qualitative claims in sponsorship ads

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When do noncommercial stations stray from permissible acknowledgment of those local businesses that provide funding for its operations to impermissible commercials?  That question was addressed in a Notice of Apparent Liability issued by the FCC’s Enforcement Bureau on Thursday, proposing a $15,000 fine for a low power FM station whose underwriting announcements were deemed too commercial.  The decision, which includes examples of the announcements deemed problematic, is must-reading for all noncommercial licensees who want to avoid fines from the FCC in connection with their underwriting acknowledgements for commercial entities.

The decision breaks down into four categories the reasons for finding the announcements in this case to be too promotional.  The first category is one that often arises in connection with these announcements – the underwriting announcement uses terms that make qualitative claims about the sponsor.  You can’t talk about a commercial sponsor being voted the “best” or being the “most experienced.”  Talking about mechanics who are “experts” in working on certain cars, or decorators who have “an exceptional eye for the perfect arrangement” are all examples of announcements that cross the line.  In this case, some of the examples of impermissible qualitative claims include a car repair shop with “certified master technicians” who use “state of the art equipment.”  Another was for a new real estate company that was characterized as being “one of the fastest growing real estate companies in the country” having “23 agents and a combined experience of over 300 years” and being a “national company with a local flair” having “recruited some of the most well-known agents.”  Another for a computer repair company was perhaps closer to the line but still was deemed too promotional, saying “don’t waste your time when you have a professional nerd to help make your life run easier” and “we’re not your average nerds.”  In some cases, like the last one, had it been the only identified issue, the FCC may have just determined that it was an exercise of licensee judgement about what was too promotional and let it go.  But in a case like this one, with so many other issues, it was identified as being a problem.
Continue Reading $15,000 FCC Fine Proposed for Underwriting Announcements that Were Too Commercial

Every noncommercial station, including LPFMs, that accepts underwriting announcements should be concerned about making sure that the announcements meet FCC guidelines and remain truly noncommercial.  An FCC Order was released yesterday announcing a consent decree entered into between the University of Arkansas and the FCC’s Enforcement Bureau.  The Order illustrates what can happen if noncommercial stations are not careful – as the University agreed to pay what is essentially a fine of $76,000 and to adopt a compliance plan that forces the University to carefully monitor underwriting announcements for the next five years, as well as engaging in programs to educate and monitor its staff to insure future compliance.  The FCC Order announcing the consent decree should be carefully reviewed by all noncommercial broadcasters to see what can happen if they do not comply with the rules.

The FCC’s Order itself does not go into detail about the alleged instances of where the station exceeded what is permitted by the rules.  But the Order does enumerate the policies that restrict underwriting in the following statement:

such announcements may not contain comparative or qualitative descriptions; price information (sales or discounts); calls to action; inducements to buy, sell, rent, or lease; or excessively detailed “menu listings” of services offered by the entity. Although the Commission has not adopted any quantitative guidelines on underwriting announcements, it has found that the longer the announcement, the more likely it is to contain material that is inconsistent with their “identification only” purpose.

While most noncommercial broadcasters are familiar with the obligations to avoid calls to action, qualitative claims, and price and discount information, some of the more subjective criteria listed in the Order may not be as familiar.  The FCC notes that underwriting announcements, while they can generally mention the services provided by an underwriter, they should not have an excessively detailed list of those services.  In addition, the announcements should not be of excessive length, as they are likely to sound more commercial – going beyond a mere identification of the sponsor.  See our article here for another case where this issue arose.
Continue Reading University Pays $76,000 Fine to Settle Complaint About Underwriting Announcements on Noncommercial Station that Went Too Far

Last week, the FCC issued several fines to noncommercial broadcasters who had underwriting announcements that sounded too commercial.  In these decisions, the Commission found that the stations had broadcast promotional announcements for commercial businesses – and those announcements did not conform to the FCC’s rules requiring that announcements acknowledging contributions to noncommercial stations cannot contain qualitative claims about the sponsor, nor can they contain "calls to action" suggesting that listeners patronize the sponsor.  These cases also raised an interesting issue in that the promotional announcements that exceeded FCC limits were not in programming produced by the station, but instead in programs produced by outside parties who received the compensation that led to the announcement.  The FCC found that there was liability for the spots that were too promotional even though the station itself had received no compensation for the airing of that spot.

The rules for underwriting announcements on noncommercial stations (including Low Power FM stations) limit these announcements to ones that identify sponsors, but do not overtly promote their businesses.   Underwriting announcements can identify the sponsor, say what the business of the sponsor is, and give a location (seemingly including a website address).  But the announcements cannot do anything that would specifically encourage patronage of the sponsor’s business.  They cannot contain a "call to action" (e.g. they cannot say "visit Joe’s hardware on Main Street" or "Call Mary’s Insurance Company today").  They cannot contain any qualitative statements about the sponsors products or services (e.g. they cannot say "delicious food", "the best service", or "a friendly and knowledgeable staff" ).  The underwriting announcements cannot contain price information about products sold by a sponsor.  In one of the cases decided this week, the Commission also stated that the announcements cannot be too long, as that in and of itself makes the spot seem overly promotional and was more than was necessary to identify the sponsor and the business that the sponsor was in.  The spot that was criticized was approximately 60 seconds in length. Continue Reading FCC Fines for Noncommercial Stations Having Underwriting Announcements That Were Too Commercial – Even Where the Station Received No Money