FCC Enforcement Action Against Sponsorship ID Violations Seen Sending Message
FCC rules on sponsorship identification are mostly clear, but can get complicated in some areas, said broadcast attorneys in interviews this week. The commission’s latest enforcement action, a $44,000 fine to Cumulus Media for the sponsorship identification violation at WLS(AM) Chicago (CD Feb 11 p17), is an indication of the commission’s concern, they said.
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Sponsorship ID rules are generally simple and pretty easy to follow, said Jon Markman, a Fletcher Heald broadcast attorney. “If somebody pays you money to put something on the air, you have to tell people that they've done that.” Over the last few years, the FCC has indicated it’s interested in situations that are a little more complicated, like product placement, Markman said. “Product placement can get complicated for broadcasters, in part, because they aren’t necessarily the ones producing the content and because they're not necessarily the ones getting the money."
In some situations, the rules can get murky, said Robert Folliard, a Cooley attorney who represents commercial broadcast stations. “It’s not entirely clear where the line falls in certain areas, especially when material is provided to a station for free.” Essentially the FCC’s rule is that a broadcaster has to disclose an announcement as “sponsored” if it provides too much coverage of the entity that provided it, he said. “It’s when you get something for free that also happens to promote the person that provided it to you then it becomes a much trickier analysis."
The FCC cited 11 announcements on WLS. The announcements were information program material, “each related to a state legislative issue impacting the local economy of Chicago,” said the forfeiture order approved by commissioners and released Monday (http://bit.ly/1ddC8kh). The base forfeiture amount in this case “considers the eleven broadcasts as eleven violations, not a single violation,” it said. “In appropriate instances, the commission may reduce a forfeiture if a licensee has voluntarily disclosed its conduct or taken corrective measures to remedy its conduct before an investigation.” The licensee resumed compliance with the sponsorship identification rules “in subsequent broadcasts of sponsored material, although it did not voluntarily disclose the violations to the commission,” the FCC said. Cumulus had no comment.
There have been very few fines like this one issued, Markman said. “It’s hard to know how common this is in practice,” he said. “Generally speaking, when you consider the number of broadcasters and the amount of content that’s being broadcast and amount of that content that’s being paid for, the vast majority of that is fully in compliance and there is no question that they're following the rules.”
Commission staff likely wanted to send a message that it’s an important area that they are looking at, Folliard said. With 11 commercials at a penalty of $4,000 each, “it adds up quickly and I think that’s the effect the staff had intended,” he said. If it’s on the air and it’s being paid for by someone else, viewers have a right to know that, “and larger fines will lead to more awareness in the broadcast industry,” Folliard said. The FCC doesn’t want the audience to be deceived, Markman said. “That’s why they're looking at issues like product placement and video news releases,” he said. “The reason the sponsorship ID rule is in place in the first place is that the FCC doesn’t want a viewer to be watching the news or listening to the radio and hear something and think that’s been produced by an unbiased reporter when, in fact, it’s on the air because someone paid them to put it on there."
Broadcasters can take steps to avoid committing such a violation and avoid getting hit with a fine that exceeds the $4,000 base, the attorneys said. If stations find they've made a mistake by running a spot without labeling it, they should tell their viewers and clarify that, Markman said. “The rules don’t indicate that would necessarily help, but the FCC doesn’t want to penalize broadcasters,” he said. “If they get an indication that some of the damage has been remedied and the broadcaster is trying to follow the rules, there’s a good chance that they're going to take that into consideration.” It’s a very fine line and certainly not always clear, Folliard said: “If you're going to run it a couple times in a newscast, instead of looking at a $4,000 fine, you might be looking at $16,000 to $20,000 if you guess wrong.”