Articles Posted in Noncommercial Operation

The Office of Management and Budget is currently considering whether to approve a revised version of FCC Form 303-S, the “Application For Renewal of Broadcast Station License” that all commercial and noncommercial full-power radio and television stations will be required to use when they file for their next renewal of license. The FCC has made several modifications to the prior version of the form.

One of the modifications is a new renewal certification which will constitute a material representation to a government agency. For that reason, every renewal applicant will want to be doubly sure that it has a reasonable, good faith basis for responding to the certification with an unqualified “Yes” and adequate documentation to support such response. Specifically, the revised renewal form seeks a “Yes” or “No” response to the new certification that the licensee’s “advertising sales agreements do not discriminate on the basis of race or ethnicity and that all such agreements held by the licensee contain nondiscrimination clauses.” According to the FCC, this new certification is needed to combat “no urban/no Spanish dictates” that have turned up in some broadcast advertising arrangements. The FCC believes that those “dictates” discriminate against broadcast stations which target African American and Hispanic audiences and the businesses they support.

When it adopted the “nondiscrimination clause” requirement, the FCC chose not to provide specific, or even illustrative, language to be included in advertising contracts. Such language would have given applicants a better idea of what the FCC actually believes qualifies as an adequate “nondiscrimination clause.” As a result, licensees have been left to rely upon their own interpretations of what constitutes compliance.

One question of interpretation relates to the scope of the nondiscrimination clause: is it adequate if only two types of prohibited discrimination are identified, namely race and ethnicity, or must the clause include all other types of discrimination prohibited under federal, state and local law? We know that the rule making from which the nondiscrimination clause arose focused only on “no urban/no Spanish dictates,” and that the FCC’s later issued “Erratum” substituted “ethnicity” for “gender” without retaining “gender.” From this it can be argued that the FCC did not intend to require stations to include in their nondiscrimination clauses other forms of discrimination prohibited by federal, state and local authorities, although stations are free to include them.

Additional interpretation is required to answer this question: is the nondiscrimination clause sufficient if each sales contract in effect proclaims (i) that no advertiser may use the station to discriminate on the basis of race or ethnicity and (ii) that any contract entered into with an advertiser whose intent is to use the station to unlawfully discriminate shall be null and void? Or must the nondiscrimination clause also include from the advertiser some type of certification or representation to the station disclaiming any intent to discriminate on the grounds of race or ethnicity? It is my experience that the approaches used by stations vary considerably. That fact may suggest that there are a number of interpretations that may be regarded as reasonable.

The third instance requiring interpretation relates to those stations that do not use formal sales contracts: how are they expected to comply with the nondiscrimination clause requirement? The answer to this question will turn on how flexible the FCC intends to be. We know that noncommercial educational stations filing their license renewal applications will not be asked to respond to this particular certification because such stations do not “sell” time, although they do enter into on-air and production relationships with their underwriters. Certainly a starting point for commercial stations that do not use formal sales contracts is to ensure they can adequately demonstrate to the FCC that their advertising sales arrangements with third parties in fact alert such parties to the station’s nondiscrimination policy and do not discriminate on the basis of race or ethnicity, e.g., website postings, standard email disclaimers, invoice/statement disclaimers.

The three questions posed above are not intended to deal with all of the issues raised by the new renewal certification. My observation is that if the FCC had been more clear when it adopted the nondiscrimination clause requirement, licensees would be able to make a more informed judgment in deciding whether they may responsibly respond to the new certification requirement with an unqualified “Yes,” or whether they will be required to answer “No” with an explanation, understanding that a “No” answer will likely result in the licensee’s application being pulled out of line and deferred for further scrutiny. Stations should consult with communications counsel now to assess whether, based on current practices, they will have a reasonable basis to respond “Yes” to the new renewal certification when it comes time to file their application for renewal of license.