We're going to be offering a primer of the SEC guidelines today, as well as building in some time for your specific copy questions and any questions relating to recent developments from the FCC.
As it relates to our sponsor and process. A reminder that this webinar will be mostly radio heavy as PBS offered a TV centric webinar compliance webinar yesterday.
Many of you know Brad Deutsch, our speaker for today. Brad is office managing director and principal with Foster Gar VPC.
Brad is Greater Publix FCC attorney and serves in this role for many local stations in the system. Before I turn it over to Rod to get things started, a couple of quick housekeeping notes. First, yes, we will be recording the webinar and it will be available for on-demand viewing no later than tomorrow, along with the slides for today. We will also be posting and emailing you additional copy-related resources from Greater Public. We have a very large crowd today. So if your specific questions for Brad, so if you have questions, I should say, please use the Q&A tab versus the chat. Sometimes questions posted in the chat can get lost with a lot of chat going on.
So please use the Q&A tab. We will do our best to get to as many questions as we can, but with such a large crowd, it is unlikely we will be getting to all of them.
If yours is not selected, you can always follow up with me directly after the session. And with that, I will turn it over to Brad to get things started. Brad, over to you.
On the one hand, I'm very happy to be with everyone today.
I'm always happy to go through this presentation. On the other hand, I wish we weren't here today. So to kind of jump right in, you know, and why we're here and why there's been so much interest in this.
Exactly three weeks ago today, the new chairman of the FCC, Chairman Carr.
Sent a letter over to PBS and to NPR. And the litter's not very long. I have it right on the right side there and it just goes on to a second page, but only a couple of paragraphs on the second page.
And the letter basically says. You know, the chairman says that he has a hunch or he's heard or he thinks that PBS and NPR stations are running commercials and are not sticking to their mandate to only have underwriting.
And then he acknowledges that it's not PBS and NPR directly, but it's the local stations.
And he says that he's asked the enforcement bureau with the help of the media bureau, which are basically the two teams within the FCC, that regulate broadcasters to launch an investigation into figuring out whether or not NPR and PBS stations are indeed running commercials.
He then goes on in a kind of editorial nature to say, oh, by the way, I'm going to send a copy of this letter over to Congress because I know Congress is focused on CPB funding and therefore on funding NPR and PBS.
And it'll be important to them to know whether NPR and PBS stations are sticking with their mandate to be non-commercial.
And then he goes on, and this is on the second page, and says, basically.
You know, if it were up to me, I don't think that taxpayer dollars should be used for public broadcasting.
So it's an interesting little letter. I certainly encourage some light reading if you're up tonight and have nothing else to do.
But at the same time, it's just interesting to note that a whole bunch of what he's talking about is kind of outside the FCC's jurisdiction. First of all, the FCC has no direct jurisdiction over NPR and PBS, as we all know. They only have jurisdiction over us.
The local stations. And that's why we're here today and that's why we need to focus on this.
But then at the same time, they certainly had no jurisdiction over CPB funding. And he's acknowledged that by sending it over Congress, but it just seems kind of like outside of his sandbox.
And in fact, just last week, three senators sent a letter to him saying, hey.
You know, you're weaponizing the FCC and you're operating outside your sandbox. And about a third of the letter is about our topic, NPR and PBS and underwriting. Two-thirds of the letter.
Is about commercial broadcasters. You know, Carr is not only picking on us, he's also picking on, he's not picking on Fox, he's picking on other networks.
And specifically the thing that is in his crosshairs right now is CBS.
And their 60 minutes interview of Kamala Harris And the allegation is that the way that they edited that interview was news distortion.
And without going into too many details, the last FCC chair right before she resigned as the transition was taking place She dismissed complaints against CBS specifically for that.
And one of the first things that Chairman Carr did when he got there is he resurrected those complaints.
Undismiss them and is now going full force with an investigation.
So for all of this, here's my hot take on this.
My hot take is that this letter A few things. The letter is intended for an audience of two.
And has served its purpose for that. Its CAR is trying to make very clear and publicly that he is a good soldier and that he is with the program.
The other intention of this letter is to make all of us vibrate and gyrate, which we all are doing, and that's why we're having this training. And that I'm very curious to see And I'm skeptical about whether much becomes of this. And the reason is.
That up until now. The way that the FCC enforces underwriting is purely through complaints, through complaints from listeners and viewers.
And not just random complaints. In order to have a complaint that kind of gets past Go.
At the FCC. A listener or viewer not only needs to specify the station that they're complaining about.
They need to specify the date and the time that the alleged violation took place, that an underwriting spot which didn't qualify as underwriting, it was a commercial.
And to also include either a transcript or a clip of the announcement itself.
So a pretty high bar. There's no doubt that many, many of these complaints get filed at the FCC every year.
But they exercise prosecutorial discretion and they basically only pick up ones that they think are the most egregious or that they agree that there was the possibility of a violation.
And even then, if they decide that it's worth their limited resources to pursue it.
They'll send a letter over to the station and say, hey, we got this complaint. Here's the transcript or here's the clip. Is it true? Did you air this?
Let us know what your process was. Give us all kinds of information. These letters are pretty onerous. These letters are usually three, four, five pages. They usually have 20, 30 questions.
