Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory developments from the past week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
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.
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.
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.
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
Here are some of the FCC actions of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
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Noncommercial broadcast stations are licensed to be just that – noncommercial. These stations can run “underwriting announcements” acknowledging commercial businesses that provide financial support to the stations, but such announcements must meet strict guidelines – including restrictions on “calls to action,” prohibitions on statements about prices or discounts, and requirements that no qualitative claim about the sponsor’s products or services can be made. From time to time, the FCC will fine or admonish noncommercial stations that run underwriting announcements that are too commercial. Yesterday, the FCC announced that its Enforcement Bureau had reached a Consent Decree (available here) with a noncommercial broadcaster who acknowledged having run underwriting announcements that had exceeded the bounds set by the rule. To settle the complaints about its announcements at stations in California and Arizona, the licensee agreed to pay the FCC a penalty of $115,000. According to the FCC Press Release on the matter, this was the highest penalty ever imposed on a noncommercial broadcaster for violations of the underwriting rules.
In addition to the fine, the licensee had to agree to a one-year moratorium on underwriting announcements from commercial entities. In addition, the licensee had to institute a compliance plan to educate its employees about the requirements of the FCC rules on underwriting, including a requirement that it create a training manual for use by its staff, and that it appoint a compliance officer to oversee compliance with the underwriting restrictions. For four years, the licensee needs to report to the FCC any instance where they violate the rules, and file a yearly report detailing their efforts to maintain compliance and certifying either that there have not been any violations of the rules or, if such a certification cannot be made, the details of any violations.
Continue Reading FCC Reaches Consent Decree with Noncommercial Broadcaster Imposing Largest Fine Ever Issued for Underwriting Violations – $115,000
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?
Continue Reading FCC Declines to Allow Experimentation with Noncommercial Underwriting Rules
Low Power FM potential applicants, start your engines. The FCC has announced the long-awaited window for the filing of applications for new LPFM stations. The window will last from October 15-October 29. During this period, nonprofit organizations and governmental organizations will have the opportunity to file for new stations on any FM channel anywhere in the country – as long as they don’t interfere with existing FM or FM translator stations (or channel 6 TV stations which operate on a channel adjacent to the FM band). The FCC has done a great job in processing the remainder of the applications from the 2003 FM translator window, announcing a settlement window for applicants in that proceeding that is open through July 22, to be followed by an auction. Substantially completing the processing of those translator applications has cleared the way for the upcoming LPFM window.
Two FCC Commissioners issued statements hailing the upcoming window and the opportunities that it will present for encouraging more diversity in the media marketplace (see statements of Acting FCC Chair Clyburn and Commissioner Pai). A number of groups that have actively championed LPFM also applauded the opening of the window, some trumpeting plans for workshops across the country to help people prepare for the filing opportunities. We hope that expectations are not being unduly raised. Particularly in larger markets, as the FCC itself has recognized, there will be only very limited opportunities for LPFM applicants, as there is very limited spectrum in those markets not already occupied by FM stations or close enough to existing stations to create interference. As the LPFM rules require that new stations protect existing FM stations from interference on co-channels and first and second adjacent channels, in large markets, there will be little room for new LPFM stations. Groups thinking about opportunities in those markets need to be prepared to face competition for the few channels that may be available and to be realistic – as there will be many places where no channels will be available to serve a particular part of a metropolitan area.Continue Reading As FM Translator Settlement Window Continues, the FCC Announces LPFM Window in October – Factors for an LPFM Applicant to Consider
In a decision granting the license renewal of a noncommercial radio station, the FCC’s Media Bureau addressed a number of interesting issues – including the requirements for noncommercial underwriting announcements, whether PSAs meet a station’s public service obligations, and the ability of stations to run cigarette ads in historical radio programs from early radio days. These issues all came up in a decision to renew the station’s license despite a petition from a former manager alleging that the station had violated a number of Commission rules or policies – a petition raising all of these issues.
The $3000 fine that the FCC proposes to levy on the station was for what the FCC found to be improper underwriting announcements. Two different issues were found to violate FCC standards – one fairly straightforward, one less so. The relatively easy issue was whether the underwriting announcement by a musical group stating that it was voted “Canada’s #1 bluegrass band” made a qualitative claim. The station argued that the #1 claim was simply a statement of fact based on the vote in Canada. The FCC, not surprisingly, found that the “#1” label, no matter how it was derived, was a qualitative claim and thus prohibited as part of an underwriting acknowledgment on a noncommercial station. Such announcements cannot be commercial in nature – meaning that they cannot contain a call to action, price information or qualitative claims about the products or services offered by the sponsor. See articles that we have previously written on underwriting issues: here and here and here, as well as a presentation on that issue that is discussed here.Continue Reading $3000 Fine Against Noncommercial Station for Underwriting Violations – With Discussion of PSAs as Public Interest Programming and Cigarette Ads in Classic Radio Program
