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FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
Adopted: December 20,
2000
Released: December 22,
2000
In Reply Refer to:
EB-00-IH-0078
EB-00-IH-
0135/0136/0137/0138
CMW
Thomas W. Dean, Esq.
Litigation Director
NORML Foundation
1001 Connecticut Ave., N.W.
Suite 710
Washington, D.C. 20036
Dear Mr. Dean:
This letter terminates the Enforcement Bureau's investigation of
NORML1 Foundation's February 17, 2000, complaint against ABC
Television Network (``ABC''), CBS Corporation (``CBS''),2
National Broadcasting Company, Inc. (``NBC''); Fox Broadcasting
Company, Inc. (``Fox''), and The WB Television Network (``WB'')
(collectively, the ``Networks''). NORML alleges that the
Networks entered into agreements with the Office of National Drug
Control Policy (``ONDCP''), whereby the Networks received
compensation from the ONDCP in return for airing programming that
contained anti-drug or anti-alcohol themes. NORML further
alleges that the Networks did not disclose such compensation in
violation of the sponsorship identification requirements of 47
U.S.C. §§ 317 and 508, and 47 C.F.R. § 73.1211. The Enforcement
Bureau issued letters of inquiry to the Networks on April 18,
2000, and each network filed a separate response. By letter
dated, June 22, 2000, NORML filed a consolidated reply to the
Networks' responses. For the reasons set forth below, we find no
basis to take enforcement action.
BACKGROUND
In 1998, Congress passed legislation requiring the ONDCP to
conduct a national media campaign in an effort to reduce and
prevent drug abuse by young people in the United States. See 21
U.S.C. § 1801. The legislation required that funds spent by the
ONDCP on its national media campaign must ``be matched by an
equal amount of non Federal funds for the national media
campaign, or be matched with in-kind contributions of the same
value.'' 21 U.S.C. § 1802(c).
As part of its National Anti-Drug Media Campaign, the ONDCP
entered into arrangements with the Networks, beginning in 1998
and continuing at least as of the date of the Networks'
responses, whereby the Networks would be compensated for airing
anti-drug/anti-alcohol messages. There are apparently no written
agreements between the ONDCP and the Networks. Rather, the
Networks' responses to our inquiries state that the
understandings were reached through numerous memorandums,
letters, e-mails, phone calls, meetings, and spot orders. In
addition, the ONDCP's expectations of the Networks are set forth
in guidelines entitled ``Statement of Pro-Bono Match Program and
Guidelines,'' ``Pro Bono Media Match Guidelines,'' and ``ONDCP
`Match' Guidelines'' (collectively referred to as the
``Guidelines''), copies of which were attached to the responses
submitted by CBS, NBC, and Fox. These Guidelines were revised
periodically and apparently distributed to the Networks.
At the outset, the ONDCP purchased advertising spots on each of
the Networks with the understanding that the Networks would
``donate a matching amount of media time and space.''
``Statement of Pro-Bono Match Program and Guidelines,'' Executive
Summary, Exhibit B to Fox response. The ONDCP allowed the
Networks to obtain matching credit for the broadcast of public
service announcements (``PSAs'') provided by the ONDCP; the
broadcast of programs containing story lines depicting the
consequences of drug or alcohol abuse; and for undertaking other
non-broadcast community initiatives designed to educate young
people about the negative consequences of drug and alcohol use.
The Networks were required to satisfy at least 51% of their
matching obligations by the broadcast of PSAs, but were free to
determine how to satisfy the remaining matching obligations,
within the parameters outlined in the Guidelines. All five of
the Networks chose to satisfy part of their matching obligations
by broadcasting programming with anti-drug or anti-alcohol
themes.
DISCUSSION
Section 317(a)(1) of the Act provides, in pertinent part, that:
All matter broadcast by any radio station for which
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.
47 U.S.C. § 317(a)(1).
Similarly, Section 73.1212(a) of the Commission's rules provides:
When a broadcast station transmits any matter for which
money, service, or other valuable consideration is
either directly or indirectly paid or promised to, or
charged or accepted by such station, the station, at
the time of the broadcast, shall announce:
(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 ...
