The Federal Communications Commission should update its sponsorship identification guidelines with examples relevant to modern issues and improve communication with the targets of FCC investigations, according to a recent report by the U.S. Government Accountability Office.
“Recognition of sponsored programming has become increasingly difficult because of new technologies and increased access to sponsored programming such as video news releases,” the GAO said. The agency’s investigation and report were requested by Reps. Nancy Pelosi (D-Calif.) and Henry Waxman (D-Calif.).
Existing sponsorship identification statutes and regulations mandate that licensed broadcasters operating television and radio stations and cable operators that originate programming must disclose on-air when a party gives money or a payment in kind for the broadcast of programming content.
While the GAO reported that most broadcasters could generally identify commercial content and comply with existing requirements, modern technology and advertising methods have raised some new questions. A reality television show may accept money to prominently feature a brand of soft drink or a news program may accept money to broadcast a prerecorded segment on allergy medication, for example.
Another problem for broadcasters: video news releases. VNRs are prepackaged news stories that may include only film footage or may also include a suggested script, the GAO explained. Facing shrinking budgets and appreciative of free material, broadcasters may use a portion of a VNR or even the entire piece.
According to the FCC, broadcasters should always air a sponsorship announcement when using VNRs. But some broadcasters told the GAO they believe VNRs should be treated akin to a press release, particularly if only a portion of the content is used and it was provided free of charge. In one example, a news program might use VNR footage of the interior of a car manufacturing plant because it doesn’t otherwise have access to the plant. Broadcasters were divided about how to handle such a situation and the FCC should step in and provide guidance, the GAO advised.
“FCC guidance for the sponsorship identification requirements has not been updated in nearly 50 years to address more modern technologies and applications,” the GAO wrote. Therefore, the agency should “initiate a process to update its sponsorship identification guidance and consider providing additional examples relevant to more modern practices,” including the use of VNRs.
The report also documented the FCC’s investigation and enforcement process for complaints related to sponsorship. Most complaints do not end with an enforcement action, the GAO found. But the FCC rarely – if ever – communicates to broadcasters that an investigation has been closed. While the report acknowledged that the agency has no legal obligation to communicate with the broadcaster named in the complaint, the GAO said the FCC concluded that broadcasters should be provided with more information.
Despite objection from the FCC, based on its determination that it does not have the resources for increased communication and its concern that informing broadcasters an investigation is closed might be interpreted as an endorsement of the action being questioned, the GAO recommended greater transparency. “By providing this information, for cases in which the FCC conducts a full investigation and determines the broadcaster’s actions not to be a violation of requirements, the outcome could provide guidance to the broadcaster of allowable activities.”
To read the GAO’s report, click here.
Why it matters: The FCC’s goal of protecting the listening and viewing public requires the agency to hold broadcasters to a basic principle: the public is entitled to know when and by whom it is being persuaded. To reach that end, the GAO made three recommendations: First, the FCC should update its guidance on product integration notices to keep pace with technology and changing marketing practices. Secondly, the agency should improve communication with broadcasters during the investigation and enforcement process. Finally, the FCC should complete its investigations in an expeditious manner and it should develop goals for completing sponsorship identification cases within a specific time frame. As the process unfolds, we will keep you apprised of the FCC’s actions.