Payola and Sponsorship Identification

It’s a new year, and it’s time to look ahead at what Washington may have in store for broadcasters this year.  The FCC may be slow to tackle some of the big issues on its agenda (like the completion of 2018 Quadrennial Review or any other significant partisan issue) as it still has only four Commissioners – two Democrats and two Republicans.  On controversial issues like changes to the ownership rules, there tends to be a partisan divide.  As the nomination of Gigi Sohn expired at the end of the last Congress in December, the Biden administration was faced with the question of whether to renominate her and hope that the confirmation process moves more quickly this time, or to come up with a new nominee whose credentials will be reviewed by the Senate.  It was announced this week that the administration has decided to renominate her, meaning that her confirmation process will begin anew.  How long that process takes and when the fifth commissioner is seated may well set the tone for what actions the FCC takes in broadcast regulation this year.

Perhaps the most significant issue at the FCC facing broadcasters is the resolution of the 2018 Quadrennial Review to assess the current local ownership rules and determine if they are still in the public interest.  As we wrote last week, the FCC has already started the 2022 review, as required by Congress, even though it has not resolved the issues raised in the 2018 review.  For the radio industry, those issues include the potential relaxation of the local radio ownership rules.  As we have written, some broadcasters and the NAB have pushed the FCC to recognize that the radio industry has significantly changed since the ownership limits were adopted in the Telecommunications Act of 1996, and local radio operators need a bigger platform from which to compete with the new digital companies that compete for audience and advertising in local markets.  Other companies have been reluctant to endorse changes – but even many of them recognize that relief from the ownership limits on AM stations would be appropriate.

Continue Reading Looking Into the Crystal Ball – What’s Coming in Broadcast Regulation in 2023 From the FCC

The new year brings a series of regulatory deadlines in January and a February 1 license renewal deadline that broadcasters should take note of.  As in 2022, the FCC will remain vigilant in making sure that its deadlines are met, so the following items should not be overlooked or left until the last minute.

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Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • By a Public Notice issued on December 15, the FCC’s Public Safety and Homeland Security Bureau told broadcasters to submit

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC has sent an e-mail, apparently to all broadcasters, regarding the cybersecurity of broadcast stations that use the DASDEC

All media companies, including broadcasters, webcasters, podcasters and others, need to consider carefully their advertising production after the big penalties imposed on Google and iHeart for broadcast commercials where local DJs promoted the Pixel 4 phone.  Promotions included statements that clearly implied that the announcers had used the phone, including statements that it was “my favorite camera” and “I’ve been taking studio-like photos” with the phone.  But, according to the announcements of the settlement with the Federal Trade Commission and seven state attorneys general (see the FTC press release and blog article), the announcers had not in fact used the phone.  Google will pay the states penalties  of $9 million, and iHeart will pay about $400,000 (see example of the state Court filings on the settlement, this one for Massachusetts, for Google and iHeart).  Each will enter into consent orders with the FTC (Google order here and iHeart here) requiring 10-year recordkeeping and compliance plans to train employees, maintain records of advertising with endorsements, and reports to be filed periodically with the FTC.

The mission of the FTC is to protect the public from deceptive or unfair business practices and from unfair methods of competition.  In that role, the FTC regulates deceptive advertising practices.  Over a decade ago, we highlighted the FTC’s update of its policies on “testimonial and endorsement advertising” that made clear that the FTC required that any sort of “celebrity” (interpreted broadly) endorser had to have a basis for the claims that they were making in their pitches for a product.  This notice also made clear that any statements made about the experience in using a product had to be accurate and, when making claims about the performance of a product, the endorser had to accurately state performance that users can expect to obtain when they use the product.  Just using a “your results may vary” disclaimer was not enough.  In the 2009 proceeding, the FTC emphasized the applicability of these standards to online promotions, requiring disclosures for not only traditional advertising but also for social media influencers and others who are paid to promote products through online channels.  Such payments (or any other valuable consideration the influencer receives) must be disclosed when pitching a product.
Continue Reading Big FTC Penalties on Google and iHeart for Deceptive Endorsements in Broadcast Commercials Mandate Care in Crafting Your Local Advertising

