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Notice

Request for Comments on the Use of Video News Releases by Broadcast Licensees and Cable Operators

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Information about this document as published in the Federal Register.

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AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

This document, reminds broadcast licensees, cable operators and others of sponsorship identification requirements applicable to video news releases and solicits public comment on the use of video news releases by broadcast licensees and cable operators.

DATES:

Comments may be filed on or before June 22, 2005, and reply comments may be filed on or before July 22, 2005.

ADDRESSES:

You may submit comments, identified by docket number, by any of the following methods:

  • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
  • Federal Communications Commission's Web site: http://www.fcc.gov/​cgb/​ecfs/​. Follow the instructions for submitting comments.
  • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.
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FOR FURTHER INFORMATION CONTACT:

Hope Cooper Media Bureau (202) 418-1440, TTY (202) 418-7172, or e-mail at Hope.Cooper@fcc.gov.

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SUPPLEMENTARY INFORMATION:

This is a synopsis of the Commission's document in MB Docket No. 05-171, FCC 05-84, released April 13, 2005. The complete text of the document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. at their Web site http://www.bcpi.com or call 1-800-378-3160.

Synopsis

1. The Commission has recently received a large number of requests that it consider whether the use of “video news releases” or “VNRs,” by broadcast licensees, cable operators, and others complies with the Commission's sponsorship identification rules. (See, e.g., Letter from Josh Silver, Executive Director, Free Press, et al., to Honorable Kevin Martin, Chairman, FCC et al. (March 21, 2005) (stating that the authors “are writing you today on behalf of nearly 40,000 Americans who have signed a petition urging the Federal Communications Commission to investigate all broadcasters who distribute government-sponsored news reports without properly identifying their source”); Letter from Honorable John F. Kerry, U.S. Senator, to Honorable Michael Powell, Chairman, FCC (March 15, 2005); Letter from Honorable Daniel Inouye, U.S. Senator, to Honorable Michael K. Powell, Chairman (March 14, 2005). Also, the Commission has received thousands of e-mails about this practice.) VNRs are essentially prepackaged news stories, that may use actors to play reporters and include suggested scripts to introduce the stories. (See, e.g., Joe Mandese, The Art of Manufactured News, Broadcasting and Cable, March 28, 2005, at 24; David Barstow and Robin Stein, The Message Machine: How the Government Makes News; Under Bush, a New Age of Prepackaged News, New York Times, March 13, 2005, at A1.) These practices allow such externally prepackaged news stories to be aired, without alteration, as broadcast or cable news. Some of the parties contacting the Commission have suggested that broadcast licensees and cable operators may have aired VNRs with news stories containing material paid for, prepared and/or provided to them by or on behalf of commercial, governmental and other entities without Start Printed Page 24792disclosing, at the time of the airing, the source of and the circumstances surrounding their acquisition of such material.

2. With this Public Notice (PN), the Commission reminds broadcast licensees and cable operators that air VNRs, as well as all entities and individuals involved in the production and provision of the material at issue here, of their respective disclosure responsibilities under the Commission's sponsorship identification rules. These rules are grounded in the principle that listeners and viewers are entitled to know who seeks to persuade them with the programming offered over broadcast stations and cable systems. (See, e.g, Applicability of Sponsorship Identification Rules, PN, 28 FR 4732 (May 6, 1963); Sponsorship Identification Rules, Applicability, 40 FR 41936 (September 3, 1975).) For the reasons noted in this PN, and as provided for in the statutory provisions and in the Commission's rules, whenever broadcast stations and cable operators air VNRs, licensees and operators generally must clearly disclose to members of their audiences the nature, source and sponsorship of the material that they are viewing. We will take appropriate enforcement action against entities that do not comply with these rules. This PN is confined to the disclosure obligations required under section 317 and our rules thereunder, and does not address the recent controversy over when or whether the government is permitted to sponsor VNRs, which is an issue beyond the Commission's jurisdiction.

The Sponsorship Identification Rules

3. The sponsorship identification rules, which are contained in sections 317 and 507 of the Communications Act of 1934, as amended (the “Act”) (47 U.S.C. 317, 508), and sections 73.1212 and 76.1615 of the Commission's rules (47 CFR 73.1212, 76.1615), generally require that, when payment has been received or promised to a broadcast licensee or cable operator for the airing of program material, at the time of the airing, the station or cable system must disclose that fact and identify who paid or promised to provide the consideration.

