The FCC's Media Bureau recently issued three orders separately admonishing three television broadcasters in Louisiana, North Carolina, and South Carolina for their failure to adhere to the requirement that broadcasters not discriminate in the sale of advertising time and include in all advertising sales contracts statements informing their ad buyers of their policies against discrimination.
The orders arose out of the bureau's review of the television stations' license renewal applications. The FCC requires all radio and television stations to include nondiscrimination clauses in their advertising sales agreements, and a certification is required in stations' license renewal applications that the station's advertising sales agreements do not discriminate on the basis of race or ethnicity and that all such agreements held by the licensee contain nondiscrimination clauses.
In these three cases, as no evidence of actual discrimination was shown, the bureau did not impose monetary fines. But the bureau warned that future failures to include nondiscrimination clauses in such agreements could result in fines and, in the case of the Class A stations, a downgrade to LPTV status.
The FCC's nondiscrimination clause requirement was set forth in an Enforcement Advisory reminding all broadcasters that they may not honor "no urban, no Spanish" prohibitions imposed by certain advertisers who did not want their products advertised to minority audiences. The policy requires that buyers of advertising time certify in stations' sales contracts that they are not buying time with a discriminatory intent. The policy also requires stations that use advertising rep firms or other sales agents to ensure that the agents have nondiscrimination clauses in the contracts they use to sell the stations' ad time. In contexts where broadcasters have no formal advertising contracts and ads are booked through emails or phone calls or through programmatic sales platforms, industry practice has been to include the nondiscrimination clause in whatever exchanges form the agreement, e.g., emails, rate cards, Ts & Cs governing the ad sales, or other communications between the station and the advertiser.
Although the FCC has not specified the text or format of the required nondiscrimination clause, it should generally provide that the broadcaster is not discriminating in the sale of ad time and the advertiser is not purchasing ad time with an intent to discriminate. The certification should be along the lines of the following:
"This station does not discriminate in the sale of advertising time and will not accept any advertising that is placed with an intention to discriminate on the basis of race, national origin, or ethnicity. Advertiser hereby certifies that its purchase of broadcasting air-time is not intended for a discriminatory purpose and that Advertiser's decision whether to place advertising on this or any other station is not based on race, national origin, or ancestry."
In addition to obtaining this certification and including the required nondiscrimination clause in their contracts, broadcasters also must exercise reasonable diligence to make sure that advertising is not being purchased for discriminatory purposes, i.e., if any red flag appears in the course of an ad sale, the broadcaster needs to investigate whether there is a discriminatory intent and, if there is, reject such advertising.
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