may be heavy metal fans who also listen to Spanish language or urban stations, but you are more likely to have a higher concentration of fans on a hard rock station.  If that kind of targeting is acceptable (and it isn't it really the goal of having niche formatted radio stations to reach a particular demographic, and the goal of targeted advertising in other media, like the Internet, where advertisers seek to send their ads to consumers most likely to react to it?)?  When is targeted marketing acceptable and when is it not?  The Commission really needs to provide more guidance before the license renewal cycle starts next year, so that stations have the advice necessary to certify whether or not they are complying with this seemingly unclear rule.

On a more practical level, in 2008, we provided some suggested language for a certification for station's advertising contracts, as the FCC had not mandated any language - and in fact specifically declined to do so.  With the change in the FCC language in today's Erratum, we would suggest the following language:

This station does not discriminate in the sale of advertising time, and will accept no advertising which is placed with an intent to discriminate on the basis of race or ethnicity.  Advertiser hereby certifies that it is not buying broadcasting air time under this advertising sales contract for a discriminatory purpose, including but not limited to decisions not to place advertising on particular stations on the basis of race, national origin, or ancestry.

Industry organizations are supposed to get together to come up with an industry approved program to comply with this rule.  Until we get more guidance from these groups or the FCC, we guess that this language will have to do.
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Posted on August 24, 2009 by David Oxenford

Mini Cooper Ad Request Reminds Broadcasters of No Urban Dictate Certification

A request for advertising rates by an ad agency representing the Mini Cooper serves as a reminder to broadcasters of the recently-imposed obligation to insure that broadcast advertisers do not discriminate on the basis of race or gender.  As we wrote several months ago, the FCC has adopted a new requirement that a broadcaster certify at license renewal time that their advertising contracts require advertisers certify that they were not making advertising decisions based on the race or gender of the audience of the broadcast station.  This was to eliminate the "no urban/no Spanish" dictates that many felt were a discriminatory part of the advertising landscape.  As demonstrated by the controversy that erupted when this request for rates was circulated, stations need to insure that their contracts contain language prohibiting discrimination in advertising buys, as any such dictates will not be a secret.  And once they get out, if a station has run a campaign purchased by an advertiser who had included such dictates, the station running the campaign may have difficulty in making the required certification as the station knows that the actions of the advertiser contradict any certifications that the advertiser may have made in signing the station advertising contract containing the required certifications.

Our earlier post on the issue suggested some language to include in an advertising contract disclaimer, and also discussed the issue of the positive use of racial or gender advertising specifications for ads targeting minority and gender specific audiences.  But the issue in the Mini Cooper case makes clear that many in the advertising community, and probably many in the media community, do not know about the adoption of the FCC's policy, or the proposal to extend the policy to cable advertising.  It is also interesting to note that the FCC has refused to provide more specific guidance on this rule, not even specifying the language that should be used in contracts.  Nor has the new license renewal form containing the required certification that the broadcaster must make about his compliance with this rule been released, making it unclear if this form has even passed review by the Office of Management and Budget under the Paperwork Reduction Act. 

Nevertheless, it seems fairly clear that broadcasters will need to observe these requirements, as they will, at some point, need to certify that advertisers have not utilized the no Urban/no Spanish dictates.  One of the requests by parties complaining of the Mini Cooper order was that the FCC set up an officer to enforce this requirement.  Certainly, some more instruction on this new requirement will be necessary for mishaps like the Mini Cooper case to be avoided. 
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Posted on July 25, 2008 by David Oxenford

Comment Dates Set for Embedded Advertising and Sponsorship Identification Proceeding - While Coffee Cups on the Anchor Desk Put the Issue in the Headlines

The FCC's Notice of Inquiry and Notice of Proposed Rulemaking on Sponsorship Identification issues (which we summarized in our firm's advisory and about which we wrote here), which deals with a host of issues including embedded advertising and product placement, was published in the Federal Register late last week, starting the clock on the filing of comments.  Comments on this wide-ranging proceeding are due on September 22, and replies on October 22.  With the broad range of issues that are discussed in this proceeding, from proposed rules on the size and length of textual sponsorship identifications in television advertising to sponsorship identification requirements for live-read radio commercials, there is something on which almost every broadcaster will want to comment.

A recent New York Times article helped bring the proceeding to the attention of the general public.  The article writes about television stations which are paid to have morning show hosts place coffee cups with identifiable logos (in this case cups of McDonalds coffee) on the desk of the news anchors of a morning news program.  Under some of the proposals identified in the Notice of Inquiry in this proceeding, some sort of identification (perhaps a crawl or superimposed message) of the sponsor for the placement of those cups would be required concurrently with the visual images of the cups on the screen.  The same would be true of the appearance of a product in any scripted comedy or drama, and perhaps even when feature films are run on TV in which the filmmaker was paid to include specific products in the movie.   Adoption of any of these suggestions could certainly change to face of broadcast television, particularly as it adapts its advertising practices to deal with Digital Video Recorders and other technological advances.  For broadcasters to retain their flexibility in such matters, they should file comments on or before the September 22 filing deadline. 

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Posted on September 5, 2007 by David Oxenford

Plan Your Inadvertent Errors Carefully - A Fine for Children's Television Violations May be at Stake

On Friday, the FCC showed released two decisions – both dealing with a handful of inadvertent violations of the Commission’s rules on advertising directed to children. In one case, a licensee admitted in its license renewal application 4 violations of the rules and was fined $8,000. In another, the licensee admitted 8 violations, received no fine at all, instead being only admonished for its errors. Why the difference?

The FCC justified the difference in treatment based on the nature of the violations.  In reality, the station that did not receive any fine actually broadcast more commercial material in excess of the limits on the amount of advertising permitted in children's program than did the station that was fined. The reason – “program length commercials.” These are instances where, in a commercial message, a character from the surrounding program appears. In that situation, the FCC considers the entire program as a commercial, and thus the violation is considered much more serious than a mere overage in the time limits on commercial material in children’s programs. The station that received the fine had 3 program length commercials, while the station that was not fined simply ran more commercial matter than permitted by the rules – and did not have any program length commercials. But are these distinctions really justified?

In some instances, where commercials feature a character from the surrounding program, the Commission fears that the children in the audience will not be able to the differentiate between the commercial message and the program.  In some cases, this fear may well be justified. But at least in one instance in the recent case, this connection is hard to fathom.  The ad in question was for an electronic game and featured one character from the program – but only a partial view for one second, hardly enough time to notice much less to create the confusion with the program matter.

Other than that, the fined station had two other program length commercials  and one other violation in the eight year renewal period – while the station that was not fined had 8 violation – which the FCC determined were “de minimis,” or essentially insignificant. All of those violations were equally the result of human error which, as the FCC seems to have recognized in one case but not the other, can be expected.  So human error is permitted in one instance but not the other.

Thus, the lesson to be learned from these cases seems to be that if you inadvertently make an error, make sure that you err on the length of the commercials that you run, not on a program length commercial. So plan your inadvertent errors carefully.
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