Question 1

Accepted Answer

The FCC was established by the Communications Act of 1934 and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable.

The FCC is directed by five Commissioners appointed by the President and confirmed by the Senate for five-year terms, except when filling an unexpired term. The President designates one of the Commissioners to serve as Chair. Only three Commissioners may be members of the same political party. None of them can have a financial interest in any Commission-related business.

As the chief executive officer of the Commission, the Chair supervises all FCC activities, delegating responsibilities to staff units and Bureaus.

Complaints filed against stations are handled by the Enforcement Bureau. The Enforcement Bureau maintains a website that contains recent rulings regarding underwriting credits. Although this website has not been updated since 2018, it is still a good resource if you have questions regarding permissibility of a credit that are not answered here. The FCC’s Media Bureau also maintains a list of specific rulings. But, similarly, this list has not been updated since 2017.

Question 2

Accepted Answer

“Plugola” and “Payola” are specific examples of Sponsorship ID violations. If an individual who plays a role in the selection of broadcast matter either (1) has accepted any money, favor, loan, travel or entertainment, benefits, or other thing of value, in exchange for the airing of any broadcast matter; or (b) promotes over the air any activity in which that person has any direct or indirect financial interest, an over-the-air acknowledgement of the compensation or financial interest is required. If there is no over-the-air acknowledgement, then a violation of the Sponsorship ID laws has taken place.

While stations have always been required to identify all entities that financially support the station in exchange for the broadcast of some “matter,” stations in the early years of public radio were not allowed to announce anything more than the name of the “sponsor.” Over the years, recognizing the need for the stations to support themselves financially, the FCC and Congress loosened the restrictions on what stations are allowed to do. The “enhanced underwriting” rules that have evolved permit stations greater latitude to “identify” their for-profit supporters and to describe the goods and services they offer.

While the FCC has articulated some guidelines, it has not directly addressed all underwriting issues. Indeed, it would be impossible to address them all, since the universe of underwriting copy is infinite, limited only by the creativity of the copywriter.

Question 3

Accepted Answer

Price Information

Price information of any sort is prohibited, including product or service price, savings information, value information, interest rates, or indication of no cost. For example:

“Starting in the low $200’s”
“Offering free admission”
“Available with a 6.5% APR”

Calls to Action

No calls to action regarding the company or a product or service are allowed. For example:

“Come in for a test drive”
“Get your ticket today”
“Buy XYZ at your local drugstore”
“You can stop by one of our two locations, or you can call us at 555-1212”

Inducements to Buy, Sell, Rent, or Lease

Inducements to buy, sell, rent, or lease a product or utilize a service are prohibited. This includes announcements of special promotions. For example:

“Offering a gift with purchase”
“Includes oil changes for a year”
“Special deals in the month of June”

Comparative Information

Anything that favorably compares an underwriter to competitors or industry standards is unacceptable. This includes mentions of awards of recognition or merit. For example:

“Offering the best in garden supplies”
“Named ‘best place to work’ three years in a row”
“The leading maker of…”
“Oldest bank in town”

Qualitative Information

Descriptive information that is not value neutral is deemed qualitative and is not acceptable. For example:

“Offering exceptional customer service”
“A perfect setting for a romantic evening”
“High quality medical care”
“Our dedicated friendly staff loves children …”
“ASE certified master technicians”
“Anyone who touches your loan file has more than ten years of experience in the mortgage and banking industry”

The Truth is Not a Defense

An underwriting credit may be promotional – and thus unacceptable – even if the information it contains is factually true. The fact that the underwriter’s claim can be proven will not make it acceptable. If the copy violates one of the restrictions listed above, it is unacceptable. For example, even if it were true that an underwriter had received an award or offered the lowest prices in town, the underwriting credit could not refer to these facts.

Nonprofit Underwriters

The FCC’s rules are more lenient for nonprofit organizations and these items are permissible for those organizations. That said, many stations choose to apply the for-profit rules to nonprofits for several reasons. One reason is that revenues received in exchange for promoting a nonprofit might be subject to unrelated business income tax (UBIT), so it can be an administrative hassle to segregate these revenues and determine whether tax is owed. Another reason is that some stations want to keep their on-air sound as non-commercial as possible. Listeners may not always understand that an entity is a non-profit and may be confused by what sounds like an ad. It can also be difficult for underwriting staff to explain to a for-profit underwriter why the station permits other underwriters to use the same promotional language it has told the for-profit it may not use.

Question 4

Accepted Answer

Stations traditionally understand that they have virtually unrestricted freedom to promote local events so long as the station does not receive any consideration in exchange for the promotion. Music program announcers often talk freely about “transitory events,” such as artists that are performing in local clubs or groups that give local concerts.

That said, announcers would not be able to talk freely about an event if the club or promoter was also an underwriter of the station – even if no consideration was given for the promotion itself. If the club is on the air as an underwriter – following all of the underwriting guidelines – the announcers can not talk freely about the event, they must follow all underwriting guidelines.

One FCC decision indicates that, in some circumstances, a station’s ability to promote “transitory events” is more limited than previously assumed. The decision concerns a concert put on by a for-profit promoter, but “sponsored” by the station. The station lent its name to the “WNCW Mountain Oasis Music Festival,” received tickets to the concert, which it gave away to listeners and donors, and aired announcements that promoted the concert. The FCC ruled that the station had violated the underwriting rules by promoting a for-profit event in exchange for consideration. [Isothermal Community College, DA 01-283, Enforcement Bureau, (December 6, 2001)].

