advertising discrimination

Broadcasters are inevitably moving toward a digital future – exploiting new Internet and mobile platforms to supplement their traditional over-the-air operations.  Last week, I conducted two sessions in Salt Lake City for the Utah Broadcasters Association, one on the legal issues to be considered in connection with broadcasters’ use of the digital media, and a second updating broadcasters on all the legal and regulatory issues that they face from Washington with their over-the-air operations.  Slides from the digital media presentation, Broadcasters Online: Legal Issues in the Cyber Jungle, are available here, and those from the broadcast update, the Top Ten Washington Issues that Should Keep Broadcasters Awake at Night, are available here.

To show how quickly things move in Washington, since the seminar, there have been two new developments that relate to topics discussed at the seminar.  On the day of the seminar, the Commission’s Enforcement Bureau came out with a policy statement about a certification that broadcasters need to include in all of their advertising contracts certifying that the advertising was not sold with a discriminatory purpose – as there will be a specific question about the certification in all license renewal applications.  We have summarized the requirements for the clause to be included in the advertising contract here


Continue Reading Digital Media Issues and a Washington Update for Broadcasters – Presentations to the Utah Broadcasters

The FCC today released a Public Notice announcing new provisions in its license renewal Form 303S – the form that radio and television stations will be using to file license renewal applications, starting with license renewals for radio stations in DC, Virginia and West Virginia in June.  The Notice addressed several changes in the license renewal form – including the addition of certifications concerning whether a station was off the air at any point during the license term for a period of more than 30 days, whether principals of the licensee have interests in daily newspapers in the same area, and whether the station is in compliance with the RF radiation rules.  Two other issues of note were raised in the Public Notice – one dealing with stations that have not received a license renewal from the last license cycle, and one dealing with the newly required certification that stations must make – that their advertising contracts contain a nondiscrimination provision to assure that advertisers are not purchasing advertising on the station for a discriminatory purpose

We’ve written about the advertising anti-discrimination certification before, suggesting language that stations include in their contracts.  What is new in today’s notice is that the FCC has clarified that the certification only covers the period from today’s notice until the filing of the license renewal application.  So stations that do not have such certifications can still get them into their contracts now to avoid certification issues later.  In our previous articles on this subject, we’ve noted that this is a confusing requirement, and that even its supporters have urged the FCC to clarify it. Today’s Notice only says that stations must avoid advertising purchases made on the basis of "no urban, no Spanish" dictates, but does not go any further in interpreting the requirements of this policy. 


Continue Reading FCC Clarifies Requirement for Antidiscrimination Clause in Advertising Contracts – And Sets Out Other License Renewal Changes

The nuts and bolts of legal issues for broadcasters were highlighted in two sessions in which I participated at last week’s joint convention of the Oregon and Washington State Broadcasters Associations, held in Stephenson, Washington, on the Columbia River that divides the two states.  Initially, I conducted a seminar for broadcasters providing a refresher on their

Are you ready to file your next license renewal application?  It seems like the last license renewal cycle just ended (in fact, the last cycle is not over, as evidenced by the fact that the FCC in the last week has released several decisions dealing with late-filed renewals from the last cycle, and many TV stations still have license renewals that have not been granted due to pending indecency issues).  Nevertheless, a whole new cycle of Form 303 license renewal applications will soon be upon us – beginning in less than a year. The cycle begins with radio stations in Virginia, West Virginia, Maryland and the District of Columbia, who are due to file their license renewal applications on June 1, 2011.  Then, every two months thereafter, stations in another group of states files applications, until April 1, 2014 when radio stations in Pennsylvania and Delaware bring the radio renewal cycle to a close.  Television station renewal applications will be due on a state-by-state basis beginning one year later – starting with TVs in DC and the same three states in 2012.  A schedule for the radio renewal filings is available here.  With these deadlines almost upon us, what should stations be doing now to get ready? 

