Articles Posted in Advertising

Published on:

By

Time moves slowly in the regulatory universe, at least until you are facing a deadline.  It was in 2022 that I first wrote about the then-upcoming September 15, 2022 deadline for broadcasters to disclose whether all content “aired pursuant to the lease of time on the station” had a “foreign governmental entity” behind it, in which case the broadcaster needed to disclose that foreign sponsorship both on-air and in the station’s Public Inspection File.  The task was made more difficult by the broad definition of a foreign governmental entity, which included not just foreign governments, but “foreign political parties, agents of foreign principals, and United States-based foreign media outlets.”

The part of the rule requiring broadcasters to independently investigate whether those leasing airtime were foreign governmental entities was overturned by the courts in July 2022, but that didn’t prevent the remainder of the rule from going into effect in 2022.  The remainder (as summarized by the FCC) included:

(1) Inform the lessee of the foreign sponsorship disclosure requirement.
(2) Ask the lessee whether it falls into any of the categories that would qualify it as a “foreign governmental entity.”
(3) Ask the lessee whether it knows if any individual/entity further back in the chain of
producing/distributing the programming to be aired qualifies as a foreign governmental entity and has provided some type of inducement to air the programming.
(4) Memorialize the above-listed inquiries and retain such memorialization in its records for the remainder of the license term or for one year, whichever is longer.

The FCC, unwilling to settle for 4/5 of the apple and obviously stung by the court’s rebuke, altered the rule in June 2024 to sidestep the court’s ruling.  Since the court had found that the FCC lacked statutory authority to compel broadcasters to obtain sponsorship information from anyone other than their employees and program sponsors, the FCC amended the rule to require that either (1) the broadcaster and the sponsor execute separate certifications “reflecting the communications and inquiries required under the existing rules,” or (2) the broadcaster “ask their lessees for screenshots of lessees’ search results of two federal government websites [DOJ’s FARA website and the FCC’s U.S.-based foreign media outlets reports].”  In other words, the FCC’s maneuver was that if it was beyond its authority to make broadcasters conduct due diligence searches of those two government websites, it wasn’t beyond its authority to demand broadcasters still conduct due diligence research by asking their content providers/sponsors to search those same two websites and provide the search results to the broadcaster.

It’s an onerous requirement given that broadcasters have no legal right to demand anything of their content providers/sponsors, and those same providers can simply elect to take their business to literally every other form of media without facing such regulatory hurdles.  While unwelcome, it was still largely manageable because the FCC in adopting the original rule had made clear that a lease of airtime did not include “traditional, short-form advertising,” and leases of blocks of airtime on broadcast stations are relatively rare compared to traditional ad sales.

Unfortunately, in the later June 2024 Order, the FCC “clarified” the rule to make clear that it “will not apply to sales of advertising for commercial goods and services to the extent that such programming would not otherwise be subject to the general sponsorship disclosure rules, as set forth in section 73.1212(f) of our rules.”  So it would apply to ads that are not for “commercial goods and services.”  That includes ads for nonprofits and ads that don’t fit within Section 73.1212(f).  One example of an ad that is not for a commercial product or service is a U.S. Navy recruiting ad, meaning that broadcasters would need to collect certifications/proof that the U.S. Navy is not a representative of a foreign government before airing its recruiting ads.

The Order then plunged the regulatory dagger deeper, explicitly stating that the rule would apply to the airing of paid Public Service Announcements (PSAs) and all political advertising unless placed by a candidate.  The sheer volume of political ads and the pace at which they are changed in the months leading up to an election is staggering, with ample FCC Political File disclosure requirements already bedeviling stations trying to handle that workload.  The notion of demanding yet more information and documentation from a political advertiser adds to the burden on station employees while giving political advertisers one more reason to take their advertising elsewhere, where they will face none of those regulatory headaches.  And let’s be honest; some advertisers will be absolutely offended by the mere suggestion that they could be connected to a foreign government.