47 C.F.R. § 73.1212.
Section 507 of the Act requires both producers and suppliers of
programs to report the receipt of any such consideration to the
licensee or licensees over whose facilities the program is to be
broadcast. 47 U.S.C. § 508(b). Moreover, in cases where such
disclosure is made, appropriate sponsorship identification is
required. 47 U.S.C. § 317(b).
Sponsorship identification requirements were first imposed upon
broadcasters by the Radio Act of 1927 and the basic purpose of
such requirements has not changed since that time: ``listeners
[and viewers] are entitled to know by whom they are being
persuaded.'' Applicability of Sponsorship Identification Rules,
40 FCC 141 (1963), as modified, 40 Fed Reg. 41936 (September 9,
1975).3 Thus, the audience must ``be clearly informed that it is
hearing or viewing matter which has been paid for, when such is
the case, . . . and the person paying for the broadcast of
matter [must] be clearly identified.'' Midwest Radio-Television,
Inc., 49 FCC 2d 512, 515 (1974), citing National Broadcasting
Company 27 FCC 2d 75 (1970). The language of the statute is very
broad, requiring sponsorship identification if any type of
valuable consideration is directly or indirectly paid or
promised, charged or accepted. The Commission has consistently
upheld these strict identification requirements. Universal
Broadcasting Co. of Minneapolis-St. Paul, Inc., 51 FCC 2d 597,
602 (1975), forfeiture reduced, 58 FCC 2d 1367 (1976), citing
Sponsorship Identification Rules, 34 FCC 829, 894 (1963) (The
Commission's ``strict identification requirements'' should not be
relaxed because ``[p]aramount to an informed opinion and wisdom
of choice . . . is the public's need to know the identity of
those persons or groups who elicit the public's support.'').
NORML asserts that the ONDCP ``used financial incentives to get
television networks to work anti-drug messages into the scripts
of some popular TV shows.'' NORML complaint at 2. NORML
contends that the public has a right to know that the Networks'
programming is being influenced by the ONDCP and that the failure
to disclose such information violates the Commission's
sponsorship identification requirements.
The Networks claim that the broadcast of programming with anti-
drug/anti-alcohol themes did not require sponsorship
identification. WB argues that this case is similar to other
situations where the Commission found that sponsorship
identification was not required. Specifically, WB states that
the Commission ``has made clear that no [sponsorship
identification] announcement is required where a government or
private entity provides a press release to a broadcaster, which
uses editorial comment therefrom on a program; when a university
makes a professor available to give lectures on a broadcast
program; or when a bus company produces a scenic travel film
which it provides for free, even if one of its busses is
fleetingly shown.'' WB response at 6, citing Applicability of
Sponsorship Identification Rules, 40 FCC 141 (1963), as modified,
40 Fed Reg. 41936 (September 9, 1975), referring to examples 11,
19, and 26.
The Networks also argue that no sponsorship identification is
required because at the time the programs were broadcast they did
not know whether or not matching credit would be obtained, citing
to Metroplex Communications, Inc. (WHYI-FM), 5 FCC Rcd 5610
(1990), review denied sub nom. Southeast Florida Broadcasting
Limited Partnership v. FCC, 947 F.2d 505 (D.C. Cir. 1991). In
some cases the programs were submitted for approval prior to
broadcast, but in all cases, approval was not obtained until
after the original broadcast. Even those Networks that sought
ONDCP's ``technical'' advice with respect to the handling of
certain themes,4 claim that such discussions were completely
separate from the process by which matching credit was obtained.
5 Additionally, the Networks assert that they would have
broadcast programs with such themes even without their
understanding with the ONDCP and, in fact, that prior to reaching
their understanding, they had aired such shows. Finally, ABC,
CBS, Fox, and WB argue that in some cases programs were not
awarded matching credit and that had they aired sponsorship
identification, it would have been misleading to the public.