They require that we provide all kinds of documentation, but they don't issue many of these letters. I have no way of knowing exactly how many of these letters they issue other than the ones that I've been personally involved in because they almost always don't go on the public record until the FCC decides to go forward with You know, an investigation and a penalty. I can tell you though.
Traditionally, in the last 10 years, I'd say, we're talking about two or three cases a year.
Where the commission actually penalizes a station. For underwriting.
Violations. And even then, their violations generally of the most egregious sort.
So only the most egregious rise to the top. So how does this work, right?
How would an investigation of the entire network of PBS and NPR stations work? And the answer is
For this non-creative lawyer I don't know. I don't think it does work.
So the idea is that I don't think that they have the staff footnote, this very same staff, you know, there are maybe, maybe six people in the building at the FCC who have sufficient expertise of underwriting rules to conduct an investigation. I think that's being generous.
These are the same staff that a few weeks ago got the fork in the road email. These are the same staff, many of whom are post-retirement age anyway. This is the same staff that my understanding is from what I've been told, they weren't even given a heads up that this letter was going out.
So this wasn't done in coordination with the staff. So who knows how many of these staffers are going to be there a week from now, two weeks from now.
Three weeks from now. But how would such an investigation take place? The FCC simply does not have the staff to start monitoring our over-the-air programs.
The internet wouldn't work just because they listen to something or watch something on the internet, a feed, that doesn't mean that those announcements, the underwriting announcements that are in that feed are the same underwriting announcements that went over the air.
The FCC only has jurisdiction over what we broadcast over the air.
So the idea that the FCC would spread out across the country and start listening to radio stations or start watching TV stations for underwriting violations, you know.
In my mind, it's folly. Now, that said, I'm not the most creative guy. I'm a lawyer. I'm paid to, you know.
Hang within the lines to figure out where the lines are, paint in the lines, and then help you folks to kind of, if you want to, get as close to the line as you can without going over the line.
So that's my job. That's how I think. That said, applying that expertise to this, I just don't see how an investigation happens.
What I do imagine will happen, and this is a prediction, and as my friends and family know, my predictions are often wrong. But my prediction is that that's… People who are sympathetic to this view, they will start drumming up more and more complaints.
Whether that happens with the chairman himself issuing a public notice, inviting people to complain and kind of explaining to them exactly what they need to do to complain, or if it's quieter than that and the Heritage Foundation, you know, the folks behind Project 2025, Just start spreading the word and start getting their team to file lots and lots of complaints. And then the FCC gets more robust.
And it's in regular enforcement process through complaints. That's my hunch what's going to happen. And my hunch is what's going to happen is they're going to pick on some sacrificial lambs to go after. If I were them, and again, this is just being cynical and just putting myself in their shoes, I think that those sacrificial lambs will likely be
High profile targets in large markets so that they can get publicity for it. So that's my whole preface going before we kind of jump in and talk about underwriting and actually go through go through the ins and outs. And I'm Ryan, the one thing that I will say and my kind of
Punchline, my takeaway punchline, I'll preview for you here is what can we do about this? What should we be doing now?
And the answer is we should be doing exactly what we're doing right now.
This kind of training is exactly the kind of thing that not only do you want to do, but you want to document. So the idea is.
Make sure that you have… a robust policy or underwriting guideline at your station.
And I'm not talking about reinventing it. Just dust it off. And like any organization, it always every so often you want to dust off how you do things, refresh it, make sure that it works for today.
Given the world that we're in today, make sure that people, your staff are following those guidelines. Make sure that you have a process in place So that it's not just that you have the guidelines and they just exist in somebody's drawer, but that you're actually following them.
And then the big thing that I'm emphasizing in light of this three-week-old letter is to document those activities. So document this training.
Document that you have guidelines that you've refreshed or at least dusted off.
And then the big thing is, and we'll talk about this later in the webinar, with Greater Public, we've developed compliance worksheets. So for any announcement that is any has any kind of controversy, any kind of analysis. It's not just a slam dunk. Yeah, that's fine.
You know, use one of these worksheets or develop your own worksheet where you're actually checking off why you think the spot is compliant.
And then we're also suggesting that you have a manager or a supervisor check off on that as well.
If only to create the documentation so that if and when in the unlikely event the FCC comes a knocking, it's not a scramble, a fire drill. What were we thinking when we approved that spot? You have the documentation right there.
Contemporaneously from when you were going through the analysis. Are there questions?
Yeah, a couple of questions related to this. You've touched on this a little bit, Brad, but some questions here about do you feel there's a likelihood with the FCC that they might change the complaint process so there's a less burden of proof from complainers and or like you've already alluded to, there may be folks encouraged to submit complaints or any concerns about AI ears as monitors for our air.
Yeah, again, my, my… level of sophistication with AI wouldn't I can't understand how those ears would work for over-the-air broadcasts, right? Online streaming They can't pursue those because they don't know that those underwriting announcements are the same ones that ran over the air.
But that might be my technological Ignorance.
In terms of changing the way investigations and the burden of proof.
Again, I'm concerned that this is me painting within the lines, but I see that as being a very difficult thing for them to do.