Because no one could figure out how to make such a labor and paperwork-intensive process work in the real world, and because the paperwork requirements had to be approved by the Office of Management and Budget before they could go into effect, the FCC originally announced the amended rule would go into effect a year later, on June 10, 2025.  Then, late in the day on June 10, 2025, the FCC announced an extension of the compliance deadline to December 8, 2025.  Announcing extensions for what appeared to many to be a fundamentally unworkable rule became a running feature here on CommLawCenter.

So I was not entirely surprised to find myself writing on December 5, 2025, one business day before the next deadline, that the FCC had just announced a further extension of the deadline to June 7, 2026.  That post ended with the hopeful message that the FCC might “use this added time to streamline these rather unwieldy requirements before next June.”

That proved partially prophetic.  This time around the FCC didn’t wait until the last minute to announce its plans regarding when broadcasters must come into compliance with the amended foreign sponsorship rule.  While today’s FCC Public Notice emphasized that the deadline for complying with the amended foreign sponsorship rule remains June 7, 2026, it announced that it is suspending the compliance deadline for advertisements and paid PSAs for “two years or until further public notice, whichever comes first.”

More important than the two-year extension is the reason given for it: “this delay of the advertisement and paid PSA regulation is necessary for the Commission to evaluate the costs and burdens associated with these requirements to ensure that there is sufficient offsetting public benefit.”  In other words, the FCC is reassessing whether the burden imposed by expanding the “diligence” requirement to advertising and paid PSAs makes any sense given the substantial burdens involved and the lack of any record evidence demonstrating that broadcast advertisements are being used as undisclosed propaganda tools by foreign governments.

That doesn’t mean that the non-diligence parts of the rule don’t still apply to advertisements and paid PSAs.  While broadcasters won’t be required to provide certifications or government database search results demonstrating that an ad sponsor is not connected to a foreign government, if the broadcaster has actual knowledge that the sponsor is connected to a foreign government, it must still ensure the ad includes an on-air disclosure of that fact, and place a record of it in its Public Inspection File.

So the next time you see a “Visit Scandinavia” ad that portrays Scandinavia as a pleasant place to visit, don’t fall for it.  That’s just what the Scandinavian governments want you to think.

Published on:

By

With a December 8 deadline to come into compliance with the FCC’s new sponsorship identification requirements for airing content connected to a foreign government, broadcasters have been racing to figure out how to comply in a practical way.  As previously discussed here and here, the new rule requires that broadcasters determine whether leases of airtime (including certain advertising) involve content that is provided, funded, or distributed by “governments of foreign countries, foreign political parties, agents of foreign principals, and United States-based foreign media outlets.”

Under the rule, broadcasters must document their completion of a number of required steps to determine if provided content has such foreign government connections, and if so, ensure disclosures are included in the content when aired, and place documentation of those disclosures in the Public Inspection File on a quarterly basis.

The challenge is not so much the airing of the disclosures themselves, but collecting the required paperwork from potentially thousands of advertisers to determine if any are connected to a foreign government.  Beyond the sheer paperwork and resources burden, broadcasters do not want to make it yet more difficult for advertisers to purchase broadcast airtime, particularly when those same advertisers can simply move their content to streamers or other online venues and skip the paperwork complexities entirely, whether connected to a foreign government or not.

The current version of the rule became effective on June 10, 2025, but on that date, the FCC extended the compliance deadline to December 8, 2025.  This gave broadcasters a six-month reprieve, but even with that added time, compliance remained a daunting proposition.

It was therefore with a sigh of relief that broadcasters learned this afternoon that the FCC has again moved the compliance deadline, this time to June 7, 2026.  This not only provides broadcasters with additional time to sort out a practical approach to complying with the new requirements, but keeps alive the hope that the FCC will use this added time to streamline these rather unwieldy requirements before next June.

Published on:

By and

With publication of OMB approval in the Federal Register, today was the effective date for amendments to Section 73.1212(j) of the FCC’s Rules, which governs sponsorship identification for broadcast programming that “has been provided by a foreign governmental entity.”  Under those amendments, broadcast licensees would need to use one of two recordkeeping methods to demonstrate compliance with the foreign sponsorship disclosure rules.

