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How to avoid breaking the FCC’s ridiculously lenient rules against non-commercial radio advertising

It never ceases to amaze me that some public radio stations continue to run afoul of the Federal Communications Commission’s sieve-like rules against running advertisements, but they do. The latest station to wrangle with the Commission on this matter is religious non-profit WKSG-FM in Cedar Creek, Florida, run by Daystar Public Radio. WKSG seems like a nice little signal that broadcasts high school sports and various kinds of Christian Rock fare. But it just signed a consent decree with the FCC, promising to pay the Treasury $3,500 and submit to a compliance plan in which the outlet will finally get the agency’s absurdly light thou-shalt-nots straight and sin against them no more.

This isn’t the first time WKSG has gotten into hot water with the Commission. Back in 2002 the FCC issued an admonishment against the station for running ads. The signal acknowledged, the FCC wrote:

“that it broadcast a seventeen-minute interview with the proprietor of for-profit EZ Access Transporters, Inc., during which the station announcer solicited investment funds to assist the newly founded company in producing its product, the EZ Tilter Platform. Moreover, Daystar acknowledges that the announcements, ‘as a whole,’ do not comply with . . . the pertinent Commission policies and rules.”

Look, this stuff isn’t rocket science. Your listener supported, non-profit station can’t run “commercials” or “advertisements.” But those words are in quotes because, as you’ll soon see, you can run on-air spots that pretty much look, walk, and quack like ads, they just have to stay within certain bounds

An “utter failure”

Section 399B(b)(2) of the Communications Act makes the policy clear: “No public broadcast station may make its facilities available to any person for the broadcasting of any advertisement.” The statute defines “advertisement” as a message or program that is broadcast in exchange for remuneration and that promotes

  • “any service, facility, or product offered by any person who is engaged in such offering for profit”
  • or advocates the views of a given person on some matter of public interest
  • or takes a stand on a candidate for public office

The FCC enforces these rules, sometimes. Here are two less recent cases:

In 2004 the hammer came down on Christian non-commercial station WCVZ(FM) in South Zanesville, Ohio. A year earlier the station received remuneration to run announcements on behalf of a station underwriter. The underwriter, Barnes Advertising, promoted the station on local billboards in exchange for the on-air notices.

The Commission took particular exception to the spots because they tried to distinguish the advertised service from the competition “by directly stating or implying that they offer superior service or products.” The announcements also urged listeners to patronize the business, a major naughty to the FCC.

Plus the agency estimated that WCVZ ran the spots over 3,000 times over a 15 month period, “indicating an utter failure of licensee practice and policy concerning its underwriting compliance responsibilities,” the FCC’s December 6, 2004 Notice of Apparent Liability concluded.

The Commission fined WCVZ $20,000 for the violations.

More recently, a party complained about illegal advertising on low power non-profit FM station KFLO in Jonesboro, Arkansas. KFLO had filed for an FCC construction permit, and the complainant asked that the permit be blocked.

The FCC reviewed the complaint and found valid some of the concerns. Announcements on behalf of three companies — S&T, C.J. Watkins Construction, and EchoQuest — ”included references that encouraged business patronage, referred to prices, and portrayed the underwriter “in a comparative and qualitative manner:”

“The C.J. Watkins Construction Company announcement impermissibly induces patronage of the underwriter’s business by advertising that ‘all completed work comes with a full warranty.’ Finally, the Echoquest announcement extols the ‘The Fresh Air’ as an ‘advanced air system’ which utilizes ‘state-of-the-art technology to create a more efficient way to keep you free of smoke and odor’.”

But the FCC’s November 2005 decision on the matter commended KFLO management for quickly rectifying the problem by removing the offending ads and taking further steps to ensure future compliance. The Commission let the station off with an admonishment, and authorized the construction permit to go ahead.

In addition, the FCC noted that most of KFLO’s underwriting spots stayed within acceptable limits. “Specifically, the announcements briefly describe their underwriters’ products or services in generic, value-neutral terms, and list business addresses and telephone numbers, consistent with the identification-only purpose of underwriting announcements,” the Commission wrote.

