The Federal Communications Commission wants Comcast to cough up $20,000 in fines after initial agency probes found that the cable company’s CN8 local-news channel last year violated a sponsorship identification rule five times when airing video news releases with product promotion material.
Comcast, in yet another clash with the FCC under chairman Kevin Martin, reacted strongly, claiming the agency had no legal authority to regulate cable’s use of VNRs and even if it did, Comcast was innocent because it didn’t get paid to air the promotional videos at issue.
“The FCC’s preliminary findings are legally unfounded and factually distorted, as CN8 received no payment or benefit by using the material, which came from a legitimate broadcast media subscription service. We expect that our judgments will ultimately be vindicated,” Comcast senior director of corporate communications Sena Fitzmaurice said.
According to the FCC, TV stations and cable operators are required to identify sponsors that have paid for the exposure. Nonpaying sponsors do not need to be disclosed unless the broadcaster or cable operator uses the news-release material in a manner that places too much focus on product or brand names.
On five occasions in 2006, the FCC determined CN8’s handling of VNRs required disclosure, even though neither Comcast nor the regional cable network was paid by the sponsor. The FCC announced that it planned to fine Comcast $4,000 for each infraction, or $20,000 total. Comcast is expected to fight the rulings.
CN8’s alleged violations all occurred on the Art Fennell Reports program. The FCC said infractions occurred during video segments on Nelson’s Rescue Sleep; General Mills’ “Wheaties Fit to Win Challenge”; Allstate Insurance’s life insurance programs; Trend Micro Software’s “Remote File Lock”; and General Mills “Bisquick 75th Anniversary.”
The FCC issued its first ruling last Monday regarding the sleep-aid video and a second ruling last Thursday disclosing the other four fines. The agency said Comcast was liable because the conspicuous use of product and brand names in the releases was the equivalent of receiving payment, triggering the sponsor-identification requirement.
FCC member Jonathan Adelstein, a Democrat, issued a statement in support of the first fine: “Commission rules are clear: viewers have a right to know who is trying to persuade them so they can make up their own minds about what they are presented. I applaud Chairman Martin’s leadership, and look forward to quick action on the many other pending video news release complaints.”
The FCC acted in response to complaints filed against Comcast by the Center for Media and Democracy and Free Press. Complaints against dozens of local TV stations are pending action at the FCC.
Although Comcast insisted the FCC lacked authority over cable regarding the use of VNRs, the FCC disagreed, noting that it asserted jurisdiction over cable in a 2005 public notice.
All five of the FCC’s CN8 rulings stemmed from the same conclusion that VNR material had not been used in fleeting fashion.
For example, the FCC said the Nelson’s Rescue Sleep release contained “extensive images and mentions of the product and include[d] the statement that 'If you are one of the estimated 70 million Americans who have trouble sleeping — Rescue Sleep may be what you’re looking for.’ ”
The FCC went on to explain that it did not “believe that this type of promotional material, furnished by a product manufacturer, can or should be considered within the scope of the [exemption], which is directed to material that contains only fleeting or transient references to products or brand names.”
The rulings were handed down by the FCC’s enforcement bureau.
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