FCC Underwriting Rules

How Well Do You Know FCC Underwriting Regulations? Each Wrong Answer Costs Thousands

Which of the following would you air on your station?  The FCC has OKed some of the following and "no" to others:

Prindle GMAC Real Estate announcements - “we’re all about family” and “we love selling real estate”

Tastee Freeze - products were “tastefully decorated” Listeners were asked "(are you) planning a special occasion” 

The School House - products sold included “creative learning materials”

Above are highlights of underwriting announcements which NCE WCVZ-FM, South Zanesville, OH aired in August 2003.  A complaint accused its owner, Christian Voice of Central Ohio, of airing ten different prohibited commercials.  The FCC proposed a $20,000 forfeiture; the station said the FCC erred concerning the three spots above and requested the fine be reduced or cancelled.

After reconsideration the FCC still believed that two of the spots were promotional, designed to favorably distinguish itself from competitors and thereby help the business make money.  Since WCVZ-FM had no previous compliance problems, and one of the three was deemed OK, the FCC reduced the fine to $9,000.  The acceptable spot, upon reconsideration, was deemed within the licensee’s discretion under Commission precedent.

Do you know which spots resulted in fines and which were OK?  Use your judgment .... and read the answer at the very bottom of the page.  Remember, this is not hypothetical.  These are real announcements on a real station.

(WCVZ-FM later got its license changed from non-commercial to commercial.)

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Question:  Can an NCE promote a "free meal at Golden Corral for all veterans on Veterans Day?"

Answer: NCEs can air news about businesses and have a "Community Calendar." Once a station manager accepts any compensation including food, the spot becomes illegal as "payola" and  an illegal commercial.  Suggestion: have the local VFW invite all veterans for a free meal. Legally the spot then is for a non-profit organization, rather than for a business.  (It is irrelevant that the food is donated by the restaurant to the VFW.)

Suggested Copy: This Salute To Veterans has been sponsored by Golden Corral Buffet and Grill - Home of the Great Steak Dinner Buffet - Featuring made-from-scratch mashed potatoes, salads, vegetables, desserts and more. Every night is for steak lovers at Golden Corral...2618 Presidential Blvd.

Questions: GREAT Steak Dinner Buffet is the name of their buffet...what about use of the word GREAT? They like the wording FRESH vegetables but I figure I should cut FRESH. Can I make the LIST of items available where I've said FEATURING?

Discussion:
Eric - I am more cautious than some, and more daring than others. If The Great Steak Dinner Buffet is trademarked, or printed on much of their marketing collateral, I would use it. But fresh is qualitative. "Featuring" sounds more risky than "featured dishes" for the term "featured dishes" is restaurant lingo while featuring is more of a general marketing term. Just my 2 cents. I also tend to use slight vocal inflections on words that can be differentiating descriptors of services.

Michelle - Home of the great steak dinner buffet" can be seen as comparative to other buffets that may not have such a great steak.  "Every night is for steak lovers" can be seen as a call to action.. it can also be seen as promotional. 

The FCC recently enforced on "menu listing" of items. In the other 
case, the NCE was underwriting a satellite dealer for DISH Network and the 
announcement was listing a sample of the channels that are available. 

Eric - Personally, I believe the "thank you" shows your intent to produce something that is non-promotional. Rich and John had concerns about the Home of "The Great Steak Dinner Buffet" and the Every night is steak night. If the first is a trademarked, or heavily marketed tagline that goes with their business, I believe it conforms with the FCC regulations. 

The old KFC tagline that said "We do chicken right" implied that others did not, but non-comm PBS ran it [and I am certain their lawyers evaluated it]. The latter statement is factual, and clearly a description of services. By adding a "thank you" on the end (something commercial stations do not do), I believe the FCC will recognize your intent for the spot to be non-commercial. And remember, INTENTION is outlined by the FCC as the barometer for ambiguity in the sponsorship spots.

Question: Eric added the line "Thank you Golden Corral Buffet and Grill for supporting 107.9FM".  Does every sponsor announcement need to include a similar comment stating the sponsor is in some way "supporting" the station? 

Answer: Yes, the underwriter / sponsor of all programs and spots must be identified and acknowledged.

Question:  Can an NCE have advertising on a subchannel? RDS text system? Its website? Its signal delivered via cable? In a related paper or advertising?

Answer: Yes. Yes. Yes. Yes.  Commercials are only prohibited on a station's primary over-the-air-signal. 

Question: Could we air a paid announcement saying "XYZ auction company is holding an auction at 9876 Oak Drive on Saturday at 2 pm. Items to be auctioned include furniture, cars and real estate."
John Schad, LPFM Operator and automation manufacturer

Answer: Probably no.  The propose of an underwriting announcement is to "identify but not promote" (a business).  It is obvious that the auction company wants listeners to "show up at 2pm on Saturday."  Is this the same as telling people that a paid concert will be held at 2pm?  Unless someone get reported to the FCC we will never know absolutely.

Here are two spots that would be legal: 
"An auction will be held at 2pm at First Church to benefit the church's expansion plans."

"We welcome XYZ Auction Company as an underwriter.  XYZ holds auctions in the local area for items like furniture, automobiles, and real estate. Their phone number is 123-4567 and their website is XYZauction.com/schedule."   If listeners chose to call or visit the website, they will learn about the Saturday auction.  It would be OK to do more underwriting in the days before the auction if these rules are followed.

Question: Where on the FCC site can we find out about LPFM's and the self-promotions fundraising that we are allowed to do..?? Randy Bennett, WCEE-LP, Melbourne, FL

Answer: Very good question.  We do not know the exact regulation. Do you?

ANSWER TO THE TOP STORY question:  The School House spot was OK; the other two were not.