Noncommercial broadcast stations are licensed to be just that – noncommercial. These stations can run “underwriting announcements” acknowledging commercial businesses that provide financial support to the stations, but such announcements must meet strict guidelines – including restrictions on “calls to action,” prohibitions on statements about prices or discounts, and requirements that no qualitative claim about the sponsor’s products or services can be made. From time to time, the FCC will fine or admonish noncommercial stations that run underwriting announcements that are too commercial. Yesterday, the FCC announced that its Enforcement Bureau had reached a Consent Decree (available here) with a noncommercial broadcaster who acknowledged having run underwriting announcements that had exceeded the bounds set by the rule. To settle the complaints about its announcements at stations in California and Arizona, the licensee agreed to pay the FCC a penalty of $115,000. According to the FCC Press Release on the matter, this was the highest penalty ever imposed on a noncommercial broadcaster for violations of the underwriting rules.
In addition to the fine, the licensee had to agree to a one-year moratorium on underwriting announcements from commercial entities. In addition, the licensee had to institute a compliance plan to educate its employees about the requirements of the FCC rules on underwriting, including a requirement that it create a training manual for use by its staff, and that it appoint a compliance officer to oversee compliance with the underwriting restrictions. For four years, the licensee needs to report to the FCC any instance where they violate the rules, and file a yearly report detailing their efforts to maintain compliance and certifying either that there have not been any violations of the rules or, if such a certification cannot be made, the details of any violations.
Just what did these announcements say? The FCC’s Public Notice sets out some examples:
These promotions ran afoul of the underwriting rules in various ways, by, for instance, including comparisons between an underwriter’s product or service to those of its competitors (“There are times that we fear going to see cars because we don’t know who to trust. You can trust the Bill Luke car dealership”); information on prices, savings, or value (“Additional holiday bonus savings on select models”); calls to consumers to take action (“Are you ready to buy a house? Want to know if you qualify?”); menu listing of products or services (“Cell phones from companies such as Verizon Wireless, Cricket, TMobile, Virgin Mobile, Trac-Fone”); and excessive length (between 30 and 60 seconds in duration).
The announcements that caused the problems thus ranged the gamut of ways to violate the Commission limitations on underwriting. In the laundry list of violations listed above, perhaps the most interesting was the one that talked about the “excessive length” of the spots. From time to time, the FCC has suggested that spots, even where not explicitly violating the restrictions imposed on underwriting ads could still be seen as too commercial because of length or other production values. While programmers probably hate to hear it, boring underwriting announcements that are short and to the point – thanking a donor and giving basic identifying information like their address or website URL and a very generic description of what the business does – are the safest. For more on other situations where the FCC has found underwriting announcements to go beyond the limits set by the FCC, see our articles here, here, here, here and here.
We also note the large amount of this fine from a supposedly deregulatory FCC. While the FCC notes that there were numerous violations, as we have written before in another context, just because the FCC is looking to loosen regulation generally does not mean that they will ignore the rules that remain on the books. This appears to be another example of a broadcaster being caught violating a clear FCC rule, and being penalized severely for that violation.