4. Specifically, section 317(a)(1) of the Act provides, in pertinent part:

All matter broadcast by any radio station (The Commission has ruled that the sponsorship identification requirements also apply to origination programming by cable operators. Amendment of the Commission's Sponsorship Identification Rules (Sections 73.119, 73.289, 73.654, 73.789 and 76.221), Report and Order (R&O), 40 FR 18395 (April 28, 1975), paragraph 37 (“We see no reason why the rules for such cablecasting should be different from those for broadcasting, for the consideration of keeping the public informed about those who try to persuade it would appear to be the same in both cases.”) Under our rules, origination cablecasting is defined as “programming (exclusive of broadcast signals) carried on a cable television system over one or more channels and subject to the exclusive control of the cable operator.” 47 CFR 76.5(p). The broadcast and cable rules are substantially identical with the single exception that paragraph (c) of the broadcast rule, which pertains to reports under section 508 of the Act (which applies only to broadcasters), is not applicable to cable television. See In the Matter of Amendment of the Commission's Sponsorship Identification Rules, R&O, 40 FR 18395 (April 28, 1975).) for which any money, service, or other valuable consideration is directly or indirectly paid, or promised to or charged or accepted by, the station so broadcasting, from any person, shall at the time the same is so broadcast, be announced as paid for or furnished, as the case may be, by such person. * * *

To provide parties with the information necessary to air these disclosures, section 507(a) requires that each station employee who has accepted or agreed to accept consideration for the airing of program matter, or any person who has paid or has agreed to so pay any such employee, must disclose that fact to the station prior to the airing of the matter. Similarly, section 507(b) imposes such a duty of disclosure upon any person involved in the production or preparation of broadcast matter who receives or agrees to receive, or provides or promises to provide, such consideration. The disclosure must be made to each payee's employer, the person for whom the material is being produced, or the licensee. Section 507(c) requires this disclosure by anyone who supplies broadcast matter to the person to whom he or she provides the matter. In this way, the information must ultimately be provided up the chain of production and distribution, before the time of broadcast, to the licensee so that it can timely air the required disclosure.

5. Moreover, section 317(b) of the Act requires that any broadcast station that has received such information pursuant to section 507 must air the section 317 announcement, as if the consideration was paid to the station for airing the broadcast matter, even if the station itself received no such consideration. (See, e.g., Letter to Mr. Earl Glickman, President, General Media Associates, Inc., 3 FCC 2d 326 (1966); KMAP, Inc., Memorandum Opinion and Order, 44 FCC 2d 971 (1974).) Section 317(c) requires each licensee to “exercise reasonable diligence to obtain from its employees, and from other persons with whom it deals directly in connection with any program or program matter for broadcast, information to enable such licensee to make the announcement required by this section.”

6. Based upon these requirements of section 317 of the Act, the Commission's rules require broadcasters (section 73.1212) and cable operators (section 76.1615), where appropriate, to inform their audience, at the time of airing: (1) That such matter is sponsored, paid for or furnished, either in whole or in part; and (2) by whom or on whose behalf such consideration was supplied. The announcement must fully and fairly disclose the true identity of the person or persons, or corporation, committee, association or other incorporated group, or other entity by whom or on whose behalf such payment is made or promised, or services or other valuable consideration is received, or by whom the material or services received by the licensee or operator are furnished. Where an agent or other person or entity contracts or otherwise makes arrangements with a station or cable system on behalf of another, and that fact is known or, by the exercise of reasonable diligence could be known to the station or system, the announcement should disclose the identity of the person or persons or entity on whose behalf the agent is acting, rather than the agent. (47 CFR 73.1212(e), 76.1615(d).)

7. In situations in which a broadcast licensee has not directly received or been promised consideration, has not received any section 507 report that material has been paid for from its employees or others that must make such reports pursuant to that section of the Act, and, acting with the requisite diligence, has no information concerning the making of such promise or payment, section 317(a)(1) of the Act provides generally that no sponsorship identification is necessary with regard to material that is furnished to the licensee “without charge or at a nominal charge.”

Political and Controversial Issue Programming

8. The sponsorship identification rules impose upon broadcast licensees and cable operators a greater obligation of disclosure in connection with Start Printed Page 24793political material and program matter dealing with controversial issues. The Commission has noted that, particularly in the case of such programming, audience members are “entitled to know when the program ends and the advertisement begins.” (Richard Kielbowicz and Linda Lawson, “Unmasking Hidden Commercials in Broadcasting: Origins of the Sponsorship Identification Regulations, 1927-1963,” Fed. Comm. L.J. 329 at 344 n. 80 (2004) citing FCC, Public Service Responsibility of Broadcast Licensees 47 (1946).) Congress has acknowledged the danger that groups advocating ideas or promoting candidates, rather than consumer goods, might be particularly inclined to attempt to mask their sponsorship in order to increase the apparent credibility of their messages. (56 Fed. Comm. L.J. at 338.) Thus, deviating from the general rule contained in section 317(a)(1) that no sponsorship identification announcement is necessary if material is provided to a station free or at a nominal charge, section 317(a)(2) of the Act enables the Commission to require such an announcement regarding material so provided, if the programming involves political material or the discussion of a controversial issue.

