Last week, the FCC reached a consent decree with a noncommercial broadcaster, where the broadcaster paid an $8000 penalty for, among other things, running underwriting spots that were too promotional. While the consent decree and its implementing order provide no details on the underwriting violations by the broadcaster, we can assume that the broadcaster ran spots that somehow crossed the line – giving price information about a sponsor’s products, or including a call to action suggesting that listeners somehow patronize the sponsor, or making qualitative claims about the sponsor or its products or services. We have written about similar violations many times (see, for instance, our articles here, here, here, here and here) and I have conducted seminars for numerous noncommercial broadcasting organizations talking about specifics as to what is permitted in underwriting acknowledgements and what will get a noncommercial station into trouble (see for instance, the presentations mentioned here and here). Obviously, it is important that noncommercial stations pay attention to these restrictions. But, last week, I received a question that indicated that not all noncommercial stations realize that, while their ability to promote a commercial enterprise is limited, these same restrictions do not apply to on-air spots for other nonprofit organizations.

About 35 years ago, Congress changed the provisions of the Communications Act to redefine what a noncommercial station can and cannot do. Noncommercial stations obviously cannot run commercials. But the language of the statute makes clear that commercials are promotional announcements for profit businesses. In looking at that statutory change, after much discussion, the FCC concluded that the restrictions on underwriting announcements that apply to these noncommercial businesses do not apply to promotional announcements for nonprofit entities.

So, noncommercial stations do not violate the FCC’s underwriting rules if they run a promotional announcement for a local school’s drama department’s production of some Broadway show, and the stations can even provide the ticket prices and urge listeners to attend. The underwriting broadcast on a noncommercial station can say that the local church sells the best cherry pie (making a qualitative claim that they cannot make for a for-profit underwriter) when suggesting that listeners visit the church’s bake sale. Or they can tell people to contribute to the American Cancer Institute or the Red Cross, even if these nonprofit entities have paid for the announcements being run on the station.

As recently made clear, this treatment applies only to spot announcements for these organizations. Paying for programming time where the payment exceeds the noncommercial station’s costs of operating are probably against the FCC’s rules (see our article here). And on-air fundraisers that interrupt the station’s normal programming to raise funds for nonprofit groups other than the station itself are restricted in amount and require disclosures, even under the FCC’s new liberalized policy on such activities (see our articles here and here).

But these spot promotional announcements for nonprofit organizations as part of a noncommercial station’s regular programming are permitted. Obviously, as with any legal issue, talk to your legal counsel for details of these rules, as specific spots may give rise to specific concerns. Particularly problematic, for instance, are spots for events that have both commercial and noncommercial aspects or sponsors – where this relaxed regulatory treatment probably does not apply.

But with students coming back to school, and noncommercial stations across the country gearing up for the busy Fall season, this opportunity to raise underwriting funds to support station operations, while also affirmatively promoting other nonprofits in your community, should not be overlooked.