NORML acknowledges the Networks' concern about airing sponsorship
identification prior to actually receiving the ONDCP's approval
of programs for credit. However, despite this issue, NORML, in
paraphrasing the statute, argues that sponsorship identification
is required because ``certain matters were broadcast (anti-drug
messages imbedded in program content) for which valuable
consideration (match credit) was indirectly paid (by freeing up
ad time to sell), promised (through the Guidelines), charged (by
submission by the networks of materials for credit) or accepted
(on numerous occasions), by the station so broadcasting (all of
the television networks in question), from a person (ONDCP)
without any announcement that such payment was made.'' NORML
reply at 6. Moreover, NORML contends that where the Networks
submitted a script to the ONDCP prior to the broadcast of a
program, or where the Networks consulted ONDCP as to the program
content, the Networks had a ``reasonable expectation'' that they
would be given matching credit for the program. Finally, NORML
asserts that the Networks should have at least included
sponsorship identification messages when they rebroadcast
programming for which the ONDCP had already approved credit,
especially if additional credit was obtained for the rebroadcast.
There are two fundamental issues in this case. First, did the
credit that the Networks received toward satisfaction of matching
obligations constitute consideration for broadcasting programming
with anti-drug and anti-alcohol themes? Second, if so, was such
consideration paid or promised, charged or accepted, prior to the
broadcast of the programming at issue?
The Networks were obligated to donate a matching amount of media
time for every advertising spot purchased by the ONDCP. Thus, we
find that any credit toward that obligation that the Networks
received for the broadcast of programming with anti-drug and
anti-alcohol themes constitutes consideration. This case is
clearly distinguishable from the examples cited by WB, where the
Commission found no consideration was received. In all of the
cited examples, the broadcast station received material from an
outside source, but aside from the provision of material, did not
receive any consideration for its broadcast. In this case, the
Networks actually received consideration for the broadcast of the
material at issue. Moreover, in all of the cited examples, the
Commission made clear that if consideration in addition to the
provision of service or property were provided, sponsorship
identification would be required. 40 Fed Reg. at 41938 at
subheading D and n. 3.
We similarly reject the Networks' arguments that sponsorship
identification is not required because the Networks were
broadcasting anti-drug and anti-alcohol material prior to the
establishment of the ONDCP's National Anti-Drug Media Campaign in
1998. The Commission has found that sponsorship identification
is required even when the licensee had previously broadcast
similar programming without receiving compensation.6 See Waiver
of Requirements of Section 317 of the Communications Act Granted
to State Broadcasters' Association in Connection with NCSA Plans,
45 FCC 2d 655, 656 (1974) (subsequent history omitted)
(sponsorship identification necessary despite the fact that
``contributing organizations had for many years received time,
announcements and similar cooperation from radio stations without
regard to any contribution made to the Association.''). If
compensation was paid or promised, charged or accepted at the
time of the broadcast, sponsorship identification is required
even if the station has previously aired such programming without
receiving compensation.
A more difficult issue presented in this case is whether or not
at the time of the original broadcast of a program, the
consideration had been paid or promised, charged or accepted.
While there is no doubt that there was an understanding between
the Networks and the ONDCP, it is difficult to find that such an
understanding rose to the level of a promise to compensate the
Networks for the broadcast of specific program material.
Instead, at most, ONDCP promised that it might compensate the
Networks for programming that contained anti-drug or anti-alcohol
themes. The record indicates that compensation was never
provided prior to the original broadcast of a program. Moreover,
while the Guidelines provide insight as to what types of
programming might be eligible for compensation, the Guidelines
are very subjective, providing only general ideas as to the
themes the ONDCP would consider appropriate for matching credit.