Question 5

Accepted Answer

The FCC was established by the Communications Act of 1934 and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable.

The FCC is directed by five Commissioners appointed by the President and confirmed by the Senate for five-year terms, except when filling an unexpired term. The President designates one of the Commissioners to serve as Chair. Only three Commissioners may be members of the same political party. None of them can have a financial interest in any Commission-related business.

As the chief executive officer of the Commission, the Chair supervises all FCC activities, delegating responsibilities to staff units and Bureaus.

Complaints filed against stations are handled by the Enforcement Bureau. The Enforcement Bureau maintains a website that contains recent rulings regarding underwriting credits. Although this website has not been updated since 2018, it is still a good resource if you have questions regarding permissibility of a credit that are not answered here. The FCC’s Media Bureau also maintains a list of specific rulings. But, similarly, this list has not been updated since 2017.

Question 6

Accepted Answer

“Plugola” and “Payola” are specific examples of Sponsorship ID violations. If an individual who plays a role in the selection of broadcast matter either (1) has accepted any money, favor, loan, travel or entertainment, benefits, or other thing of value, in exchange for the airing of any broadcast matter; or (b) promotes over the air any activity in which that person has any direct or indirect financial interest, an over-the-air acknowledgement of the compensation or financial interest is required. If there is no over-the-air acknowledgement, then a violation of the Sponsorship ID laws has taken place.

While stations have always been required to identify all entities that financially support the station in exchange for the broadcast of some “matter,” stations in the early years of public radio were not allowed to announce anything more than the name of the “sponsor.” Over the years, recognizing the need for the stations to support themselves financially, the FCC and Congress loosened the restrictions on what stations are allowed to do. The “enhanced underwriting” rules that have evolved permit stations greater latitude to “identify” their for-profit supporters and to describe the goods and services they offer.

While the FCC has articulated some guidelines, it has not directly addressed all underwriting issues. Indeed, it would be impossible to address them all, since the universe of underwriting copy is infinite, limited only by the creativity of the copywriter.

Question 7

Accepted Answer

Price Information

Price information of any sort is prohibited, including product or service price, savings information, value information, interest rates, or indication of no cost. For example:

“Starting in the low $200’s”
“Offering free admission”
“Available with a 6.5% APR”

Calls to Action

No calls to action regarding the company or a product or service are allowed. For example:

“Come in for a test drive”
“Get your ticket today”
“Buy XYZ at your local drugstore”
“You can stop by one of our two locations, or you can call us at 555-1212”

Inducements to Buy, Sell, Rent, or Lease

Inducements to buy, sell, rent, or lease a product or utilize a service are prohibited. This includes announcements of special promotions. For example:

“Offering a gift with purchase”
“Includes oil changes for a year”
“Special deals in the month of June”

Comparative Information

Anything that favorably compares an underwriter to competitors or industry standards is unacceptable. This includes mentions of awards of recognition or merit. For example:

“Offering the best in garden supplies”
“Named ‘best place to work’ three years in a row”
“The leading maker of…”
“Oldest bank in town”

Qualitative Information

Descriptive information that is not value neutral is deemed qualitative and is not acceptable. For example:

“Offering exceptional customer service”
“A perfect setting for a romantic evening”
“High quality medical care”
“Our dedicated friendly staff loves children …”
“ASE certified master technicians”
“Anyone who touches your loan file has more than ten years of experience in the mortgage and banking industry”

The Truth is Not a Defense

An underwriting credit may be promotional – and thus unacceptable – even if the information it contains is factually true. The fact that the underwriter’s claim can be proven will not make it acceptable. If the copy violates one of the restrictions listed above, it is unacceptable. For example, even if it were true that an underwriter had received an award or offered the lowest prices in town, the underwriting credit could not refer to these facts.

Nonprofit Underwriters

The FCC’s rules are more lenient for nonprofit organizations and these items are permissible for those organizations. That said, many stations choose to apply the for-profit rules to nonprofits for several reasons. One reason is that revenues received in exchange for promoting a nonprofit might be subject to unrelated business income tax (UBIT), so it can be an administrative hassle to segregate these revenues and determine whether tax is owed. Another reason is that some stations want to keep their on-air sound as non-commercial as possible. Listeners may not always understand that an entity is a non-profit and may be confused by what sounds like an ad. It can also be difficult for underwriting staff to explain to a for-profit underwriter why the station permits other underwriters to use the same promotional language it has told the for-profit it may not use.

Question 8

Accepted Answer

Stations traditionally understand that they have virtually unrestricted freedom to promote local events so long as the station does not receive any consideration in exchange for the promotion. Music program announcers often talk freely about “transitory events,” such as artists that are performing in local clubs or groups that give local concerts.

That said, announcers would not be able to talk freely about an event if the club or promoter was also an underwriter of the station – even if no consideration was given for the promotion itself. If the club is on the air as an underwriter – following all of the underwriting guidelines – the announcers can not talk freely about the event, they must follow all underwriting guidelines.

One FCC decision indicates that, in some circumstances, a station’s ability to promote “transitory events” is more limited than previously assumed. The decision concerns a concert put on by a for-profit promoter, but “sponsored” by the station. The station lent its name to the “WNCW Mountain Oasis Music Festival,” received tickets to the concert, which it gave away to listeners and donors, and aired announcements that promoted the concert. The FCC ruled that the station had violated the underwriting rules by promoting a for-profit event in exchange for consideration. [Isothermal Community College, DA 01-283, Enforcement Bureau, (December 6, 2001)].

Why and How the FCC Regulates Public Media

Anna McDonald

Laura Landress

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