Technically, even though the chairman of the FCC has a lot of influence over the staff.
A change like that, I would think needs to have commission support, meaning at least three commissioners at the FCC would have to vote to change how those things happen.
And right now there are two Republicans and two Democrats at the commission.
Trump has yet to nominate a third Republican to join the FCC. So for now, I think that they would have a tough time having a wholesale change in the way they conduct the way they process complaints.
That said, even as I say that, I would have said that about a whole host of things that are happening in the news over the last three weeks.
So, you know, take that with a grain of salt.
So a couple more questions related to the letter and then we'll move on so we have enough time to get to the guidelines. One comment is, it seems like the chair is working from guidelines from the original 1967 guidelines versus the enhanced underwriting rules that were established in the 80s.
If you have a comment on that and do you have a sense of whether from the letter it looks like there will be looking at for-profit businesses only and not nonprofits. And then we can move on.
Yeah, I don't agree with that respectfully, that question. In the letter.
It specifically says these announcements should not promote the contributors, products, services, or businesses, and they may not contain comparative or qualitative descriptions Price information, calls to action, or inducements to buy, sell, rent, release. That's language right out of the enhanced underwriting.
Guidelines. So the original underwriting was just, you know, this station is supported by X company. And that was all. And the enhanced ones allowed to have, you know, allowed you to have neutral descriptions of products and services. And of course, you know, since then we've had all kinds of case by case fleshing out of where the contours are that. And that's what we're going to be talking about.
But I'm not sure that that's what the letter did. But that said, and I don't want to be too glib about this, but I'm pretty confident that this letter How do I say this? I'm not sure Chairman Carr is really all that focused on the substance of underwriting restrictions.
I think if you bumped into him on the street right now and asked him what the FCC's underwriting guidelines are, he would have a tough time talking to you about it. And, you know, some staffer drafted this. I wouldn't give the specifics of that part of the letter all that much weight.
So with that, I'm going to just jump right in and start talking about underwriting.
If we have time at the end, we'll go through some examples after we've reviewed all this material, but we might not. And certainly I invite you all through greater public or directly reaching out to me if you have questions or comments to talk about.
That would be great. Enhanced underwriting. Anna, the question that you had brought up talked about the difference between regular old underwriting and enhanced underwriting. It's a distraction. We're in the world of enhanced underwriting now, but we don't even need to make a distinction between what regular underwriting is and enhanced underwriting. The underwriting that we see and hear all the time now is all enhanced on writing.
And for decades has been perfectly permissible. The one thing that's important about this slide And this is a little bit of tension with something else I'm about to say.
Which is this whole analysis, this whole area of the law is not for us to figure out what the difference, what we think the difference is between a commercial or an advertisement, which is what the statute and what the commission call them advertisements.
Versus what is impermissible advertising versus what is permissible underwriting. This idea of any of us having a visceral reaction of I know it when I see it, I know what the difference is. No, we have to.
Kind of dive into the deep end and figure out how the FCC looks at this And then once we have done that and know how the FCC thinks about the difference.
Then and only then do we get deference from the FCC. And this is an important thing. There's a long line of precedent.
Now, again, whether that holds in today's world, we will see. But I can't imagine that they're going to abandon this.
That says so long as a station as I was talking about, has a good policy or guideline in place so long as they're implementing that policy and so long as they do the analysis in a thoughtful, informed way. The commission will defer
To a station's good faith conclusion on any given announcement. And the reason that is, and this is what lawyers are very, very fond of saying, you know, that reasonable minds can reach different conclusions.
And the FCC has said that they appreciate that and that some of this stuff is very nuanced.
And that that smart people that know a lot about this stuff can come to different conclusions about it and the FCC will defer to a station's conclusion, even if they disagree with it. And the worst that will happen is that they'll say, hey, we disagree with you. Don't do it again. And you won't get fined. Now, I want to be clear about this idea of
Of penalties, even though there have been some large penalties. Typically a penalty for underwriting has been in the $5,000 to $20,000 range.
Depending on how egregious, how many times the announcement ran, quite frankly, how much revenue was attached to the announcement.
But… That's the tip of the iceberg. You know, a lot of people are focused on the amount of the penalty. The real penalty is the process.
Is the investigation itself as answering those 20 questions that you get in a letter.
And quite frankly, paying people like me to help in those investigations Every one of these investigations that I've helped with, unfortunately, you know, the stations wind up paying me a lot more than they pay in fines.
So I really wouldn't focus too much on the fines. So just to kind of set the table of where the extremes are. And the extremes are easy.
It's where we get closer and closer to the line that it's going to get difficult. But let's just make sure we understand the extremes.
And this is just by way of preview of the whole thing. Come on down to Santucci's.
For the best pizza in Philly, and I picked Philly only because, you know, Greater Public has PMDMC coming up in Philly. Bring the whole family in on a Tuesday.
And you can get two delicious extra large pieces for just $15. Philly has been loving our amazing service and award winning drinks for over 75 years. I'm going to go through this and pare it down to what you see is acceptable.
And kind of identify all the issues with this. And this is just by way of preview of the whole presentation. So come on down to Santucci's.
The FCC has said… that come on down is a call to action.
