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 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 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.
Yesterday, the new FCC Chairman Brendan Carr sent a letter to NPR and PBS announcing that he has asked the FCC’s Enforcement Bureau to launch an investigation into their advertising practices – suggesting without specifics that these entities had gone beyond the permitted underwriting announcements by airing prohibited advertisements for commercial products and services (Commissioner Starks and Gomez issued statements questioning the basis for this investigation). While the Chairman’s letter was vague on specifics, and unclear as to whether there were specific listener or viewer complaints that triggered the investigation (which is how the FCC typically initiates an investigation into a broadcaster’s regulatory compliance ), the letter does suggest that all noncommercial broadcast stations, including all LPFM stations and other full-power stations not affiliated with NPR or PBS, should examine their practices to ensure that they comply with the FCC’s underwriting policies.
What do these rules require? Noncommercial stations can air acknowledgments of those making financial contributions to stations, but the identification of such sponsors must be limited – you can give their name, a general description of what their business is and where they are located, but such information must be provided in an objective, non-promotional manner. FCC standards prohibit calls to action (e.g., “visit this store,” “come on down”), inducements to buy (e.g., “we have a two for one special,” “mention the station and you’ll get a discount on all that you buy”), price information (e.g., “tickets only $29.99” or “this week, we have our end-of-year sale” or “10% senior discounts”) or qualitative claims (“the best pizza in town,” “quality merchandise and a friendly staff”). We have written many articles on these issues (see, for instance, articles here, here and here) and the fines that have arisen when the rules were not followed. Continue Reading As FCC Chairman Announces an Investigation into Alleged PBS and NPR Advertising, a Look at the Underwriting Requirements for All Noncommercial Broadcast Stations
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 last week, with links to where you can go to find more information as to how these actions may affect your operations.
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Last week, the FCC reached a consent decree with a noncommercial broadcaster, where the broadcaster paid an $8000 penalty for, among other things, running underwriting spots that were too promotional. While the consent decree and its implementing order provide no details on the underwriting violations by the broadcaster, we can assume that the broadcaster ran spots that somehow crossed the line – giving price information about a sponsor’s products, or including a call to action suggesting that listeners somehow patronize the sponsor, or making qualitative claims about the sponsor or its products or services. We have written about similar violations many times (see, for instance, our articles here, here, here, here and here) and I have conducted seminars for numerous noncommercial broadcasting organizations talking about specifics as to what is permitted in underwriting acknowledgements and what will get a noncommercial station into trouble (see for instance, the presentations mentioned here and here). Obviously, it is important that noncommercial stations pay attention to these restrictions. But, last week, I received a question that indicated that not all noncommercial stations realize that, while their ability to promote a commercial enterprise is limited, these same restrictions do not apply to on-air spots for other nonprofit organizations.
About 35 years ago, Congress changed the provisions of the Communications Act to redefine what a noncommercial station can and cannot do. Noncommercial stations obviously cannot run commercials. But the language of the statute makes clear that commercials are promotional announcements for profit businesses. In looking at that statutory change, after much discussion, the FCC concluded that the restrictions on underwriting announcements that apply to these noncommercial businesses do not apply to promotional announcements for nonprofit entities.
Continue Reading Remember FCC Rules on Underwriting Limitations – And that They Don’t Apply to Spots Bought By Nonprofit Entities
Section 399b of the Communications Act bans advertising for for-profit companies, as well as political and issue advertising, on noncommercial radio and television stations. While Congress over 20 years ago loosened some restrictions on fundraising by allowing paid ads by nonprofit groups on noncommercial stations, and permitting commercial entities to provide some minimal information about their businesses (including their logos) on sponsorship underwriting on public TV, the ban has otherwise prohibited commercial and political ads containing qualitative claims, price information or calls to action. In a recent decision, the US Court of Appeals for the Ninth Circuit affirmed a decision of a California District Court upholding the constitutionality of that ban against a challenge by a noncommercial TV station operator who contended that the rule was an unconstitutional abridgement of the First Amendment. The case is particularly interesting not just for the analysis by the Court in upholding the ban, but perhaps more so for the dissenting opinion of the Court’s Chief Judge, who found that the Court’s analysis ignored modern realities of the broadcast world in adopting a reduced standard of First Amendment protection for broadcasters leading the majority to be too timid in questioning the justification for the ban advanced by the government. Thus, the case has importance not just for noncommercial broadcasters looking for new sources of revenue, but also for other broadcasters concerned about intrusive government regulation of their industry and the standard of First Amendment review that would be applied to such regulation.
We had written about an earlier decision in this case here and here. The case arose when a public television operator in the San Francisco area, Minority Television Project, Inc., was fined by the FCC for having run promotional ads for commercial and political advertisers, and decided to fight that ban in court. A panel of the Court of Appeals determined that the fine was appropriate for running commercials for for-profit companies, but unexpectedly threw out the Section 399b restriction on ads on political or controversial issues, finding that the public good of speech on these topics outweighed the government’s interest in fostering public broadcasting.
Continue Reading Court of Appeals Upholds Communications Act Ban on Commercial and Political Advertising on Public TV Stations – Significant Analysis of the Standards for First Amendment Review of all Broadcast Regulation
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
The FCC has adopted a Notice of Proposed Rulemaking suggesting, with significant limitations, a liberalization of its rules that prohibit noncommercial broadcasters from raising funds for an entity other than the station itself if the fundraising suspends or alters normal programming of the station. As we’ve written before, the FCC prohibits noncommercial broadcasters from raising funds for charities and other non-profit organizations through telethons or other special programming. The prohibition has been in place for some time, and was reaffirmed by the FCC’s orders in the early 1980s which established the basic rules that still today govern most noncommercial fundraising and sales activities.
The prohibition on third-party fundraising reflected the Commission’s concern that educational stations are "licensed to provide a noncommercial broadcast service, not to serve as a fund-raising operation for other entities by broadcasting material that is akin to regular advertising." Doing too much fundraising for these third parties, in the Commission’s view when the rule was adopted, would distract stations from their principal mission of service to the public. While the Communications Act was changed in the early 1980s to allow noncommercial broadcasters to accept paid promotional spots for nonprofit groups, the FCC did not change the rule on third-party fundraising that disrupts normal programming. In the NPRM just adopted, the Commission recites that they still believe the justification for the rule to be true, even though noncommercial stations can now run what is essentially paid advertising for nonprofit organizations, as long as those spots are incorporated into the normal programming of the stations. What the Commission now proposes is a limited degree of liberalization of the third-party fundraising prohibition, subject to many conditions set forth below.Continue Reading FCC Proposes to Liberalize Rules Against Noncommercial Stations Fundraising For Third-Party Non-Profit Groups