Late today, however, the FCC’s Media Bureau released a Public Notice stating:

By this Public Notice, the Bureau announces that OMB has approved the rule modifications which revise requirements under 47 CFR § 73.1212(j)(3).  Accordingly, these revised requirements are now effective as of June 10, 2025.  However, the Bureau defers requiring compliance with the revised rules under 47 CFR § 73.1212(j)(3) until 6 months after June 10, 2025, or December 8, 2025. Only new leases and renewals of existing leases entered into on or after the compliance date must comply with the rule modifications.

So while the amended rules did go into effect today, broadcasters won’t need to come into compliance with the new recordkeeping requirements until December 8, 2025.  Until that time, you can read a detailed description of how the currently applicable pre-amendment rule works here.

Hopefully, today’s announced delay is a cause for optimism that a deregulatory FCC might use the additional time to streamline these cumbersome requirements.  If not, however, on December 8, 2025, stations will need to maintain records verifying whether a party leasing airtime is a “foreign governmental entity” for purposes of providing adequate disclosures through one of the following two recordkeeping methods:

Certification Approach

Stations and lessees of airtime must each complete a written certification reflecting that the station made the required inquiries regarding foreign governmental sponsorship.  Parties may use the FCC’s own “check-box” templates (Appendices C and D to the FCC’s Order), or create their own certification forms, provided that the forms collectively address the following required certifications:

  • Whether the licensee informed the airtime lessee of the foreign sponsorship disclosure requirement;
  • Whether the licensee asked about, and whether the lessee is, a “foreign governmental entity,” which includes foreign governments, foreign political parties, agents of foreign principals (as defined by the Foreign Agents Registration Act of 1938 (FARA), and U.S.-based foreign media outlets;
  • Whether the licensee asked about, and whether the lessee knows of, any entity or individual further back in the production or distribution chain that meets the definition of a foreign governmental entity and has provided some form of inducement to air the programming;
  • Whether the licensee sought a written certification from the lessee certifying lessee’s answers; and
  • Whether the licensee obtained the necessary information for a disclosure where one is required.

These certifications must be dated and signed by an appropriate representative of each party and retained in the licensee’s records as discussed below.

Screenshot Approach

As an alternative to certifications, licensees may ask lessees to provide screenshots of their search results when searching for themselves in the following two federal databases:

This option places the responsibility for conducting the searches on the lessee and, the FCC believes, avoids triggering the investigatory concerns raised by the D.C. Circuit. Licensees must still conduct and document the same underlying foreign sponsorship inquiries (but without need of written certifications) and retain the lessee responses in their records.

Regardless of which approach a station adopts by December 8, it must retain documentation of its diligence efforts—whether certifications or screenshots—for the remainder of the license term or one year, whichever is longer.  The records may be stored in either the licensee’s Public Inspection File or in its internal files, as long as the documents are promptly made available to the FCC upon request.

Published on:

By and

The Federal Communications Commission (FCC) last week released a highly anticipated Notice of Proposed Rulemaking (NPRM) seeking comment on proposed disclosure requirements for political ads containing AI-generated content.  The item was adopted earlier this month by a 3-2 party-line vote, nearly two months after FCC Chairwoman Rosenworcel first announced its circulation among the commissioners for consideration.

As discussed in more detail below, the proposed rule would require radio and TV broadcasters to (1) inquire of any person making a request to buy airtime for political advertising whether the ad contains AI-generated content; (2) make on-air disclosures of AI use with regard to political ads containing AI-generated content immediately before or during their airing; and (3) include a disclosure of AI use in the station’s Political File records for each such ad buy.  While this post focuses on the NPRM’s broadcast-specific proposals, we note that it proposes similar obligations for cable operators, Direct Broadcast Satellite providers, and Satellite Digital Audio Radio Service licensees engaged in program origination, as well as for Section 325 permit holders (those authorized to export programming for transmission back into the United States).

Aware that such rules might conflict with similar efforts by states and other federal agencies, the NPRM characterizes the proposed disclosure requirements as a “complement” to efforts to regulate AI in political advertising that are underway in various states and at the Federal Election Commission (FEC), which we wrote about here and here.  However, FEC Chairman Sean Cooksey made his contrary views clear in a letter last month to FCC Chairwoman Rosenworcel in which he stated that the FEC has exclusive jurisdiction in this area and “the FCC lacks legal authority to promulgate conflicting disclaimer requirements only for political communications.”