In a very busy week, here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Federal Trade Commission and seven state Attorneys General announced a settlement with Google LLC and iHeart Media, Inc. over allegations that iHeart radio stations aired thousands of deceptive endorsements for Google Pixel 4 phones by radio personalities who had never used the phone.  The FTC’s complaint alleges that in 2019, Google hired iHeart and 11 other radio broadcast companies to have their on-air personalities record and broadcast endorsements of the Pixel 4 phone, but did not provide the on-air personalities with the phone that they were endorsing.  Google provided scripts for the on-air personalities to record, which included lines such as “It’s my favorite phone camera out there” and “I’ve been taking studio-like photos of everything,” despite these DJs never having used the phone.  The deceptive endorsements aired over 28,000 times across ten major markets from October 2019 to March 2020.  As part of the settlement, subject to approval by the courts, Google will pay approximately $9 million and iHeart will pay approximately $400,000 to the states that were part of the agreement.  The settlement also imposes substantial paperwork and administrative burdens by requiring both companies to submit annual compliance reports for a period of years (10 years in the case of iHeart), and create and retain financial and other records (in the case of iHeart, the records must be created for a period of ten years and retained for five years).
    • This case is a reminder that stations must ensure that their on-air talent have at least some familiarity with any product they endorse, particularly where on-air scripts suggest that they have actually used the product.  Stations should not assume that talent know the relevant rules – they more likely will just read whatever is handed to them without understanding the potential legal risk for the station, which, as demonstrated in this case, could be significant.


Continue Reading This Week in Regulation for Broadcasters: November 26 to December 2 , 2022

In speaking to many broadcast groups around the country in the last few months, I have found that many broadcasters are totally confused by the FCC’s rules requiring that they seek certifications from anyone buying programming time on their stations (or providing programming for free in exchange for that programming being broadcast on the station).  These certifications must indicate that the programmer  is not a “foreign government entity,” a term that includes any foreign government or foreign-government owned entity, an agent of a foreign government, or someone who has been paid by a foreign government to produce the program.  As we noted (see our articles here and here), the rules requiring these certifications went into effect on March 15, 2022 for any new agreements effective after that date, and September 15, 2022 for obtaining certifications from programmers who were already on the air as of March 15.  Now, the FCC has asked in a Second Notice of Proposed Rulemaking whether it should expand these obligations to identify foreign government-backed programming.  In addition, a bill has been introduced in Congress that would authorize the FCC to impose the obligation it attempted to impose on broadcasters initially – that they check databases maintained by the Department of Justice (the Foreign Agents Registration Act database) and by the FCC to confirm the accuracy of the certifications obtained from programmers as to whether or not they are agents of foreign governments (see our article here on the Court decision rejecting the requirement that broadcasters check these databases).

When I am speaking at broadcast association meetings across the country, I am almost always asked why the FCC is seeking this information.  The FCC decided that it had to act in this area when, in a couple of high-profile cases in major markets, program time was being purchased by entities that represent foreign governments – with Russian and Chinese news and information programming being of the most concern.  When these instances were highlighted by other US government agencies and through political complaints, the FCC felt that it had to act.  I don’t think that many broadcasters would have concerns if the rules were limited to situations where a foreign government is in fact buying program time or doing a time brokerage agreement, with the intent of airing its slanted news to US citizens, with such programming being required to be identified to the public as being sponsored by an entity related to a foreign government.  But the concern that many have raised is that the FCC’s requirements impose significant burdens on broadcasters and programmers even in instances where there is no doubt that companies buying time on broadcast stations are not posing any threat to US interests.
Continue Reading FCC Seeks Comments on Tighter Requirements for Broadcasters to Identify Foreign Government Sponsored Programming – And A Bill Introduced in Congress – What Does It Mean for Broadcasters? 

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • On October 17, Sen. Brian Schatz (D-HI), Sen. Marsha Blackburn (R-TN), and Rep. Anna Eshoo (D-CA) introduced the Identifying Propaganda

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

With so much focus on the upcoming regulatory fee deadline, broadcasters may well overlook another more imminent deadline – Thursday, September 15 is the deadline for broadcasters to have assured themselves that no buyer of program time on their stations is a foreign government or an agent of a foreign government.  As we wrote here, the NAB successfully obtained a court decision eliminating the obligation for broadcasters to verify that no buyer of program time is listed in the Department of Justice’s Foreign Agents Registration Act database or on the FCC’s database of foreign government video programmers.  However, the underlying obligation of licensees to obtain certifications from buyers of program time on their stations confirming that they are not a foreign government, or an agent of a foreign government, remains in place.

New agreements for the sale of program time should have, since March 15, contained representations from the program buyer that they are not a foreign government or a representative of a foreign government, and that no foreign government has paid the programmer to produce the programs or to place it on broadcast stations.  Programming provided to the station for free with the expectation that it will be broadcast should also be confirmed as not coming from a foreign government or an agent of a foreign government.  By this Thursday (September 15), stations need to verify that the providers of programming under agreements that were in existence before March 15 are not foreign governments or their agents.
Continue Reading Don’t Forget September 15 Deadline For Broadcasters to Assure That Buyers of Program Time Are Not Foreign Governments or Their Agents