The FCC, apparently not in a holiday mood, yesterday released a Notice of Apparent Liability proposing a $13,376,200 fine against Sinclair Broadcast group for alleged violations of the sponsorship identification requirements of Section 317 of the Communications Act and Section 73.1212 of the FCC rules. The FCC alleges that program segments contained in news broadcasts of certain Sinclair stations and certain program-length reports featured stories about the Huntsman Cancer Institute which were not tagged as being sponsored – even though they were broadcast as part of a contract that required that Sinclair air advertising for the Institute and develop programming about the Institute’s activities.
While the amount of the fine is large given the thousands of alleged broadcasts missing the sponsorship tags, the Commission’s basis for the fines are not new. The FCC has previously fined stations for news segments that were sold as part of a commercial package and aired without sponsorship identification tags (see our article here.) Accepting any consideration, even video footage, from a commercial entity, can be seen by the FCC as consideration requiring sponsorship identification. See, for instance, our article here about one such case. The stand-alone programs that Sinclair argued were identified as having been sponsored were found wanting by the FCC as, while the fact that the programs were sponsored was made clear, the actual sponsor’s name was not explicitly stated in the announcement. The Commission rejected claims that the visual depiction of the Institute’s logo that was shown visually just before the sponsorship announcement, and a welcome from the announcer thanking the audience for joining in the broadcast “from the Huntsman Cancer Institute,” were sufficient to notify the audience as to the sponsor of the broadcast. As in cases we wrote about here and here, the FCC takes a hard line on these cases, requiring that the name of the sponsor, and the fact that they sponsored the programming be presented clearly so that any viewer will know who is sponsoring a broadcast program.
While the fine amount was increased due to a number of aggregating factors (including past violations of various rules by Sinclair, the number of violations, and the fact that Sinclair has substantial revenue and a fine, according to the FCC, to be meaningful, needs to be felt by the company being fined), this case sends a warning to all broadcasters that, if you are paid to say something, tell your audience that you received consideration, and who provided that consideration, or the FCC may well be coming your way. The Democratic Commissioners argued that the penalty should have been even harsher – so it is clear that no breaks will be given to those that the FCC believes have violated their sponsorship identification obligations.