The proposal would require broadcasters to do the following:

Duty of Inquiry:  Broadcasters would need to inform each political advertiser, at the time the station agrees to air a political ad, of the requirement that stations must air a disclosure for any ad that includes AI-generated content and then inquire of the buyer as to whether the ad includes such content.  While styled as a “simple inquiry,” the NPRM acknowledges various challenges that are likely to arise.  It seeks comments on how to deal with such situations, including, for example, where a station is working with a media placement agency that had no role in the creation of the ad and which may not know whether it includes AI-generated content, or the station receives political content from a network or syndicator and has no direct contact with the advertiser.

On-Air Disclosure:  A broadcast station that receives a candidate or issue ad containing AI-generated content would need to air a disclosure immediately before or during the ad to inform viewers of the ad’s use of AI.  The proposal contemplates and seeks comment on the following standardized language for the disclosure: “[The following]/[this] message contains information generated in whole or in part by artificial intelligence.”  Once again, the NPRM acknowledges there are challenges broadcasters will face in complying with the proposed rule.  These include (a) what should a station do if it has received no response to its inquiry about AI use; (b) what should a station do if it was told by the person or entity buying the time that an ad contains no AI-generated content and is later informed by a credible third party that the ad does include AI-generated content (and who should qualify as a “credible third party?”); and (c) what should a station do when it receives political programming through a network and lacks any information from the advertiser on AI use as well as the ability to insert a disclosure in network-delivered programming?  The NPRM seeks comment on these and many other issues that may affect a station’s ability to comply with the proposed disclosure requirement.

Online Disclosure: Adding yet more to the burden on broadcasters, the NPRM proposes requiring broadcasters to include in their online Political Files the following written disclosure for each political ad containing AI-generated content: “This message contains information generated in whole or in part by artificial intelligence.”

Because of the FCC’s limited jurisdiction, the proposed rules would apply only to certain FCC-regulated entities, doing nothing to address the use of AI in political ads that voters see and hear on social media or elsewhere.  As a result, it would impose a significant burden on regulated entities while leaving unregulated entities like social media—the primary source of deceptive political information—completely unregulated.  This would incentivize advertisers to put their AI ads on any media other than radio and TV, both because of their desire not to include disclosures and the added bureaucracy/delay involved in the multi-step process stations would need to follow with advertisers to determine if a disclosure is needed (and the added time needed to then insert such a disclosure). Continue reading →

Published on:

By and

Pillsbury’s communications lawyers have published the FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Louisiana TV Station Admonished for Lack of Non-Discrimination Clause in Advertising Contracts
  • $25,000 Fine for a Variety of Rule Violations by Florida Low Power FM Station Affirmed
  • FCC Proposes $367,436 Fine for Marketing Violations Involving WiFi Devices

FCC Media Bureau Admonishes TV Station for Lack of Non-Discrimination Clause in Advertising Contracts

The FCC’s Media Bureau admonished a Louisiana TV station for failing to include a non-discrimination clause in its advertising sales contracts.  While it stopped short of issuing a fine, the Bureau warned that future violations could result in harsher sanctions.

Since 2008, the FCC has required commercial radio and television stations to include explicit non-discrimination clauses in their ad sales contracts.  To ensure compliance, the FCC revised its broadcast license renewal application form in 2011 to require commercial broadcasters to certify that their ad sales contracts contain a non-discrimination clause making clear to advertisers that the station will not accept advertising placed with an intent to discriminate on the basis of race or ethnicity.  If a licensee is unable to certify compliance, the FCC requires an attachment to the license renewal application explaining the circumstances and why such non-compliance should not be considered an obstacle to the station’s license renewal.

The TV station responded “No” to the non-discrimination certification in its license renewal application, noting that its advertising agreements did not contain a non-discrimination clause.  The station indicated, however, that it does not permit discrimination in its ad sales and that it would add a non-discrimination clause to its ad sales contracts going forward.

