The FCC has fired a warning shot at noncommercial broadcasters that they need to hew to the rules on sponsorships.
That came in a settlement with Cesar Chavez Foundation over what the FCC said were impermissible advertisements for for-profit products on a pair of Foundation-owned radio stations: KNAI-FM in Phoenix and KUFW-FM in Woodlake, Calif.
Underwriting rules allow for on-air acknowledgements of for-profit donors, but only up to a point. The FCC says the foundation crossed the line including product comparisons (“There are times that we fear going to see cars because we don’t know who to trust. You can trust the Bill Luke car dealership”); price information and calls to action action (“Are you ready to buy a house? Want to know if you qualify?”), all of which are prohibited.
According to the settlement, the foundation will "pay a $115,000 penalty, adopt a rigorous compliance plan to prevent future violations of FCC rules, and," likely most important, "observe a one-year moratorium on seeking or accepting underwriting from for-profit entities."
"While an NCE licensee may broadcast underwriting announcements identifying entities that donate to the station by name, such announcements may not promote an entity’s businesses, products, or services," the FCC Enforcement Bureau said.
The FCC warned that the longer a sponsorship credit goes, the more likely it is to cross the line into prohibited advertising rather than simply identification as the rules require. But, the bureau added: "At the same time, however, the Commission has acknowledged that it is at times difficult to distinguish between language that promotes versus that which merely identifies the underwriter. Consequently, the Commission expects that licensees exercise reasonable “good faith” judgment in this area and affords some latitude to the judgments of licensees who do so."
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.