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On December 1, 2009,  FTC revised Guidelines went into effect updating policies dealing with advertising using testimonials and endorsements, specifically affecting celebrity endorsements and sponsorship disclosure.  These revised guidelines directly impact the established practices of broadcasters and new media companies.  These revised endorsement and testimonial guidelines effectively ban the old standard “results not typical” disclaimer so commonly in use in connection with a great deal of testimonial advertising, confirm independent liability for the “endorser” (including celebrities) for false product or service claims, and expand and clarify the need for disclosure of “material connections”, that is consideration (money and other “freebies”) received by new media companies in connection with reviews or other online coverage of products or services.  It is vital that media companies, in particular new media, understand the key provisions of these guidelines to make sure that they don’t become a target of any FTC enforcement action.  The FTC has indicated that for now at least, its focus will be on enforcement in the new media world (bloggers, social media, viral campaigns) and other “non-traditional” advertising (celebrity guests on news and entertainment shows, endorsements by media personnel such as on-air DJ’s).

Like all FTC Guidance concerning advertising, the revised guidelines are specific regulations, but instead they set out standards (in essence a safe harbor) that outline how the FTC will review advertising to determine if it is “false and deceptive” or otherwise misleading to the consumer in violation of Section 5 of the FTC Act.  The revised guidelines provide specific examples as to how they will apply to insure sufficient disclosure so that the listener has all the background necessary to be able to evaluate the strength of the endorsement for him or herself.  For broadcast advertising, the new guidelines make clear that endorsers can themselves be liable for misleading statements made during a product pitch.  So a radio announcer paid to try a diet plan or some other product and to report about its results on the air needs to be sure not only that his statements are truthful, but that the “results” claimed are in line with what the advertiser can actually prove for the product through clinical study and research.  The radio pitchman cannot turn a blind eye to claims that are inherently incredible.  In the past, a simple disclosure that "your results may vary" or "these results are not necessarily typical" was sufficient.  Today, that disclaimer is no longer enough.  Instead, the new guidelines state that any testimonial about the results of using a product be accompanied with a disclosure of the results that a typical user can expect to get from the product.  So the announcer must be informed as to what results can be expected by the typical user, and that these results are objectively verifiable, so that the proper disclosure can be made.  As the announcer (or the station) can now be liable for statements made in such testimonials, stations should take care to be prepared to make the required disclosures. Continue Reading New FTC Guidelines on Endorsements and Sponsorship Disclosure – Broadcasters and New Media Companies Beware

Only a day after asking over-the-air television broadcasters to justify their existence and why some or all of their spectrum should not be reclaimed by the FCC to be used for wireless broadband (and giving interested parties only until December 21 to not only justify their existence, but also to come up with technical means by which the spectrum could be more efficiently used, business plans for their future use of the spectrum, and a survey of the competing needs for that spectrum – see more detail below), the FCC issued another request for comments, asking how current video devices could be made more accommodating to Internet video.  These comments, also due on December 21, seemingly bring consumer electronics manufacturers and multi-channel video providers into the FCC’s rapidly-expanding evaluation of the video industry and its future.  As the comments filed in connection with these two requests will no doubt lead to proposals to be included in the FCC’s February report to Congress on strategies for broadband deployment, these quickly prepared filings could help determine the future of the video industry for the foreseeable future.

The new proceeding, looking for a "plug and play" model of consumer video devices that can access conventional television delivery systems and the Internet, starts with the statement that Internet video is "tremendously popular" and a prediction that, as it expands, new applications for such video will be found.  The Commission says that it sees Internet video as one way of spurring broadband adoption.  How to best promote the plug and play model for consumer video devices that can access the Internet is the crux of the comments that the FCC seeks.  The Commission first asks whether there are currently video devices that allow televisions to view not only the programming provided by multichannel video providers (e.g. cable and satellite), but also Internet video that may be available through an Internet service provided by that same MVPD, stating that it was not aware of such devices.  Next, the Commission asks what would be necessary to develop such devices, and what rules the Commission could adopt to possibly require capabilities in set top boxes and other devices to provide this universal access to video programming of all sorts.  The third area of inquiry from the Commission asks about standards that could be adopted to make Internet video and video from other sources interact with all other home audio and video equipment, including DVRs, to bring about the "digital living room."  And finally the Commission asks what stands in the way of plug and play devices that will work with all networks by which video is delivered.Continue Reading In Less Than 3 Weeks, Let’s Provide Detailed Analysis on Fundamentally Changing the Television Industry – Comments Sought on Encouraging Internet Video in Addition to Repurposing TV Spectrum

