With FCC Watchful, NCEs Say They Don't Need Clearer Underwriting Rules

NCE industry officials in public TV and radio aren’t interested in asking for more specific regulations. Such tighter guidelines could mean stricter limits on what stations can do, said Rhode Island PBS President David Piccerelli. “The threat of a violation is enough for us to adhere to the guidelines.”

Rather than specific guidelines, the understanding of what constitutes acceptable NCE underwriting spots has been pieced together though precedent from FCC enforcement orders and infrequent policy guidance, said lawyers with NCE clients. The system is “incredibly ornate” and complicated but preferable to the FCC digging into “the gory details” of what's allowed in a spot, said broadcast attorney Michael Couzens. He's working for the National Federation of Community Broadcasters on the latest edition of a legal handbook for local low-power FM stations, including information on underwriting rules.

“If the FCC drew some real hard lines, we probably wouldn’t like where the lines were drawn,” said Todd Gray of Gray Miller. The FCC and the University of Arkansas didn’t comment Friday.

Asking for specifics in the underwriting rules has led to more restrictions in the past, a broadcast attorney said. In 2014, Maricopa Community College District, Arizona, sought waiver of FCC underwriting rules to be allowed to run commercials advertising interest rates at local businesses and use qualitative language such as “'certified,’ ‘accredited,’ ‘award-winning,’ ‘experienced,’ or ‘long-established.’” Denial of that waiver set a precedent that those terms aren’t allowed, increasing the limits for NCE broadcasters rather than loosening them as Maricopa intended (see 1405160041).

Language in the new Arkansas order is consistent with past commission guidance on the topic, said Gray. That includes the order’s advice that the longer spots are, the more likely they are to cross the FCC’s lines that limit such underwriting spots to merely identifying a sponsor. “They’ve said that several times,” Gray said.

The University of Arkansas matter features a large fine relatively for an underwriting violation but is consistent with past FCC decisions in that area, which established a rough penalty precedent of $4,000 per violation, said industry attorneys. They said the violations in this case were particularly egregious. The complaint that led to the consent decree -- from two commercial broadcasters -- includes transcripts of numerous spots that have specific product advertisements for cars and lawn mowers and many promotional statements. “Nobody can buy cars at the auction better than Bud Gentry. Nobody. I don’t care where you came from or what you do,” said a spot for Gentry Chevrolet. That promotion “even included a personalized testimonial in support of the business by the announcer,” the complaint said.

"If nothing else, this Order shows that the FCC can be very concerned when presented with a situation that crosses the line," blogged Wilkinson Barker's David Oxenford. He advised that underwriting spots should be "kind of boring." They should "provide a minimal amount of information to identify who an underwriter is and what they do, but they should not promote that underwriter’s business."

That violations are infrequent shows current FCC rules work, said Piccerelli. It’s not uncommon for staff at Rhode Island PBS to work with sponsors and with attorneys to make sure the language in a given spot is compliant, he said. “That’s what differentiates us from commercial stations.”