Late last month, the Federal Communications Commission entered into a consent decree with the Pacifica Foundation, resolving allegations that Pacifica's radio station, WBAI-FM, violated the FCC's sponsorship identification rules as well as its underwriting requirements.
Under FCC Rules, broadcasters are required to identify on-air the sponsor of any paid program material that they broadcast. As the FCC has explained, these rules are "grounded in the principle that listeners and viewers are entitled to know who seeks to persuade them."
Noncommercial educational stations, such as WBAI-FM, get special benefits – such as lower regulatory fees – in recognition of the fact that they are non-profits. In exchange for those benefits, however, these stations are not permitted to broadcast commercial advertising, which is defined essentially as paid programming that is intended to "promote any service, facility, or product" of a for-profit entity. Even though commercial advertising is not permitted on these stations, sponsors of the stations may receive on-air acknowledgement of their support. Importantly, though, those acknowledgements should be for identification purposes only and may not promote the sponsor's products, services, or businesses.
So, what were the allegations against the station? According to a petition filed with the FCC, WBAI-FM's on-air personalities promoted their own products – such nutritional supplements and conferences – in violation of the FCC's underwriting laws and without disclosing that they were broadcasting paid programming.
As part of the consent order, Pacific admitted liability, agreed to implement a compliance plan to ensure that its broadcasts are legally-compliant in the future, and paid a small civil penalty.
For marketers, this enforcement action is an important reminder that when buying commercial time on a broadcaster, or otherwise paying to have material broadcast online, you must properly disclose that you were behind the broadcast. And, when buying sponsorships on public stations, this action is a reminder that there are significant limitations on what kinds of messages can be included in sponsorship announcements.
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.