At more and more broadcast conventions, station owners have been asking questions about their legal liability for the use of social media.  What is their liability for the use of Facebook, Twitter, MySpace or other services?  Could owners have liability if their station maintains its own page on which friends and followers may post statements which are defamatory or which could otherwise give rise to…

DWT attorneys David Oxenford and Ronnie London both spoke at the Future of Television – East Conference held in New York City on November 18-19, 2009. Dave delivered introductory remarks to the Conference, and participated with Shelly Palmer, Host of MediaBytes, in a discussion "What’s the Industry Buzz.". Dave discussed the…

The Commission is worried about the future of the broadcast media, and they are trying to figure out what they can do.  The last two weeks have been full of news about actions being taken by the FCC which may or may not lead to a reshaping of broadcasting as we know it.  We wrote about the discussion of re-purposing some or all of the television spectrum for wireless broadband users.  We also told you about the workshops to be held this week as the first step in the Commission’s Quadrennial review of it multiple ownership rules – looking at whether to allow more media consolidation to help broadcasters compete in the new media landscape or, conversely, whether there should be a reexamination of the existing rules to make them more restrictive against big media.  Last week, the Commission announced two more actions – the appointment of a Senior Advisor to FCC Chairman Julius Genachowski to study "the future of media in a changing technological landscape", and a workshop on "Capitalization Strategies for Small and Disadvantaged Businesses."  What is the impact of all of these actions?

The appointment of the Senior Advisor, Steven Waldman, is perhaps the most interesting action.  Mr. Waldman, the founder of the website Belief.net (recently sold to News Corp), is charged with determining how the FCC can assure that the media will serve the public interest in the 21st century, and that "all Americans receive the information, educational content, and news they seek."  He is instructed to work with all Bureaus to determine how best to implement these ambitious goals.  It is interesting that, while one might be inclined to look at this with the assumption that his charge is to look at broadcasting, the public notice announcing his appointment and his charge does not once use the word "broadcast" or "broadcasting."  Instead, it talks almost exclusively about the new media and technology and the potential that they have for serving the public good.Continue Reading FCC Senior Advisor to Chairman to Study Media Change and a Workshop on Media Financing for Small Business – Looking to Reinvent the Broadcast Industry?

On Friday, the Commission formally began a rule making proceeding regarding children and electronic media.  Aware of the vast opportunities, but also the potential risks inherent in today’s (and tomorrow’s) electronic media, the Commission is seeking to gather information about the extent to which children are using media today, the benefits and risks of the various…

In the next few days, concerns about the protection of children from indecency and violence could lead to a report from the FCC to Congress urging use of the V Chip and other parental controls in devices other than television sets.  Remarks several weeks ago by FCC Chair Julius Genachowski suggesting that the FCC might want to look at content regulation beyond the broadcast medium, a view reiterated in an interview yesterday in TV NewsCheck, also suggest that  concerns about the exposure of children to indecency and other troubling programming on cable, online and by wireless devices may lead the FCC into unprecedented extensions of its regulation of entertainment content beyond the broadcast media.  An article today from Bloomberg News confirms that the FCC will be starting an inquiry to see if the television program ratings should be extended to cable and wireless entertainment services.  This extension of Federal regulation to protect children is occurring at the same time that similar concerns are being expressed by state legislatures, including the adoption of a recent law in Maine that effectively prohibits direct marketing to minors.

