Broadcast Renewal Trifecta: Improper "Menu" Underwriting Announcements, "Renewal Expectancy" . . . and Chesterfields!

Staff renews NCE-FM license – but not before fining the licensee for including too much detail in underwriting announcements, admonishing it for overly relying on PSA’s, and referring it to the Department of Justice for cigarette advertising!

A relatively obscure Audio Division decision involving the renewal application of a noncommercial educational (NCE) “community” radio station in Batavia, Ohio hits the trifecta. It sheds interesting (if not entirely illuminating) light on the standards governing noncommercial underwriting practices. It touches on the apparently-forgotten-but-not-gone question of the adequacy of nonentertainment programming performance for renewal purposes – an area of potentially vast consequence to all broadcasters. And as an extra bonus, it reveals the FCC’s current regulatory take on cigarette advertising.

There’s something for everybody here. Not all of it, though, makes much sense.

The case arose when a presumably disgruntled former officer of the licensee filed an informal objection directed to the station’s license renewal application last year. According to the complaint, the station had violated the prohibition against airing “commercials” on at least three occasions. Further, during the last five months of the license term, the station had broadcast no issue-responsive programming other than some PSA’s aired between midnight and 5:00 a.m. At least that’s what the complainant claimed. The Division has now granted the renewal, but not before running the licensee through the wringer several different ways.

NCE underwriting practicesThe FCC, of course, has developed a byzantine approach to noncommercial underwriting. (If you’re new to the field, check out this post for some possibly useful background information.)  The complainant’s concerns about the station’s underwriting practices boiled down to a total of three particular announcements. 

One, involving a promotion for an upcoming bluegrass concert, described one of the concert’s featured acts as having been “voted Canada’s #1 Bluegrass Band”. The Division concluded that the reference to the band’s supposed “Number 1” status constituted a “comparative” mention which, in the FCC’s eyes, is promotional and, thus, prohibited. (Of course, for the phrase in question to be “comparative”, logically there should be at least one other bluegrass band in Canada – the Division seems willing to assume that there is such an animal.)

This aspect of the decision is pretty much in line with earlier FCC cases, so it shouldn’t surprise anybody, even if it does seem a bit silly – particularly since, as the licensee asserted, the band in question really had been voted Canada’s Number One Bluegrass Band. According to the Division’s opinion, “the ‘factuality’ or ‘truth’ of the text of an [underwriting] announcement is irrelevant” to the determination of whether or not the announcement is “promotional”.   

So all of our NCE readers should be sure to make a note: no references to “Number One” in your underwriting announcements, even if you can prove that those references are true.

The other two questionable announcements involved what the Division now refers to as prohibited “menu” listings of the underwriter’s goods or services. One announcement read, in its entirety, as follows:

Underwriting by [name and address of company], featuring custom metal roofing, siding, hardware, trim, insulation, trusses, and perma felt paper. Information at [website and phone number].

The second announcement was similar in its relative brevity:

Programming on WOBO is underwritten by [company name], featuring bulk and bag mulch, peat moss, potting soil, bulk top soil and decorative borders. They also feature pickup and delivery. [Company name, address and phone number].

Pretty innocuous, huh? Not so, said the Division. Both announcements constituted “excessively detailed menus of multiple product/service offerings by underwriters [which] exceed the type of information that would enable listeners to identify supporters of noncommercial programming.” 

And how did the Division reach that conclusion? According to the decision, both announcements were “similar” to “promotional broadcasts” that had been the subject of earlier fines. But the Division pointed to only one such earlier case. There, the objectionable announcement read as follows:

[Company name], an established dealer in central Florida for the past ten years, sponsors the “Latin Power” and offers the services and systems from Dish network with a 100% digital signal on audio and video, and more than 30 channels in Spanish, such as “TV Colombia,” “Telemundo,” “Galavision,” “Deportes,” “FOX,” “ESPN,” “Cadena Sur,” “TV Azteca,” “TV Chile,” “Tele Gol,” “Univision,” and “Playboy” in Spanish, included in the Hispanic package. Spanish movie channels twenty-four hours and others with classic movies like “Cine Latino,” and “TV Colombia.” Also, local channels and all the Dish Network channels. Premium channels included on additional plans. [Company name]. Business hours from 9:00 a.m. until 9:00 p.m., seven days a week. Installation services in twenty-four hours. Information [phone numbers].

Maybe we’re missing something, but that precedent sure doesn’t look “similar” to the two announcements at issue here. 

For one thing, the announcement the Division cites was, as a whole, about four times longer than either of the two. And if we’re counting specific “menu” items, the cited precedent racks up at least 14 separate mentions (of different Spanish-language channels), and that’s before you get to the various other elements of the underwriter’s services being promoted (e.g., “100% digital signal on audio and video”, “local channels”, “all Dish Network channels”, “Premium channels”, “Installation services”, etc., etc.). By contrast, the two announcements at issue in the latest Division action mention seven and eight separate items, max.

So the Division’s decision – which spanks the licensee with a $3,000 fine for the three “commercials” – appears to establish a new and tighter standard for “menu” listings in underwriting announcements.  Henceforth, NCE stations should be careful to limit such listings to fewer than seven separate items, or run the risk that the announcements will be deemed “promotional”.