In the last renewal cycle, the biggest source of problems dealt with public file issues.  Remember, stations need to certify in their renewal applications that their public file is complete and accurate and, if it is not, to specify areas where there are deficiencies.  In the last cycle, many stations in particular had issues with Quarterly Programs Issues Lists that were missing from the files, in many cases incurring fines of $10,000 or more where there were many such reports missing from the files.  These reports are also very important, as they are the only required official records to demonstrate the programming that a station broadcast to serve the public interest needs of its service area.  If that service is ever challenged, you will need the reports to demonstrate how your station’s programming met the needs and interests of your city of license and the surrounding area.  Check out our last advisory on the Quarterly Programs Issues Lists, here.


Continue Reading FCC License Renewal Application Cycle Begins in Less Than A Year – What Stations Should Be Doing to Get Ready

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.


Continue Reading FCC Corrects Advertising Nondiscrimination Certification – Removes Gender From 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. 


Continue Reading Mini Cooper Ad Request Reminds Broadcasters of No Urban Dictate Certification

At its December meeting, at the same time as it adopted rules relaxing the newspaper-broadcast cross-ownership rules, the FCC adopted new rules to expand diversity in the ownership of broadcast stations, encouraging new entrants into such ownership.  The full text of that decision was just released last week, providing a number of specific rule changes adopted to promote diverse ownership, as well as a number of proposals for changes on which it requests further comment.  Comments on the proposed changes will be due 30 days after this order is published in the Federal Register.  As this proceeding involves extensive changes and proposals, we will cover it in two parts.  This post will focus on the rule changes that have already been made – a subsequent post will cover the proposed changes.  The new rules deal not only with ownership rule modifications, but also with issues of discrimination in the sale of broadcast stations and in the sale of advertising on broadcast stations, new rules that leave some important unanswered questions. 

The rules that the Commission adopted were for the benefit of "designated entities."  Essentially, to avoid constitutional issues of preferences based on race or gender, the definition of a designated entity adopted by the Commission is based on the size of the business, and not the characteristics of the owners.  A small business is one designated as such by the Small Business Administration classification system.  Essentially, a radio business is small if it had less than $6.5 million in revenue in the preceding year.  A television company is small if it had less than $13 million in revenues.  These tests take into account not only the revenue of the particular entity, but also entities that are under common control, and those of parent companies.  For FCC purposes, investment by larger companies in the proposed FCC licensee is permissible as long as the designated entity is in voting control of the proposed FCC licensee and meets one of three tests as to equity ownership: (1) the designated entity holds at least 30% of the equity of the proposed licensee, or (2) it holds at least 15% of the equity and no other person or entity holds more than 25%, or (3) in a public company, regardless of the equity ownership, the designated entity must be in voting control of the company.


Continue Reading FCC Takes Actions to Increase Diversity in Broadcast Ownership

As 2007 wound to an end, advertising issues figured prominently on the agenda of Washington agencies, including both the FCC and the FTC.  While the FCC is looking at specific regulatory requirements governing broadcast advertising, the FTC is investigating the privacy issues raised by advertising conducted by on-line companies.  In November, the FTC held a two day set of workshops and panels where interested parties discussed issues of behavioral advertising – advertising that can be targeted to individuals based on their history of Internet use, and whether or not regulation of these practices was necessary.  The wide-ranging discussion is summarized on our firm’s Privacy and Security Blog, here.  After gathering this testimony, we will see if the FTC decides to proceed to propose any regulations dealing with this sort of personalized, on-line advertising.

At the FCC, there are two separate proceedings dealing with advertising issues for broadcasters.  The first came about as part of the FCC’s diversity initiatives adopted at its December meeting.  There, the Commission determined that broadcasters will need to certify in their renewal applications that they have not discriminated in their advertising practices.  While this proposal was adopted at the Commission’s December 18 meeting, the full text of the decision has yet to be released, so we do not know the specifics of this new requirement.


Continue Reading Advertising Issues on Washington’s Agenda for 2008