In light of the absence of any evidence that the station had actually engaged in discriminatory ad sales, the Media Bureau admonished the station, granted its license renewal application, and warned that any future violations could trigger fines or more severe sanctions.

While enforcement actions involving the FCC’s advertising non-discrimination requirements are uncommon, that is because most stations are able to make the necessary certification in their license renewal application.  Radio and television broadcasters should examine their advertising contracts to ensure they contain the necessary language and that their stations have in fact been meeting their obligation to prevent discrimination by race or ethnicity in advertising sales.

FCC Enforcement Bureau Denies Petition to Reconsider $25,000 LPFM Fine

The FCC Enforcement Bureau denied a Petition for Reconsideration filed by the licensee of a Florida low power FM radio station, finding unpersuasive the licensee’s argument that a $25,000 fine should be cancelled due to the licensee’s inability to pay.

A 2022 Forfeiture Order concluded that the licensee failed to: (1) operate the station according to the parameters of its license and the FCC’s rules; (2) make the station available for inspection by FCC field agents; and (3) properly maintain Emergency Alert System (EAS) equipment. Continue reading →

Published on:

By and

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • TV Broadcaster Faces $150,000 Fine for Failure to Negotiate Retransmission Consent in Good Faith
  • Sponsorship ID and Political File Violations Lead to $500,000 Consent Decree for Radio Broadcaster
  • $26,000 Fine for Georgia Radio Station EEO Rule Violations

 FCC Finds That TV Broadcaster Failed to Negotiate Retransmission Consent in Good Faith

Responding to a complaint by a cable TV provider, the Federal Communications Commission found that a broadcaster failed to negotiate retransmission consent for its New York TV station in good faith.  The enforcement action involves a Notice of Apparent Liability for Forfeiture (NAL) proposing a $150,000 fine against the broadcast licensee.  The licensee was represented in the negotiations by another broadcaster who provides services to the station at issue.

Under Section 325 of the Communications Act of 1934, as amended (the Act), TV stations and multichannel video programming distributors (i.e., cable and satellite TV providers) have a duty to negotiate retransmission consent agreements in good faith.  In a 2000 Order, the FCC adopted rules relating to good faith negotiations, setting out procedures for parties to allege violations of the rules.  The Order established a two-part good faith negotiation test.  Part one of the test is a list of objective negotiation standards, the violation of any of which is deemed to be a per se violation of a party’s duty to negotiate in good faith.  Part two of the test is a subjective “totality of the circumstances” test in which the FCC reviews the facts presented in a complaint to determine if the combined facts establish an overall failure to negotiate in good faith.

In this case, the cable provider complained that the broadcaster, through its negotiator, proposed terms for renewal of the parties’ agreement that would have prohibited either party from filing certain complaints with the FCC after execution of the agreement.  For its part, the broadcaster did not dispute that it proposed the terms in question, but argued that (1) “releasing FCC-related claims or withdrawing FCC complaints is not novel,” (2) “parties typically agree to withdraw good faith negotiation complaints once retransmission consent agreements have been reached,” and (3) no violation could have occurred since the proposed term was not included in the final agreement reached.

The FCC disagreed, stating that its 2000 Order made clear that proposing terms which foreclose the filing of FCC complaints is a presumptive violation of the good faith negotiation rules.  The FCC also disagreed with the broadcaster’s contention that terms not included in a final agreement could not violate the good faith rules.  Finally, while the licensee argued that it was not responsible for actions taken by the party negotiating on its behalf, the FCC reiterated that licensees are responsible for the actions of their agents, and the licensee in this case delegated negotiation of the agreement to its agent.

Relying upon statutory authority and its Forfeiture Policy Statement, the FCC arrived at a proposed fine of $150,000.  The Forfeiture Policy Statement establishes a base fine of $7,500 for violating the cable broadcast carriage rules, and the FCC asserted that the alleged violations continued for 10 days (the time period from first proposing the terms at issue and the signing of the agreement without them), yielding a base fine of $75,000.  The FCC then exercised its discretion to upwardly adjust the proposed fine to $150,000, asserting that the increase was justified based on the licensee’s financial relationship with a large TV company, its prior rule violations, and the FCC’s view that a larger fine was necessary to serve as a meaningful deterrent against future violations.

