FCC Fines Two TV Stations $4000 For Airing Video News Releases Without Sponsorship Identification, Even Though the Stations Were Not Paid for the Broadcast

by Davis Wright Tremaine LLP
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The FCC has issued two Notices of Apparent Liability, each proposing fines of $4000 to TV station licensees, both for airing video news releases ("VNR") in news or information programs without sponsorship identifications. In both cases, the station received the VNRs for free, but was paid nothing for including them in their programming. The station had no indication that any other party supplying the VNRs were paid for providing them to the station. Nevertheless, relying on some very old statements of policy contained in an FCC Public Notice from 1975, the FCC concluded that the provision of the VNRs in and of themselves, constituted valuable consideration to the station, and the fact that they highlighted the commercial products of the companies that produced them "to an extent disproportionate to the subject matter of the film", mandated a sponsorship identification.

Both cases rely on an FCC Public Notice, first issued in 1963 and updated in 1975 (which I have been unable to locate on the FCC's website), which sets out examples of how to comply with the sponsorship identification rules. These two old Public Notices were cited, but not reproduced, in a 2005 Public Notice, warning broadcasters to be careful with their use of VNRs. The specific example cited by the FCC was one set out in these notices dealing with a film on scenic roadtrips provided by a bus company. In the examples provided, the FCC stated that if the video did not show the bus company's name, or the bus company's name was shown only "fleetingly" in pictured of the highway in a manner reasonably related to the program, there would be no sponsorship identification requirement. In cases where the bus company's name was clearly shown, "disproportionate to the subject matter of the film", then sponsorship identification would be required "as the broadcaster has impliedly agreed to broadcast an identification beyond that reasonably related to the subject matter of the film." Based on these examples, the FCC levied the fines in the cases just released. An examination of the facts of these cases is important to understand these fines and how far the FCC ruling in these cases extends.

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