You said what? The perils of content-based regulation of public broadcast underwriting acknowledgments.

• Author: Cotlar, Andrew D.

1. STATUTORY AND ADMINISTRATIVE PROHIBITIONS AGAINST THE BROADCAST OF ADVERTISEMENTS II. INCONSISTENCY IN IDENTIFYING QUALITATIVE OR COMPARATIVE DESCRIPTIONS III. THE FIRST AMENDMENT IMPACT OF INCONSISTENT CONTENT-BASED ENFORCEMENT IV. A NEW APPROACH: TIME LIMITS WITHOUT CONTENT REGULATION V. CONCLUSION Public broadcast stations in the United States are forbidden to air promotional announcements in exchange for payment from commercial entities. (1) However, under the FCC's sponsorship rules, these stations must acknowledge any financial contribution from donors that support particular programs. (2) Consequentially, public broadcast stations must broadcast information--so-called "underwriting" acknowledgements--regarding those individuals and companies that fund particular programs without promoting the goods and services offered by those donors. In particular, the FCC has interpreted this to prohibit the following: (a) qualitative or comparative descriptions; (b) price information; (c) calls to action; or (d) inducements to buy, sell, rent, or lease. (3) From a legal point of view, these sets of prohibitions distinguish underwriting announcements aired on public broadcast stations from commercial messages aired on their commercial counterparts.

   As modern advertising practices quickly move away from the traditional model of comparing the quality of an advertiser's product with its competing products toward "image spots" (where claims about the product are frequently absent), the FCC rules tend to look more and more like an anachronism. To illustrate, many commercial spots can be seamlessly transferred (sometimes with little or no editing) to serve as underwriting spots in a way that seems to blur in the public mind the distinction between commercials and nonpromotional underwriting acknowledgement. While the FCC has attempted to maintain the conceptual distinction between promotional and nonpromotional depictions, it has struggled to apply its traditional notion of what it means to be promotional within the context of this evolution in advertising practice.

   As a result, many noncommercial educational licensees find it difficult to apply the FCC's four categories of prohibited expression, because FCC enforcement has been less than a model of clarity. While the prohibition against providing price information, calls to action, or inducements to buy, sell, rent, or lease are fairly straightforward, a careful analysis of how the FCC determines whether certain content is qualitative or comparative yields the unmistakable conclusion that the entire process has become a clear lesson in the perils of content-based regulation. Stations therefore frequently lack a clear directive to guide their decisionmaking, leading many stations to act either too cautiously or not cautiously enough. Indeed, stations must rely on the FCC's own, often quite subjective, understanding of the context in which certain words are uttered, resulting in confusing results and inconsistent enforcement.

   What follows is an inconsistent and opaque enforcement system that subjects nonprofit entities to potentially economically crippling fines and impinges on the editorial integrity that is the hallmark of their First Amendment liberties. This Article concludes that Congress should revise the prohibition on promotional messages in favor of allowing limited commercial content--namely, eliminating any restrictions on content as long as announcements do not interrupt programming and are limited in length. This solution would get the FCC out of the business of content-analysis, would preserve the integrity of public broadcasting, and would be consistent with what surveys demonstrate is the public's attitude toward commercialism in the nonprofit media.

   Part I of this Article examines the statutory and administrative prohibitions against the broadcast of advertisements on public broadcast stations. Part II demonstrates how the prohibitions are inconsistently applied, thus leading to a standard that is difficult to follow. This part further explains how the FCC has unsuccessfully attempted to apply its traditional rules to the context of new advertising techniques. Part III explains why this inconsistent enforcement of content-based regulation, coupled with the potential for substantial fines, has the potential to interfere with the First Amendment liberties of public broadcasters. Lastly, Part IV proposes a legislative solution that allows limited commercialization on public broadcast stations without either compromising the integrity of the service or requiring the examination of content by governmental agencies.