Repeated Violations of Sponsorship ID and Political File Rules Lead to $500,000 Consent Decree

A large radio station group entered into a consent decree with the FCC’s Media Bureau, agreeing to pay a $500,000 civil penalty for two of its stations’ violations of sponsorship identification laws and the Political File rule.

Section 317(a)(1) of the Act and Section 73.1212(a) of the FCC’s Rules require broadcast stations to identify the sponsor of any sponsored content broadcast on the station.  This requirement applies to all advertising, music, and any other broadcast content if the station or its employees received something of value for airing it.  The FCC has said that the sponsorship identification laws are “grounded in the principle that listeners and viewers are entitled to know who seeks to persuade them . . . .” Continue reading →

Published on:

By

With the Iowa Republican Caucus happening in mid-January and dozens of additional primaries and caucuses to follow before the 2024 general election, broadcasters need to be aware of the use of artificial intelligence (AI), deepfakes and synthetic media in political advertising and the various laws at play when such content is used. These laws seek to ensure that viewers and listeners are made aware that the person they are seeing or the voice they are hearing in political advertising may not be who it looks like or sounds like. Campaigns, political committees, super PACs, special interest groups and other political advertisers are using AI, deepfakes and synthetic media in advertisements, making it easier to mislead and misinform viewers and listeners.

Continue reading →

Published on:

By

As the trades have reported, a rather unusual spot appearing to be a FOX NFL promo aired during yesterday’s NFL pre-game show.  What made it particularly unusual was that it included an EAS-like tone, and had a URL at the bottom of the screen for “WWW.FOXNFLEMERGENCYALERT.COM.”  That URL currently links to a “Let’s Go Brandon” website that I don’t encourage you to visit because our own spam software blocks access to it on the stated grounds of “Risky-Sites.”

We’ve written about the regulatory risks of transmitting false EAS alert tones on multiple occasions (see here, here and here), with the most recent post being about a proposed $272,000 fine against CBS for an EAS tone that was briefly heard in an episode of Young Sheldon.  The principal issue in such circumstances is Section 11.45(a) of the FCC’s Rules:

No person may transmit or cause to transmit the EAS codes or Attention Signal, or a recording or simulation thereof, in any circumstance other than in an actual National, State or Local Area emergency or authorized test of the EAS; or as specified in §§ 10.520(d), 11.46, and 11.61 of this chapter.

In this case, since it was a live broadcast, it would be difficult for an affiliate to move quickly enough to spot and delete the tone before it aired.  Recognizing that this is often the case, the FCC has typically focused inquiries involving network programming on the network’s owned and operated stations rather than on the network’s affiliates.  However, that isn’t always the case, as the FCC has fined individual stations for Children’s Television rule violations even where those violations occurred in network programming.

So an affiliate’s natural reaction in such circumstances might be to lay low and let the network deal with any potential ramifications at the FCC.  However, that isn’t an option, as Section 11.45(b) of the FCC’s Rules states that:

No later than twenty-four (24) hours of an EAS Participant’s discovery (i.e., actual knowledge) that it has transmitted or otherwise sent a false alert to the public, the EAS Participant shall send an email to the Commission at the FCC Ops Center at FCCOPS@fcc.gov, informing the Commission of the event and of any details that the EAS Participant may have concerning the event.

That means remaining silent and hoping it all blows over isn’t an option once an affiliate becomes aware that it has transmitted a false EAS tone.  Section 11.45(b) requires stations to basically hold up their hand and volunteer to the FCC that they aired the tone, and the 24-hour time limit doesn’t give a station much time to contemplate it.  While the FCC and FOX will hopefully resolve any issues with the broadcast itself, stations don’t want to dodge that bullet only to expose themselves to an FCC claim that they failed to promptly report the incident.

