FR Doc 05-9105

[Federal Register: May 11, 2005 (Volume 70, Number 90)]
[Notices]
[Page 24791-24794]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my05-44]

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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 05-171; FCC 05-84]

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

AGENCY: Federal Communications Commission.

ACTION: Notice.

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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.

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

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

[[Page 24792]]

disclosing, 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

[[Page 24793]]

political 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

[[Page 24794]]

form 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).

Federal Communications Commission.
Marlene H, Dortch,
Secretary.
[FR Doc. 05-9105 Filed 5-10-05; 8:45 am]

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