And therefore impermissible. For the best pizza.
Beth is is… both qualitative, it's telling you that the piece is good, but also comparative because it's telling you that it's better than other pizza in Philly. Bring the whole family in on a Tuesday. Again.
That is same as come on down. It's a call to action. You can get two delicious extra large pizzas.
Delicious is qualitative for just $15. Price term, no price term. So, so far.
No calls to action, no qualitative language. No price terms. Philly has been loving our amazing service.
Customer satisfaction can have loving, can't have amazing. Those are descriptions. Those are not… neutral descriptions of their products or services. Those are qualitative descriptions of how good their service is.
And award-winning drinks for over 65 years. Award-winning drinks. Well, some might say.
We need to find out whether it's true. Have they won awards for their drinks? And the answer is it doesn't matter whether it's true or not. Award winning is telling you how that their drinks are of good quality. In fact, people who give out awards have thought that they were good quality. It's not just a random customer. They're so good that they win awards. Award winning is not allowed. And this extends to, and a lot of people.
Miss this like, you know, starring Academy Award winning actress Meryl Streep is not permissible in an underwriting announcement, even though, in fact, you know, not only is… is Meryl Streep, you know, Academy Award winning. She's, you know, greatest of all time, as she proved to us on Saturday Night Live this weekend.
So you pare all of this down and you get sponsored by Santucci serving pizza and drinks for over 65 years.
But for over 65 years, that sounds to me like that's promotional.
Saying that a company has been in service for 65 years, how could they exist for 65 years if they're not good?
This is a perfect example of how it doesn't matter what I might think or you might think, because I don't understand this exactly, but the FCC has said that it's permissible to provide information about how long a sponsor has been in service.
Has been in business. So this is getting to, we're going to kind of now just go to first principles.
The first principle is this is the definition of what an advertisement is.
So an advertisement is an announcement that promotes, and that's the key there, promotes, right? So everything that we've been talking about Call to action, price term, qualitative language.
Comparative language. That's all Just the FCC's articulation of what the components of a promotion are.
So even if when you're analyzing your announcements and you're trying to get the language to see if it falls into one of those boxes.
In a way that's good and that's the way the FCC does it. But you also have to step back at the end of the analysis And say, is it promotional? Because that's the real test. The real test is, is it promotional?
And it's possible that even though something doesn't have price terms and doesn't have qualitative language.
That you still can have, you know, that it can be You still conclude that this spot's promotional. So for instance, depending on the music bed.
You could have a music bed that is promotional or at least arguably promotional, that doesn't satisfy, tick any of those boxes if the music is exciting and stirs up a listener.
On top of it, so it needs to promote a for-profit.
Sponsor, product, service, or facility. You don't need to focus on it too much. It's just basically promotes a for-profit sponsor. So Anna, you brought up that somebody was previewing. Does it apply to nonprofit sponsors?
And this is one of the trickiest parts of underwriting review.
Technically, from an FCC perspective, these restrictions simply do not apply to nonprofit sponsors. End of story.
The FCC staff, if they get a complaint and the sponsor is a nonprofit entity, they just stop. The analysis is over.
You can promote a nonprofit sponsor and government entities, government entities qualify as nonprofit sponsors.
As well, or even quasi-governmental entities qualify as nonprofit sponsors. A lot of stations still decide Not to do that, right? A lot of stations decide to either treat for-profit sponsors and nonprofit sponsors exactly the same.
But that's a station decision. Some stations decide that they give a little more wiggle room to nonprofit sponsors.
But from an FCC perspective, this restriction simply doesn't apply. Now, why would a station decide to treat nonprofit sponsors and forced profit sponsors the same? In my experience, this comes up a lot, either like with hospitals Or with schools or theaters, because there are some nonprofit theaters and some for-profit theaters.
But let's talk about hospitals. So a nonprofit hospital could have an announcement that says we're ranked number one in US News and World Report.
But then a doctor who practices at that hospital who has admitting rights at that hospital, but who has a private practice across the street that's a for-profit private practice, who also the doctor individually was ranked number one at US News and World Report.
You can't have that in an announcement for that doctor's private practice. And so it's hard for your staff to explain to the doctor, sorry, the hospital can do it, but we can't let you do it. And so I think a lot of stations deal with that, reconcile that by treating everybody the same. And the other reason, of course, is for listener expectations, listener and viewer expectations, tone, just to kind of maintain our public broadcasting tone.
Another component. Of underwriting, of whether or not you trip being a prohibited advertisement is there needs to be compensation.
Compensation in any form. I would say for the most part, you should assume that there is compensation because almost always your motivation for making the announcement involves some kind of compensation.
So for instance, the FCC has said there was actually a case about this that there was a sponsor of a station that owed the station a lot of money.
For previous underwriting announcements. And the guy just wasn't paying.
And the station went to the guy and said, hey. What about if we give you 10 free announcements next week?
Will you pay then? And he said, sure. If you give me 10 free next week, I'll pay. And the station made the argument they didn't pay for these 10 spots coming up.
And therefore, the underwriting restrictions didn't apply. And the FCC disagreed with that.
The SEC said that that was enough compensation that he was going to pay what he already owed.
