The FCC yesterday issued an order declining to allow experimentation with the noncommercial underwriting rules that was requested by the licensee of noncommercial radio stations in the Phoenix area. The licensee had asked the FCC for permission to conduct a three year experiment by relaxing the underwriting rules in certain ways to determine the effect such a relaxation would have on its ability to raise revenue, and the impact on the listening and support that the station currently enjoys. In denying the station experimental authority to conduct the test, the FCC determined that it lacked the authority to authorize it, as the relaxation that the license was seeking would be prohibited not only by FCC rules, but also by statute, and the FCC cannot waive or grant an exception to a statutory provision (unless specifically permitted by the statute).
The underwriting rules prohibit noncommercial stations from running advertising for commercial entities. These rules have been relaxed somewhat over the last 30 years to allow for “enhanced underwriting” announcements, which allow noncommercial stations to identify their sponsors, and provide limited information about the products and services of those sponsors. But the information cannot be promotional in nature. Specifically, there are a number of limitations put on these announcements. Some of these limitations include: (1) the announcements cannot contain “calls to action” – statements that suggest that listeners buy from the sponsor or patronize their place of business; (2) the announcements cannot have qualitative claims – so noncommercial stations cannot say that their sponsor was voted the “best car repair shop in the city by City Magazine,” even if that statement of fact is true; and (3) the announcement cannot provide price or other information relevant to a buying decision, e.g. where tickets are sold, interest rates, etc. For more information about these rules, see some of our previous articles on this topic here, here, here and here, as well as a presentation on that issue that is discussed here. What did this licensee seek to change in its experiment?
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