The report due this week follows a Notice of Inquiry issued by the Commission in March, as required by the Child Safe Viewing Act, legislation passed by Congress.  The law required that the FCC solicit public comment on "advanced blocking technology", the next generation of the V Chip, to see if these technologies can and should be extended to video programming other than broadcast television, including online communications, wireless communications (including video delivered to mobile  devices), DVRs and other video recorders, DVD players, and cable television.  The FCC Notice also asked why the current V Chip has seemingly not been used much by parents.  The FCC even asks if rules should be extended to video games – which were not specifically named in the legislation.  This would seemingly extend the FCC’s jurisdiction far beyond its current limits.  The FCC’s report is due by August 29. Continue Reading Protection of Children Prompts Potential FCC Regulation of Internet and Wireless Video Programming and Enhanced State Privacy Rules

The question of when a digital music service is “interactive” and therefore requires direct negotiations with a copyright holder in order to secure permission to use a sound recording is a difficult one that has been debated since the Digital Millennium Copyright Act was adopted in 1998. In a decision of the Second Circuit Court of Appeals released today, upholding a jury decision in 2007, the Court concluded that Yahoo’s Launchcast service (now operated by CBS) is not so “interactive” as to take it outside of the statutory royalty despite the fact that the service does customize its music offerings to the tastes of individual listeners. To reach its decision, the Court went through an extensive analysis of both the history of the sound recording copyright and of the details of the criteria used by Launchcast to select music for a stream sent to a specific user. By determining that the service is not interactive, the service need only pay the SoundExchange statutory royalty to secure permission to use all legally recorded and publicly released music.  Had the service been found to be interactive within the meaning of the statute, the service would have to negotiate with each sound recording copyright holder for each and every song that it wanted to use on its service to get specific rights to use each song – potentially resulting in hundreds of negotiations and undoubtedly higher fees than those paid under the statutory license.

The issue in the case turned on an analysis of the DMCA’s definition of an interactive service.  The statute defines an interactive service as one where a user can select a specific song or “receive a transmission of a program specially created for the recipient.” It is clear that Launchcast did not allow a user to request and hear a specific song.  But, by specifying a genre of music, and by specifying favorite artists and songs and rating other songs played by the service, a listener could influence the music that was provided to it.  Was this ability to influence the music sufficient to make it an “interactive service” and thus take it out of the coverage of the statutory royalty?Continue Reading Court of Appeals Determines that Launchcast is Not an Interactive Service – Thus Not Needing Direct Licenses From the Record Labels

The Advertising industry recently published self-regulation guidelines for "behavioral advertising," i.e. advertising that is targeted to the user based upon data regarding that user’s activities across various Web sites.  The Federal Trade Commission has been urging the industry to develop such standards for some time.  These practices have also attracted considerable attention on Capitol Hill.  To…

As you may have heard, Facebook is going to allow users to register names in their Facebook URL, replacing the former random ID numbers.  This policy, announced in a Facebook blog post earlier this week will become effective on a first come, first served basis beginning Saturday, June 13 at 12:01 am.  This new policy creates the danger that Facebook users may try to register as their user name words or phrases that could infringe on a company name, trademarked slogan, or even a broadcast station’s call signs.  To prevent others from using your company’s name, call sign or other trademark, Facebook has created a form allowing rights holders to register their marks ahead of time.  To protect your intellectual property in the easiest manner possible (without the need for costly infringement lawsuits of other actions), companies should take advantage of the procedures outlined by Facebook itself, and register with the company.

A couple of caveats:  

  1. User names have to be at least five alphanumeric characters.  This means that four letter call signs cannot be used as user names unless used with a suffix or frequency.  Since periods are the only punctuation allowed, acceptable user names might be WXYZ.FM, or FM98.1, for example. 
  2. In order to prevent someone from using your trademark in advance, it appears that it must be a registered mark.  However, a separate form appears to allow intellectual property rights holders to reclaim a user name, even if it is not a registered trademark.  Thus, if your company name, mark or call sign is unregistered, you can either register it as your own Facebook user name or wait until someone else does that and complain after the fact.  You do not need to be a Facebook user to submit the intellectual property rights forms described above.

Continue Reading Protect Your Company Name or Call Sign on Facebook