To make it to satisfy the compensation requirements. So I think you really have to assume that the compensation requirement is satisfied. One exception that I talk to clients about is like community calendars.
If you're just announcing an event on a community calendar and it's for an entity that is not a sponsor, never has been a sponsor, and the event has no connection to anything of any sponsor.
Then there's no compensation there when you announce that in your community calendar and therefore your community calendar can have qualitative language or calls to action or, you know, these restrictions simply don't apply.
So this is, you know, just kind of summarizing When we previewed already, no price information, no calls to action.
No inducements, no qualitative or comparative language. And this is something we haven't talked about yet, not too long. And we're going to have slides on each of these, so I'm not going to go into them now. I'm just going to dig right in.
So no price information. You have to look at this pretty broadly, which is you can't mention savings.
The FCC has said you can't mention interest rates. You probably can't mention contracts.
And any kind of hint of a price. That said.
A lot of clients ask for a list of magic words, words that are always okay and words that are never okay.
And so one of the words that always is at the top of everybody's list is, can you use the word free?
Right. Free, by definition, is price information. Zero price. And that's right. You can't have the word free When you're talking about The cost being nothing.
But are there instances of the word free that are perfectly fine? And the answer is sure.
Sugar-free, nut-free. Gluten-free. I just reviewed an announcement this morning that was for a ferry.
That doesn't take cars. And it was automobile free. And that was perfectly fine.
Conversely, there are some words that you would think would never be on the forbidden list.
But in fact, they are when used in a certain context.
So for instance, you put happy an hour together, you got happy hour.
You put Black and Friday together. You got Black Friday. You wouldn't think in general that, you know, the use of the word black would be a price term, but when you put it together with Friday, it's clearly a sale.
Sometimes you have words that serve dual purposes and it really depends on how the word is being used. This comes up in restaurants. So like Tuesday special is veal parmesan.
Well, does that mean that they only have your parmesan on Tuesdays?
And that's why it's special? Or does it mean that veal parmesan is discounted on Tuesdays?
It's crazy, but that matters, right? So you would have to go back to the sponsor and say, what does it mean Tuesday special veal parmesan? Is it discounted?
Or is it just that you don't have it on other days? And that would make the difference of it being permissible or not permissible.
So that's no price information. No calls to action. We talked about that. Come on down. Come visit us. We saw it in the pizza.
In the pizza announcement. Something that people have the impulse of doing is toning down a call to action in an effort to make it less of a call to action. And I've had some clients say.
You might think about coming on down. May we suggest that you come on down.
That doesn't work. You can't… put more words around something and undo the damage that is in the words that are in the middle. So don't give in to that impulse.
That said, the FCC has said that it's okay to have a phone number, but you can't have like call 555-1212. You can say, you know, more information available at 555-1212 or and then give their website again.
I don't exactly understand why more information is not a call to action when call is a call to action. But that's what the FCC has said.
More information available at is okay. Tickets available at? Probably not okay because that is a call to action.
Ticket information available at the FCC has said okay. To that. Again, I'm not here to defend it. We're here to figure out how the FCC will analyze this.
And where they think that the line is. And that's where they think the line is.
No inducements. An inducement is this week only get a bonus, special gift for the first 50 customers.
Buy one, get one free. But the FCC has even said that lifetime warranty.
You know, if you buy this, that's an inducement also. Another kind of inducement is we donate 5% of all our profits to a charity.
That's an inducement as well and is not permissible. No inducements.
No qualitative or comparative language. We've talked about this, saying a product is is fantastic or tasty, but there's no difference between tasty and very tasty.
So any kind of, usually adjectives that are describing the quality of a product are not permissible. Any kind of comparison to another project, which we talked about better or best.
Is not allowed. One of the things we already touched on is award winning or Academy Award winner. What about board certified surgeon?
Turns out board certified surgeon is also a qualitative statement about how good the surgeon is. Even though it might be true.
That the surgeon is board certified. The fact is that you can be a surgeon without being board certified. So by telling a listener or viewer that the surgeon is board certified.
Essentially, the reason you're telling them is because you're saying that they are more qualified than others. They are better than others.
Contrast that to certified public accountant. The FCC has said that that is permissible Because you can't be… And I don't know if this is true or not, but the SEC has said this. You can't be a public accountant without being a certified public accountant.
The only way to be a CPA is to be a CPA. Whereas being a board certified surgeon is not the only way to be a surgeon.
Not too long. Not too long. Is really referencing two different things at once.
One is that the FCC has said that underwriting announcements should not be more than 30 seconds.
And the reason they've said that is that they think that if you go over 30 seconds, what on earth could you possibly have to say that will not go into being promotional?
How could you use up more than 30 seconds to provide value neutral descriptions of a product or service?
That you need more time. So along those lines, they've also said that a long list of goods or services is also promotional.
Their magic number appears to be, and this has been somewhat of a moving target, but their magic number appears to be four.
So if you're listing the products or services. That a sponsor is offering.
You should leave it at four. A few… clever folks try to squeeze in more than four and make it look like they're not four. So for instance.
Support is provided by Ragu. That's a bad one. Such and such sauce company.
