Interruption of regular programming might be permitted without prior waiver; reporting, certification requirements also in play
The Commission is asking whether noncommercial educational (NCE) radio and TV stations should be routinely permitted to interrupt their regular programming for fundraising activities for the benefit of any non-profit entity other than the station itself. The proposal is in response to a study published last June by the FCC’s Working Group on Information Needs of Communities.
Historically, because of their noncommercial nature, NCE stations have been prohibited from breaking into their regular programming for extended third-party fundraising even when the entity to be benefited was itself non-profit. (PSA’s and brief paid-for underwriting announcements are OK.) While sometimes an extraordinary need for such fundraising might arise – relief efforts in the wake of Hurricane Katrina, for example, or the Japanese earthquake/tsunami, or the Haitian earthquake – in such circumstances the Commission has been willing to waive the rule (which, technically, appears in Section 73.503(d) (for radio stations) and 73.621(e) (for TV stations). But such waivers have been limited to “a specific fundraising program or programs, or for sustained station appeals for periods which generally do not exceed several days.” And waivers are not invariably granted. (Case in point: Back in the 1970s a proposal to run an on-air auction to benefit a financially-distressed local symphony orchestra was nixed by the Commission.)
Lurking in the background of the latest proposal is the FCC’s apparent discomfort with the amount of air time already being devoted by NCE stations to begging for bucks. That factor is a primary reason for the existing limitation on third-party fundraising efforts. (One question the Commission poses in its Notice of Proposed Rulemaking (NPRM): Just how much airtime do NCE stations actually spend on fundraising?)
Any relaxation of constraints on third party fundraising would likely be limited.
The NPRM suggests that the FCC might allow only one percent of a station’s annual air time to be devoted to third-party fundraising – a cap that could be applied to all digital program streams for TV (although, oddly enough, the FCC seems to forget about multiple streams on digital FM stations). The length of each individual fundraising program might be limited. The Commission also asks whether such programs should be produced by the station itself (rather than the third party benefiting from the fundraising), and whether the beneficiaries should include only organizations local to the station’s service area and/or organizations with a Section 501(c)(3) exemption from the IRS.
The NPRM says that one of the motivations underlying possible relaxation of the fundraising restrictions is the “need to remove unnecessary burdens on broadcasters who aim to serve their communities”. Of course, imposition of a new requirement that such extended fundraising be station-produced or limited only to certain qualifying organizations hardly suggests “removal” of burdens, but maybe that’s just us. And then, there are the reports.
The NPRM suggests that NCE stations might be required to file reports, annually, to let the Commission know, for each fundraiser:
- the date and time of the fundraiser;
- the name of the non-profit entity benefited by the fundraiser and whether this entity is a local organization;
- the specific cause, if any, supported by the fundraiser;
- the type of fundraising activity;
- the duration of the fundraiser; and
- the total funds raised.
And as long as reports might be filed, why not also require that they be placed in the station’s local public inspection file, too? That would, the Commission supposes, “help to ensure that the public has access to information about how NCE broadcasters are serving the public interest and their local communities”. (Don’t worry – the Commission assures us that it doesn’t “believe that filing such reports would be unduly burdensome”.)
And over and above the reports, the Commission suggests that it might be inclined to include, on the license renewal application form, a new certification requirement relative to compliance with third-party fundraising limits.
So much for “removing unnecessary burdens”.
The FCC is itself limited in its ability to regulate in this particular area. The First Amendment of your friendly U.S. Constitution, for example, limits governmental restrictions on speech based on the content of programming and the identity of the speaker. And Section 399B of the Communications Act prohibits a noncommercial station from accepting funds to express the views of any person with respect to any matter of public importance or interest or to support or oppose any candidate for political office. That cuts out fundraising for issue-oriented or political organizations in most states. (While the U.S. Court of Appeals for the 9th Circuit has struck down this part of the 399B restriction, the FCC says in the NPRM that it plans to honor that decision only in states located in the 9th Circuit, once the Court’s mandate becomes effective.)
On the other hand, Section 399B restricts only programming for which a station receives consideration; it does not stop a station from broadcasting political material as a free public service, as long as the station doesn’t editorialize in its own name.
Then there’s the Corporation for Public Broadcasting (CPB), which requires CPB-funded stations to devote the substantial majority of their daily program hours to CPB-qualified programming. Such programming is defined as “general audience programming that serves demonstrated community needs of an educational, information, and cultural nature.” Fundraising for third parties will not likely be popular if it threatens a station’s CPB grant.
So in the end, any relaxation of FCC-imposed limits on third-party fundraising may benefit only religious, student-operated stations, and the handful of community stations that do not receive CPB funding.
The proposed relaxation is not necessarily endorsed by all the stations it would affect. For sure, some NCE stations may be attracted by the public service opportunities the relaxation might provide. But other licensees prefer the present rule, which enables them to turn down requests for fundraising by blaming the FCC’s prohibition, which effectively ties their hands. If the rule is lifted, licensees can probably expect a barrage of such requests, followed by PR headaches (e.g., hard feelings and criticisms) when some (or all) of those requests are rejected.
And here’s a tip to anybody who might view fundraising as a potentially lucrative revenue opportunity: beware the recent KUSF case, which indicates that NCE stations selling program time are not supposed to be paid more than their expenses.
The NPRM has been published in the Federal Register. If you have something to say in this proceeding, comments are due by July 23, 2012, with reply comments due by August 21.