FCC Provides Clarification
of Policy
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The FCC has issued additional
guidance regarding the obligation that all broadcast advertising sales
contracts contain a provision that prohibits discrimination on the basis of
race or ethnicity, as first adopted in 2008. This clarification –
issued on March 22 – comes as the filing cycle for renewal applications, set
to begin on June 1, approaches. The renewal application will require
each licensee to certify that its station advertising agreements complied
with the FCC’s requirements as of March 14, 2011. The FCC’s Enforcement
Bureau stated in its March 22 advisory that a licensee which cannot in
good faith make an affirmative certification must answer “no,” and attach an
exhibit explaining why the certification cannot be provided and why the
renewal application should be granted despite the licensee’s
noncompliance. The Bureau underscored that the licensee “must have … a
reasonable basis for believing that factual information provided to the
Commission is truthful and accurate.” The only example provided by the
Bureau established that, if a station uses a rep firm or other “third party
to arrange advertising sales,” the licensee remains responsible for making
certain that the agreement used by the rep firm “contains the
non-discrimination clause and does not discriminate on the basis of race or
ethnicity.” The Bureau advisory cautioned that the FCC’s rules provide
that “a broadcaster that learns of a violation of a nondiscrimination clause
while its renewal application is pending should update its … application so that
it continues to be accurate,” and ended with the ominous reminder that “[a]
misrepresentation in an application filed with the Commission could result in
the initiation of license revocation proceedings.” In our memo of March 17,
2011, we recommended language to be added to written sales contracts,
standard terms and conditions attachments, and similar sales materials that
would meet the FCC’s requirements, and the specific acknowledgment from the
advertiser that its purchase of advertising is not intended to discriminate
on the basis of race or ethnicity would provide a reasonable basis for the
mandatory renewal certification. If you are using written sales
agreements, the recommended provision should be employed. If a rep firm
or other third parties acting on behalf of the station use written sales
agreements, you should also review those agreements carefully to confirm that
a provision describing your policy is included, and require that the
provision remain in all subsequent agreements used by the station’s
representatives. As many stations no
longer rely exclusively, if at all, on written contracts, compliance with a
requirement that a provision be included “in station advertising contracts”
may no longer be as simple as had previously been the case. With these
changes in industry practices in mind, there are techniques that can assist a
station in making a good faith certification of compliance in the renewal
application. These alternatives include as many of the following as can
be achieved: ·
Include a short,
direct statement of the station’s non-discrimination policy in the signature
line of all emails or other written communications – including
availabilities, rate cards, offers, confirmations, and correspondence – with
all advertisers and agencies. For these purposes, we recommend the
following: “Non-discrimination: In the performance of all
[station calls or licensee name] advertising agreements, [licensee name]
requires that each party not discriminate on the basis of race or ethnicity.” ·
Include this
statement or the full provision on all invoices sent to clients and agencies. ·
Place this statement
on your station’s website, especially in a prominent place on the contacts
page for the sales department, and in the political disclosure statement,
provided in response to all political inquiries from candidates, their
campaign committees, and other political time buyers. ·
Include the
station’s non-discrimination provision in a letter sent to all current
advertisers, along with a copy of the station’s advertising agreement.
A similar packet could be sent to new advertising clients, welcoming them to
the station. We expect that, as the
renewal filing cycle proceeds, the FCC may provide additional clarification
concerning the non-discrimination obligation and a station’s continuing
adherence to the policy, particularly as to the substance of any explanations
offered in applications where an affirmative certification is not made.
If you have any questions about how to comply with the Commission’s policy
and the renewal certification requirements, please contact any attorney in
our office. April
11, 2011 |
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This memorandum is intended only as a general discussion of these issues and should not be regarded as legal advice. We would be pleased to provide additional details or advice about specific situations if desired. Copyright © 2011, Lerman Senter PLLC 2000 K Street NW,
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