Published on:

By

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Settles with Six Major Radio Groups Over Political File Violations
  • Texas Radio Stations Face Proposed Fines for Contest Rule Violations
  • $15,000 Fine Proposed for LPFM Station Airing Commercial Ads

Continue reading →

Published on:

By

Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Arkansas University’s Underwriting Violations Lead to $76,000 Consent Decree
  • Large TV Broadcaster Agrees to Pay $1.3 Million Over Predecessor’s Tower Compliance Problems
  • Recent Fine Cancellations Prompt Broadcasters to Double-Check Fees and Fines

A Word From Our Sponsors: Arkansas University Settles With FCC Over Underwriting Violations

The FCC recently entered into a Consent Decree with an Arkansas university for violating the FCC’s underwriting rules for noncommercial stations.  The university admitted that two of its FM stations aired announcements over several days in 2016 that impermissibly promoted the products or services of its financial contributors.  The two stations are operated by a community college under the University’s control.

Noncommercial educational (“NCE”) broadcast stations are prohibited from airing promotional announcements on behalf of for-profit entities in exchange for any benefit or payment.  Instead, NCE stations may broadcast announcements that identify but do not “promote” station benefactors.  Such messages may not, among other things, include product descriptions, price comparisons, or calls to action on behalf of a for-profit donor.  According to the FCC, these limitations “protect the public’s use and enjoyment of commercial-free broadcasts” and “provide a level playing field for the noncommercial broadcasters that obey the law and for the commercial broadcasters that are entitled to seek revenue from advertising.”

The FCC was tipped off to the violations when the licensees of several nearby commonly-owned stations filed a Formal Complaint outlining over a dozen announcements broadcast on the University’s stations.  The complainants alleged that these messages, which were aired on an ongoing basis in 2016, violated the underwriting rules by either including promotional statements or promoting specific products for sale.  Most of the announcements were sponsored by local businesses, including an announcement for a nearby car dealership described as “impressive with a very clean pre-owned model or program unit,” a furniture store that has a “good deal … going there” where listeners can get “pretty stuff,” and a local insurance agent offering services that he had “never done on radio before.”

The Enforcement Bureau responded to the Formal Complaint by issuing multiple Letters of Inquiry to the University seeking additional information about the announcements and the University’s underwriting compliance efforts.  In its response, the University admitted that the announcements had been simulcast on both stations, but emphasized that the stations’ staff had received “extensive” training on underwriting issues, and that it believed that the stations had complied with the underwriting rules.

To resolve the years-long investigation, the University agreed to enter into a Consent Decree under which the University agreed to: (1) pay a $76,000 civil penalty; (2) admit to violating the FCC’s underwriting rules; and (3) implement a five-year compliance plan to ensure there will be no future violations.

Tower Records: Predecessor’s Lax Oversight of Antenna Structures Leads to $1.3 Million Settlement for Large Broadcast Company

A large television broadcast company has agreed to settle an FCC investigation into whether the prior owner of several of the company’s towers failed to sufficiently monitor and maintain records regarding them.

Part 17 of the FCC’s Rules requires a tower owner to comply with various registration, lighting and painting requirements.  Tower marking and lighting is a vital component of air traffic safety, and noncompliant structures pose serious hazards to air navigation.  To this end, a tower owner is responsible for observing the tower at least once every day for any lighting failures or to have in place an automatic monitoring system to detect such failures.  The tower owner must also maintain a record of any extinguished or improperly functioning lights.  The FCC’s rules also require a tower owner to notify the FCC within 5 days of a change in a tower’s ownership.

In September 2018, a small plane crashed into a southern Louisiana broadcast tower, prompting an FCC investigation into the tower and its owner.  The FCC determined that the tower was registered to a subsidiary of a national broadcaster which at the time controlled over a dozen television stations and related antenna structures.  Following up on the crash, the Enforcement Bureau issued the company a Letter of Inquiry seeking information about its compliance with the FCC’s tower rules.  The company responded by disclosing numerous “irregularities” in its monitoring of the lighting systems of the toppled tower and nine other towers.  It also disclosed that it had failed to keep complete records of a dozen lighting failures at several of its towers, and that it had not notified the Commission of its acquisition of two other towers. Continue reading →