Value neutrality

When did these sort of spots become acceptable? Quite a while ago, actually. In March of 1984 the FCC relaxed its non-commercial policies regarding public radio stations to “enhance the scope of donor and underwriting acknowledgements,” as the agency put it. Stations could now include on-air thank yous that include:

  • slogans and logos that “identify and do not promote”
  • the location of the underwriter
  • “value neutral” descriptions of products and services
  • brands and product services and trade names

It appears that, for the FCC, the three big violations of Section 399B are announcements that include pricing information (eg, “Just 49.99! Buy now!”), calls to action (“Come on down and take a test drive!”), and special inducements to buy (“Subprime loans available for a limited time only!”).

On their advisory page, the FCC lists the following underwriting notice as objectionable:

Production [of the program] has been made possible by grants from: A&J Luxury Limo Service. For a fabulous night on the town, spoil yourself or a client with a relaxing and comfortable evening in one of A&J’s luxurious limousines featuring a retractable moon roof, color television, stereo, cellular telephone, intercom and wet bar. For the perfect way to enjoy a perfect and safe evening, call us at 360-8444.

This acknowledgment clearly violates the “call to action” prohibition and probably goes over the line on the “inducement” no-no. But I’ll bet that you wouldn’t get into any trouble if you just shortened the blurb to “Production [of the program] has been made possible by grants from: A&J Luxury Service, bringing posh transportation to the Anytown community since 1977 . . . ”

So welcome to the wonderful world of “enhanced underwriting.” You don’t need to be a Supreme Court lawyer to see that you can run all the ads you like on your “public” radio station, just skip prices, exhortations, and specific inducements, and you’re cool. Of course, the question of what makes your signal substantially different from the commercial station three notches to your left or right is another question. That’s up to you to ponder on Sunday.



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3 Responses to How to avoid breaking the FCC’s ridiculously lenient rules against non-commercial radio advertising

  1. Dave March 6, 2010 at 11:59 am #

    What about when the ad is actually said by the person speaking and not recorded? I know of a new education station here that runs the legislative hearings and engages in political activities….

  2. Matthew Lasar March 7, 2010 at 8:46 am #

    Dave:

    Spoken ads fall under the jurisdiction of these rules. And that goes triple for UK radio stations.

    As for “political activities,” non-profits can’t endorse candidates, of course. But NCEs can editorialize; see FCC vs. Women’s League of Voters. So it all depends on what you’re talking about.

  3. Jerry April 15, 2011 at 3:40 pm #

    Also critical to this is whether the announcement is actually involved in compensation to the station (or programmer…which gets involved with the payola or plugola rules). If there is no compensation, there is no violation of this particular rule. Thus an announcer might be in an interview with someone and that person actually mentions that they are having a sale, or the qualities of a product. If that person did not provide remuneration (or items to the station) in exchange for this plug it passes the test. Public service announcements run without regard to compensation can have promotional language.

    Another exception is when the announcement is for the benefit of the station itself. Thus products being offered as premiums for contributions can be discussed and donors thanked. Thus in a fundraiser for the station these sorts of announcements are allowed.

    But an actual fundraiser for another entity cannot occur on the air. A substantial amount of time involved in raising money for non-station entities seems to be against FCC regs. Thus religious stations can’t run fundraising for “the Church” but only for the actual station operating expenses. A college station could not have an on-air fundraiser for the University. The licensees are not supposed to monetarily benefit from owning the non-commercial station. Ironically a commercial station COULD, and does. Furthermore a commercial station is actually encouraged to fundraise on-air for Non-Profit NGO’s – this is considered public service. Weird…and contradictory.

    And Church organizations (and others) should be careful about selling time to ministers (or others) that raise money on air for their own benefit. This gets back into the payola/plugola rules. But an employee or programmer should not be profiting personally by their presentation of on-air material on an Non-Comm. Station.

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