“Renewal Expectancy”. The complainant claimed that, during the last five months of the license term, the station broadcast no “issue-responsive programming” other than some PSA’s between midnight and 5:00 a.m. The licensee appears to have conceded the accuracy of that claim.

The Division properly concluded that the complainant’s allegations did not warrant denial of the license renewal. But the Division still insisted on wagging its regulatory finger menacingly at the licensee:

[W]e remain concerned that during the last six months of the license term, and even after initiation of improvements, 100 percent of Licensee’s issue-responsive programming was in the form of PSAs. . . . Although PSAs can be an effective means of meeting community needs, and may be particularly useful to NCE stations on a limited budget, we have cautioned licensees not to rely on PSAs as the primary method of responding to ascertained needs because they are too brief to address community issues in any depth. [Footnotes omitted]

Bottom line: The licensee was “admonished” for its “reliance solely on public service announcements, primarily during nighttime hours, to respond to community needs during the last six months of its license term.”

There are at least two problems with this aspect of the Division’s decision.

First, as the decision candidly acknowledges, the FCC has historically not disqualified any renewal applicant because either (a) it relied “primarily” on PSAs or (b) its “public service programming” dropped off at the end of the license term. At most, also as the Division acknowledges, such performance deprived the licensee of a “renewal expectancy”. Younger readers will be forgiven if they’re not familiar with that quaintly archaic phrase. The notion of a “renewal expectancy” for broadcasters arose in the 1970s in connection with the comparative renewal process, a process which was legislated out of existence nearly 20 years ago. (Ask one of your older communications lawyer friends if you’re curious about it, but brace yourself for a series of war stories.) 

Since 1996, “renewal expectancy” hasn’t been on the regulatory radar as far as the vast majority of broadcasters are concerned, so it’s more than a bit odd to see the Division trotting it out now.

The Division’s reference to that long-gone factor may be a symptom of the second problem here. That is, while the Division seems to want to chide the licensee for its supposedly deficient programming performance, the Division has absolutely no regulatory basis for doing so.

The fact is that neither the Communications Act nor the FCC’s rules require that any broadcaster provide any particular quantum of any particular type of programming addressing any particular subject matter. For sure, since its inception in 1935, the Commission has occasionally considered trying to impose some content-based programming requirements – but each time it has stopped short of doing so. And even the indirect approach it ultimately adopted back in the 1960s and 1970s was abandoned in the mid-1980s, leaving the Commission with no effective means of imposing such a requirement even if it wanted to. (Those interested can find a reasonably detailed history of the FCC’s efforts in a law review article available here, or in comments we filed with the Commission six years ago, available in three pieces, here, here and here.)

In other words, the Division’s admonishment is about 30 years too late and amounts to little more than (in the Bard’s words) “sound and fury, signifying nothing”. Still, it should be of concern to all broadcasters that anybody in the Media Bureau (or elsewhere in the Commission) may think it appropriate in this day and age even to hint that the quantity and scheduling of a licensee’s “issue-responsive” programming might affect its chances of renewal.

Chesterfields. Finally, the Division’s decision addresses a truly arcane question: When an NCE station broadcasts recordings of classic radio programs that happen to contain ads for cigarettes, what – if anything – is the FCC to do? The station did happen to air such recordings – featuring ads for Chesterfields – a fact brought up by the complainant and conceded by the licensee.

Since the licensee wasn’t getting paid to broadcast the old-time programs, the airing of the Chesterfields spots did not technically constitute prohibited commercial activity, so the licensee was off the hook on that score. 

But hold on – as we all know, the broadcast of cigarette advertisements has been unlawful for decades. And even if the licensee in this case was not intentionally trying to promote the sale of Chesterfields, the fact is that the announcements embedded in the old-time programs constituted prohibited cigarette ads. So said the Division. But, according to the Division, when this kind of thing is brought to the FCC’s attention, the Commission’s only role is to notify the Department of Justice about it. DoJ can then decide whether or not it wants to prosecute for violation of 15 U.S.C. §1335. Once the FCC has notified DoJ, the FCC’s involvement with this particular allegation is at an end.  So the Division sent a copy of its decision to DoJ, allowing the Division to close the books on this case.

And what are the chances that the folks at Justice will send in the SWAT teams because of the Chesterfield ads? We can’t say for sure, but given the number of infinitely more urgent issues confronting DoJ, we’d like to think that the licensee here need not worry further about its Chesterfield ads.

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Comments (1) Read through and enter the discussion with the form at the end
Victor Aronow - April 25, 2013 8:33 AM

Harry:

Thanks for the interesting note and commentary about our nattering old uncle who sits in the corner and mutters under his breath about the "good old days." Seriously, of all the government agencies that I deal with in my law practice, the FCC, at least in the area of NCE regulation, is probably one of the most erratic, unpredictable, and opaque. Where has the whole idea of reasonable regulation gone when one can say, with a straight face, "OK, seven items on a list is OK, but eight is too many." I would be the first to concede that the Media Bureau is understaffed and over worked, but that is really no reason to pull out a regulatory fossil in order to hit someone with a fine or an admonition. I often wonder what would happen with some of these rulings if there were a pro bono "defense" bar that would take decisions like this up for review.

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