9. Consistent with this statutory provision, both the broadcast rule (section 73.1212(d)) and the cable rule (section 76.1615(c)) expressly require the airing of sponsorship disclosure in such situations. In contrast to the general disclosure requirement that a single announcement be made at the time of airing of the material, for political or controversial programming of more than five minutes' duration, the announcements must be made both at the beginning and the conclusion of the airing of the material. (47 CFR 73.1212(d), 76.1615(c). For political or controversial programming that is five minutes or less in duration, only one announcement must be made, at the beginning or the end of the material. Id.) Moreover, if a corporation, committee, association or other unincorporated group or other entity is paying for or furnishing the broadcast matter, the station must include, for public inspection at the location of its public file (47 CFR 73.3526, 73.3527), a list of the chief executive officers or members of the executive committee or of the board of directors of such corporation, committee, association, other unincorporated group or other entity. (47 CFR 73.1212(e).)

Request for Comments

10. In addition to reminding broadcast licensees, cable operators, and others, pursuant to this PN, of their respective disclosure responsibilities under the Commission's sponsorship identification rules, the Commission seeks comment on VNRs and their use by broadcast licensees and cable operators. With this more detailed information, we will be better positioned to monitor this area and ensure that broadcast licensees, cable operators and others comply with our rules. To this end, we seek comment on the ways in which VNRs are used in programming, and on which practices are the most common. For example, we also seek comment on whether the entities producing or providing VNRs, including the government, pay broadcast licensees and cable operators to air VNRs, or whether the VNRs are provided free of charge, without separate payment or consideration. Are mechanisms in place to ensure that broadcast licensees and cable operators receive notice regarding the payment of consideration from all individuals and entities that are involved in the production and provision of VNRs? Are mechanisms in place to ensure that broadcast licensees and cable operators receive notice regarding the identity of entities providing programming involving political material or the discussion of controversial issues of public importance? Do broadcast licensees and cable operators receive VNRs as part of an overall news service, which may be provided under contract or on a subscription basis? If so, should this affect the applicability of our sponsorship identification rules? Finally, we seek comment on whether there are alternative or better means of ensuring proper disclosure concerning VNRs in addition to those prescribed by the existing rules. The Commission intends to issue a report, or initiate a more formal proceeding, as appropriate, on the comments received in response to these questions about VNRs forthwith. Although we seek comment on the use of VNRs in this Notice, we emphasize that the rules remain in effect and that we will continue to investigate complaints and enforce the rules during the pendency of this proceeding.

Conclusion

11. In sum, the Commission acknowledges the critical role that broadcast licensees and cable operators play in providing information to the audiences that they serve. This information is an important component of a well-functioning democracy. Along with this role comes the responsibility that licensees and operators make the sponsorship announcements required by the foregoing rules and obtain the information from all pertinent individuals necessary for them to do so. We remind all such licensees and operators, as well as those involved in the production and provision of the material that they air, that they must strictly adhere to the foregoing requirements and to fully meet their responsibilities under them.

12. The Commission will investigate any situation in which it appears that these requirements of the law may have been violated and will order administrative sanctions against its regulatees, including the imposition of monetary forfeitures and the initiation of license revocation proceedings, where such action is appropriate. In addition to these sanctions that the Commission may impose, we note that the criminal penalty for violation of the disclosure requirements of section 507 of the Act is a fine of up to $10,000, imprisonment of not more than a year, or both. (47 CFR 508(g).)

Procedural Matters

13. Ex Parte Rules. There are no ex parte or disclosure requirements applicable to this proceeding pursuant to 47 CFR 1.1204(b)(1).

14. Comments Information. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using: (1) The Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (May 1, 1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://www.fcc.gov/​cgb/​ecfs/​ or the Federal eRulemaking Portal: http://www.regulations.gov. Filers should follow the instructions provided on the Web site for submitting comments.

In completing the transmittal screen, ECFS filers should include their full name, U.S. Postal Service mailing address, and the applicable docket number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions, filers should send an e-mail to ecfs@fcc.gov, and include the following words in the body of the message, “get form.” A sample Start Printed Page 24794form and directions will be sent in response.

Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington DC 20554.

People with Disabilities: Contact the FCC to request materials in accessible formats (braille, large print, electronic files, audio format, etc.) by e-mail at FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0531 (voice), 202-418-7365 (TTY).

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Federal Communications Commission.

Marlene H, Dortch,

Secretary.

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[FR Doc. 05-9105 Filed 5-10-05; 8:45 am]

BILLING CODE 6712-01-P