A variety of sauces, sauces and other condiments. And dressings. And then it goes on and lists four different types of dressings and four different types of sauces. You're like way over here, right? So the idea that you say We have dressings and sauces. That's already two.
So if you want to list specific sauces or dressings, you have two more to use and then you're up to your four.
And if you put comma and more at the end of that, that counts as one, two.
So this can be a tricky area that you really need to pay attention that you're not listing more than four things that the sponsor is offering as a product or a service And watch out for Anne Moore and kind of, you know.
Putting umbrella categories around them. So now this is an exception.
And this is one that a lot of people pay, you know, wind up spending, paying a lot of attention to.
So the exception comes from What if my name in and of itself is what looks like it would be a violation of one of the underwriting restrictions. So here we have Dollar Tree.
By definition, that's a price term or the 99 cent store.
If… The name of the true name of the sponsor is a name that otherwise is not compliant with underwriting, it's okay because you're not using that word in a promotional way, but rather by definition, using it to identify the sponsor. So other examples of another example of this would be, you know.
Comfortable shoes. Or pay less shoes. How else can you identify the sponsor without using those words?
So that's pretty easy, but you have to make sure that that's in fact really their name.
But the more difficult thing is established slogans, what the FCC calls logograms, which I don't know exactly why they did that.
But it's established slogans that are otherwise promotional. The classic example is McDonald's, I'm loving it. Or Nike, just do it.
The idea is that if you go up to 10 out of 10 people on the street and you say, what company am I talking about when I tell you I'm loving it?
Everybody knows that it's McDonald's. Mcdonald's has spent a lot of money to associate their brand with I'm loving it.
So much so that when you put I'm loving it in an announcement, you're not doing it to really say I'm loving it. It's not for the substance of it, but it's rather to identify McDonald's.
And so you're using it for an identification purpose rather than for a promotional purpose. But the slogan has to be established And it has to be one that the public associates with the sponsor.
The first step in terms of like analyzing whether it's an established slogan is I go to the sponsor's website, see whether or not that slogan is prominently featured on their website. I go into the Magic Google machine, I do a search of that slogan and see whether You know, many, if not most of the hits come back
To show that sponsor, which is a little difficult if you're talking about a local sponsorship. But I also see whether or not the company has applied to register the trademark or has even gotten a registered trademark for that slogan.
Because if they have, that's pretty much the same test that the Patent and Trademark Office applies.
To give out registered trademarks, which is whether or not the public associates That slogan with the sponsor. In those cases, it's an established trademark, an established slogan and it's permissible to use that in an underwriting announcement.
That said, a lot of people try to squeeze promotional language, especially into URLs.
So you should be very skeptical of this. So if you have a URL that In and of itself has words that are promotional that you wouldn't have been able to use in the main text of the announcement.
Unless it falls under one of these exceptions, meaning it's the actual name of the sponsor Or it is an established slogan that would be permissible. You can't sneak it into the URL to get rid of it. So a lot of, you know, a lot of sponsors will have, you know.
You know, Joe's Pizza slash yummy. Can't do that.
Yes. Okay. Are there questions?
Hey, Brad. Just flagging we've got about 15 minutes left. So there's a lot of questions, but I don't know if you want to kind of wrap up this Chevron.
I'll blow through these as quickly as I can and then I'll turn to questions then.
I just want, you know, this is just don't lose sight of the fact that, and a lot of people kind of jump right into the analysis, that if you're at a station that makes a distinction between for-profit and nonprofit sponsors in terms of applying these rules, because the rules don't apply to nonprofit sponsors.
Don't lose sight of that. Ask that question. Remember to ask that question. Sometimes, you know, you kind of jump right in.
And compensation we talked about. I want to talk about this because this is the flip side of the underwriting restrictions, which is that the FCC actually requires when you run an underlining an underwriting announcement that it has a clear and accurate disclosure of who the sponsor is. So you need to be careful about that.
In the announcements itself. It should be clear, obvious to the listener or to the viewer who the sponsor is. Sometimes sponsors try to hide who the person is who paid for the announcement or the entity is who paid for the announcement. And you can't allow that.
There's a separate requirement that you provide accurate disclosure of who paid for it.
Very, very quickly, public stations should be staying away from any kind of political announcement. And a political announcement is one that mentions a candidate.
Any kind of candidate, local, state, federal. Also, and this is a tricky area of the law.
You can't have paid issue ads that express a view on an issue of public importance.
We don't have time to really dig into this, but the thing I want to point out with this This restriction applies to for-profit and non-profit sponsors.
So even though the regular underwriting restrictions don't apply to nonprofit sponsors.
The paid issue ad restriction applies to nonprofit sponsors as well.
And the issue is you can't have an announcement that expresses a view. It's key. It has to express a view on an issue of public importance. The FCC has not done a very good job of identifying how you figure out whether something is an issue of public importance. It's very community specific and very contextual in terms of
You know, something could be an issue of public importance today that wasn't an issue of public importance two weeks ago or two years ago. Generally, the test that I look at is, is there pending legislation?
Is it something that would make the newspaper, if there were newspapers?
And it has to express a view, but the view could be implied. So you're not only looking for an explicit view, so you have to, these announcements, you have to parse very, very carefully.