There is no certain guarantee of compensation. In fact, the
information before us reveals that in a significant number of
cases, the ONDCP rejected the Networks' submission of programming
for matching credit. Even where the Networks or program
producers sought the ONDCP's ``technical advice,'' there does not
appear to have been a promise of compensation, notwithstanding
the fact that the Networks' anticipation of compensation may have
been greater in such cases. In such circumstances, we cannot
find that the Networks violated our sponsorship identification
rule. Indeed, had the Networks indicated that they had received
consideration or a promise of consideration from the ONDCP in
connection with all the programs, the result for a not
insignificant number of the programs would have been to mislead
the public into believing the ONDCP was a sponsor when it was
not. This would run counter to the purpose of the rule. While
the interest of providing full information to the public might
have been served by disclosure that consideration from the ONDCP
might be received in the future, we find nothing in the statute
or the rules requiring disclosure of such possible future
consideration.
Finally, we look to whether or not sponsorship identification was
required for the repeat broadcast of a program for which the
Networks already received matching credit. The facts before us
reveal that the Networks did broadcast repeat programs and did
receive matching credit for having done so, although usually at a
lower percentage than the original broadcast. The record is,
however, unclear as to whether or not the Networks had already
received matching credit for the original broadcasts at the time
the repeat broadcasts were aired. To the extent that credit had
already been obtained for the original broadcasts and the
Networks were aware that they would be compensated for repeat
broadcasts, there was more than just a mere anticipation of
possible compensation. Thus, in those cases, sponsorship
identification is required and we caution the Networks to do so
in the future. Given the complexity of this situation, however,
we do not believe that a sanction is warranted for any repeat
broadcast of programs that did not contain appropriate
sponsorship identification. The need to include sponsorship
identification in the repeat broadcasts was perhaps not clear to
the Networks, and certainly not clear to stations that broadcast
network programming (particularly those that are not owned by the
Networks).
Accordingly, for the reasons set forth above, we will not take
any further enforcement action in response to NORML's complaint
and we consider this matter closed.
This action is taken under delegated authority pursuant to
Sections 0.111 and 0.311 of the Commission's Rules, 47 C.F.R. §§
0.111, 0.311.
Sincerely,
David H. Solomon
Chief, Enforcement Bureau
cc: Mr. Franco Garcia, Executive Counsel, Corporate Legal
Affairs, ABC, Inc.
Mr. Martin D. Franks, Executive Vice President, CBS
Ms. Diane Zipursky, Vice President, Washington Law and
Policy, NBC, Inc.
John C. Quale, Counsel for Fox Broadcasting Company, Inc.
Christopher G. Wood, Counsel for The WB Television Network
_________________________
1 NORML is an acronym for the National Organization for the
Reform of Marijuana Laws.
2 Subsequent to the filing of the complaint, CBS Corporation
merged with Viacom, Inc., with Viacom becoming the surviving
parent corporation. Since this matter involves CBS Television
Network programming, for clarity we will refer to the company as
CBS throughout this letter.
3 See also Loveday v. FCC, 707 F.2d 1443 (D.C. Cir. 1983), cert.
denied, 464 U.S. 1008 (1983), for a detailed discussion of the
legislative history of sponsorship identification requirements.
4 In two episodes, WB added a tag line to the program
acknowledging that it received technical assistance from the
ONDCP. Specifically, the tag line stated: ``Technical Guidance
Provided by the Office of National Drug Control Policy Education
Branch.'' WB response at 5. Such a disclosure would not,
however, satisfy any sponsorship identification requirement as it
does not reveal that consideration was received for the broadcast
of the program. See Midwest Radio-Television, Inc., 49 FCC 2d
512 (1974).
5 Exhibit D to the ``Statement of Pro-Bono Match Program and
Guidelines,'' April 21, 2000, states that the ONDCP's technical
assistance and consultation services are ``entirely separate from
the Pro-Bono Match process and in no instance will people
associated with the Strategic Message Review process be involved
with providing technical assistance or consultation.'' See
Exhibit B to Fox's response.
6 ABC states that some of the programs for which it received
matching credit were actually aired prior to the time it reached
an understanding with ONDCP. Where the programs were broadcast
prior to any understanding between ABC and the ONDCP regarding
the National Anti-Drug Media Campaign, there is no question that
sponsorship identification would not be required.