1. STATUTORY AND ADMINISTRATIVE PROHIBITIONS AGAINST THE BROADCAST OF ADVERTISEMENTS

   Section 399b of the Communications Act states that "[n]o public broadcast station may make its facilities available to any person for the broadcasting of any advertisement." (4) An "advertisement" is defined by the Act as:

   any message or other programming material which is broadcast or otherwise transmitted in exchange for any remuneration, and which is intended--

   (1) to promote any service, facility, or product offered by any person engaged in such offering for profit;

   (2) to express the views of any person with respect to any matter of public importance or interest; or

   (3) to support or oppose any candidate for political office. (5)

   The Commission has incorporated the ban on advertisements into its rules as well, stating:

   Each station shall furnish a nonprofit and noncommercial broadcast service.... No promotional announcements on behalf of for profit entities shall be broadcast at any time in exchange for the receipt, in whole or in part, of consideration to the licensee, its principals, or employees. However, acknowledgements of contributions can be made. The scheduling of any announcements and acknowledgements may not interrupt regular programming. (6) As the language above indicates, FCC rules generally track the statutory language. FCC rules forbid public television stations from accepting something of value--"consideration" (7)--in exchange for broadcasting promotional announcements on behalf of for-profit entities. This includes not only money but also goods, services, facilities, and in some limited circumstances, the programming itself. (8) Public television stations are, however, permitted to accept something of value in exchange for broadcasting Promotional announcements on behalf of nonprofit organizations. (9) And public television stations are allowed to promote the sponsored events of for-profit entities, such as concerts, if the station receives no economic benefit in exchange for the promotion. (10) The ban on commercial advertisements extends to the on-air acknowledgment of donor contributions, which must announce the source of funding for programs. (11) Such acknowledgments must be made for identification purposes only (12) and should not promote the contributor's products, services, or company, nor should they interrupt programming. (13) For violations of its underwriting regulations and policies, the FCC has imposed sanctions on stations ranging from a letter of admonishment to substantial fines, called "forfeitures." (14)

   Precisely what distinguishes a "promotional" underwriting announcement from one that merely identifies the sponsor has been the subject of a number of FCC orders and a variety of administrative rulings. (15) From these orders and rulings, the FCC has established that announcements containing one or more of the following are not permissible: (a) qualitative or comparative descriptions (e.g., "reliable," "convenient," "best"), (b) price information (e.g., "$34 for a haircut"), (c) calls to action (e.g., "Stop by our showroom to see a model"), or (d) inducements to buy, sell, rent, or lease (e.g., "special gift for the first 50 visitors," "financing is available"). (16)

   However, since the passage of the Public Broadcasting Amendments of 1981, (17) which liberalized underwriting practices, the FCC has allowed the practice of what is prosaically called "enhanced underwriting," authorizing noncommercial educational stations to acknowledge corporate donors by including (1) "logograms" (18) or slogans that "identify and do not promote," (2) information regarding the location (including the telephone number) of the donor, (3) "value neutral descriptions of a product line or service," and (4) "brand and trade names and product or service listings." (19) Nevertheless, the FCC has emphasized that such announcements could not include qualitative or comparative language such as found in most advertisements, (20) nor should they "promote the contributor's products, services or company." (21)

   Since 1986, the FCC has preferred to develop its standards on a case-by-case basis through the issuance of advisory opinions, warning letters (some unpublished), and informal adjudication. (22) Most recently, the FCC has increasingly used the consent decree as a means to enforce its underwriting rules. (23) The FCC has recognized throughout enforcement of its rules that because it may be difficult at times to distinguish between announcements that promote and those that merely identify, it only requires that licensees make reasonable good faith judgments to determine into which category underwriting announcements may fall. (24) This policy would seem to favor licensees by giving them much-needed flexibility in allowing them to accept or reject certain underwriting acknowledgments without being second-guessed by the federal government.

2. INCONSISTENCY IN IDENTIFYING QUALITATIVE OR COMPARATIVE DESCRIPTIONS

   Despite this flexibility, however, many noncommercial educational licensees find it difficult to apply the FCC's four categories of prohibited expression, as FCC enforcement has been less than a model of clarity. While the prohibition against providing price information, (25) calls to action, (26) or inducements to buy, sell, rent, or...