Very quickly, we can't do any fundraising on the air for other nonprofits other than ourselves without getting a waiver from the FCC. The FCC gives out waivers pretty readily and quickly. Generally, that's for things like with the recent tragedies with the LA fires, the FCC gave out some waivers for that. It's for those kinds of disaster relief. So in a nutshell.
Here are the things you can do. Name and contact information, address, phone number, and web address is okay.
Brand and trade name of the product and services offered. That's okay. You need sponsorship, accurate sponsorship idea of the sponsor itself.
Value neutral descriptions of products or services. Non-promotional slogan, and to be specific here, it's using an established slogan in a non-promotional way.
A slogan that the public already associates with this sponsor. And it's okay to provide historical information such as how long you've been in business.
What you can't, no price terms, no calls to action, no inducements, no comparative or qualitative.
No excessive repetition of information. And now finally, here is the good stuff, which is these new worksheets that we've been developing with Greater Public.
And Anna, tell me, these are, I think, available right now on the website.
Yes, Ashley, I'm going to have Gail in the chat post a link to these worksheets along with some other FCC copy compliance resources that we have available for your use in educating staff and refreshing your own memory on some of the the guidelines and the worksheets. So Gail's posted a host of links there. And, you know, we have also been advising stations to take a look at
Your public facing sponsorship materials like your media kits or your guidelines that might be posted in your website and just do a general look through in terms of language, in terms like underwriting and corporate support.
Versus sales and advertising would be preferable right now. And maybe even looking at some of the titles of your reps. Is it corporate support? Is it sales? Corporate support is probably safer at this point. Really doing what we can to lean into our commitment to the non
Commercial aspect of what we do. That's kind of what we've got available. And Brad, if you're comfortable, I'll move on to some of the questions that have come in.
I just want to say one word about these worksheets. First of all, we have two different worksheets, one for for-profit sponsors and one for nonprofit sponsors, assuming that a station makes that distinction. But there's nothing magic about these worksheets. So really, you know.
Tweak them, whatever works for you. And they're also not rocket science. I felt a little silly putting them together, but it's like, you know, you can see on the bottom left.
It says, you know, does this announcement contain a price term? And then, you know, if you get to the second page, it says, if you answered yes for any of the above.
The announcement is not compliant, right? But again, the purpose of this is to document the analysis that you're already going through.
So that you have it in the unlikely and unfortunate event that the FCC comes a knocking.
Yes, absolutely. Thanks, Brad. Along those lines, there have been a number of comments and questions around this topic, and that is the idea of national spots and the liability at the station level. There are several folks here commenting that some of the spots that make them the most uncomfortable are some of the national Is there precedent in the past for local stations being fined?
Because of national spots and are there things that stations can do to protect themselves in this climate for the idea that the investigation might focus on some of these national spots.
It's a great question. And the answer is, unfortunately, yes, right? Everything that goes out over our air, we're responsible for. Whether it's a local spot or it's a national spot.
In fact, so much so that the FCC can't go after PBS or NPR. They can only go after us.
My understanding is, and whether it's, you know, through NIDA or through APT or through PBS or through NPR, that there are indemnification provisions Where… If push came to shove, there would be, you know, cost sharing or effort sharing in defending those announcements.
To the FCC, but this is all unchartered territory. Unfortunately.
Thanks, Brett. A similar type of question that relates to kind of evolving things now, and that is some language that in the past has been something that stations have used along the lines of women owned or minority owned businesses or things like that for nonprofits I'm talking about. It seems to be from these questions.
Are there things that would now be considered political that stations should be staying away from, especially in regards to DEI?
So I have a few different ways to answer that question. I didn't think it was going that way. So one thing is, you know, family owned, women owned, minority owned.
There's no clear answer from the FCC about whether or not that is comparative or qualitative language, you know, that the reason you're saying that you're minority owned or woman owned or even family owned is to say how you're better than than another company that isn't.
In general, that's one of those that is like right at the line that involves some risk that requires a real analysis of the whole announcement.
To make sure that it's okay. But in most instances, you know, at least when I'm analyzing those, it is permissible as being identification purposes, kind of almost the same as in business since 1965.
Obviously, none of that applies to nonprofits. So that's not the way the question was going, but that was for profits.
For nonprofits, the question is, minority owned or women-owned. So the first step of analysis I'd say is.
Is that expressing a viewing One of the last slides we did is that expressing a view on a controversial issue.
And I don't think so. You're not making that an issue. It's about your business. It's identifying your business. You're not expressing a view on that issue.
Separately, and this is really beyond the scope of what we can handle.
There's no doubt that the SEC and the government in general, obviously, has a new spotlight on DEI programs.
And whether or not those kinds of minority owned and women-owned will get Scrutiny.
Again, the lawyer in me painting inside the lines, I just don't see the connection.
I just don't see how running a sponsor's announcement talking about how that sponsor is woman-owned would create any kind of liability.
For the station itself with respect to that. I mean, I mean… Check back in with me in six months to see where our country is at that point, I guess, to reveal my politics.
Thanks, Brad. Other questions about, I guess this is kind of building on that, things that we have done in the past that things like sponsored promos or mentioning a sponsor and a promotion of a program that's upcoming which you know people are distinguish that between that and underwriting.
Or using music in underwriting announcements. Are these things that could be viewed as more commercial and should we dial that back.
For her to answer that generically, because I don't think there's any generic prohibition to that, but you can't do it in a way that actually promotes the sponsor.
So it really would depend on how you're doing it, right? So if If it's just, you know, you're talking about some event and you're saying support for the event is provided by You know, Pepsi, but you're not at all saying how good you know if if the mention, if it were in a traditional underwriting announcement, would be permissible the way the words that you're using.
Than is permissible in this situation as well. One thing that's come up a lot lately for me with my clients And this is not exactly the same, Adam, but I think related is ticket giveaways.
The stations have had some confusion about this. When a sponsor gives you a ticket.
That checks the compensation box. So you've gotten compensation and then you make an announcement on the air. And if the announcement is.
You know, call in for free tickets That's a classic underwriting announcement violation.
You're talking about that they're free. You're telling people to call in. And the reason you're saying all of this is because they gave you a free ticket. The sponsor gave you the tickets.
So it is an underwriting announcement. I know we don't think about it that way, but it is.
So I would caution you to stay away from those kinds of things. There are ways around it, which is that, you know.
Our station has ticket giveaways available on the website and give the station's website and then run the contest over the website, but not on the air. Unless the station has paid for the tickets, ironically.
If you've paid fair market value for the tickets, then you weren't compensated. And then it's fine to have an on-air giveaway. It kind of defeats the purpose. You'd never do it. But that's the only way you can do it because you got rid of the compensation part.
Yeah.
Thanks. Yeah, there were a couple of questions actually about that. So directing listeners to the station website is probably the way to go in that scenario. Okay, so we've just got a few minutes left. I've got a couple comments here that the greater public links are not working. I don't know if the site is down, but I'm sure it will be rectified soon.
Gail, maybe you can shed light on that if you know. Otherwise, you will get an email after this webinar with all of the links and we'll make sure that everything's working and you have access to everything that we're sharing.
And okay, I'm just kind of going through some of the questions now.
Some of these are questions that we've received before. So what I will do if we don't get to your question is follow up with links to information that we already have on our website. So I'm just kind of combing through questions that are a little bit more timely.
And versus some of the general questions that we're getting. Let's see here.
Do you, you know, going back to the nonprofit for-profit conversation brad For those stations that do distinguish between the two, would your advice be that this might change given what's going on and stations would be better serve to keep the guidelines consistent.
Again, the lawyer painting with the lines in me says it can't change because that is a distinction that is right there in the statute. So this not just in the FCC's rules.
This is a law passed by Congress that says that the definition of advertisement only applies to for-profits.
Okay. And similarly, there is understanding that the FCC does not have jurisdiction over digital, but would there be any, you know, for those stations that go further with their digital messaging. Is there a scenario where a review of digital copy might be used to
To kind of prove the commercial is on air
Nothing, nothing, nothing that we talked about. Doesn't bleed over to the digital space at all. The FCC has no jurisdiction over digital. The underwriting restrictions, including the paid issue ads doesn't apply to digital.
That said, and this is, you know, to make everybody's head explode.
You might have an IRS problem. So most stations are licensed to 501c3s And you're opening up a possibility if you have too much income that comes in from, quote, commercials.
And the IRS has a different definition of what is an advertisement. But if you satisfy the IRS's definition of an advertisement, arguably that would make you subject not only to unrelated business income tax for that revenue.
But if you went over and had too much of that revenue compared to your other revenue.
You would put your 501c3 status in jeopardy again. I don't want to alarm anybody. This hasn't happened.
There's no noise about this happening. But it's something to think about. And that's something you should check in with your accounting team.
Thanks, Brad. Yeah, and we do also have information about UBIT on our website, which we can make available. We're right at the hour. I'll just give one more question. And yes, we've gotten a lot of questions that come in. I will do my best to digest all of these and get back to you or even kind of post answers to them like I've done in the past. But I guess the final question we've got
Certainly go through Anna, but if anybody wants to reach out to me as well, Anna and I talk all the time and we can kind of ping pong.
Yes, we can totally ping pong. And we've got a few questions about this, Brad. So that's why I'm going to end on this question is trade.
Is that consideration? Yeah. Okay. Awesome.
100%. 100%. Yeah, I think… You know, back to rule number one, I think you should always assume that the compensation box is checked.
And you just got to ask yourself, why are we putting this on our air?
And if there's anything motivating you other than your own individual In a vacuum, interest in it going on the air, then there's probably some kind of compensation to get you over the hump to put it on the air.
Yeah. Okay. Well, thank you. So as I mentioned, everybody, thank you for joining us. It's such a large crowd. So thank you for your patience that we couldn't get to all the questions. We will download these questions and do our best to answer them following up on the webinar. If you have something question you have for either Brad and I in the meantime, because it'll take us a little time to do that. Feel free to reach out. You know how to reach us. You will get an email with all of the links to the various resources we have on the site.
Hang in there, everybody, and keep doing the great work that you're doing. And thank you, Brad, so much for your time and reassurance and practical advice today.
Thanks all.