[Federal Register Volume 70, Number 90 (Wednesday, May 11, 2005)]
[Notices]
[Pages 24791-24794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9105]


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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 05-171; FCC 05-84]


Request for Comments on the Use of Video News Releases by 
Broadcast Licensees and Cable Operators

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document, reminds broadcast licensees, cable operators 
and others of sponsorship identification requirements applicable to 
video news releases and solicits public comment on the use of video 
news releases by broadcast licensees and cable operators.

DATES: Comments may be filed on or before June 22, 2005, and reply 
comments may be filed on or before July 22, 2005.

ADDRESSES: You may submit comments, identified by docket number, by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Hope Cooper Media Bureau (202) 418-
1440, TTY (202) 418-7172, or e-mail at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
document in MB Docket No. 05-171, FCC 05-84, released April 13, 2005. 
The complete text of the document is available for inspection and 
copying during normal business hours in the FCC Reference Center, 445 
12th Street, SW., Washington, DC 20554, and may also be purchased from 
the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th 
Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact 
BCPI, Inc. at their Web site http://www.bcpi.com or call 1-800-378-
3160.

Synopsis

    1. The Commission has recently received a large number of requests 
that it consider whether the use of ``video news releases'' or 
``VNRs,'' by broadcast licensees, cable operators, and others complies 
with the Commission's sponsorship identification rules. (See, e.g., 
Letter from Josh Silver, Executive Director, Free Press, et al., to 
Honorable Kevin Martin, Chairman, FCC et al. (March 21, 2005) (stating 
that the authors ``are writing you today on behalf of nearly 40,000 
Americans who have signed a petition urging the Federal Communications 
Commission to investigate all broadcasters who distribute government-
sponsored news reports without properly identifying their source''); 
Letter from Honorable John F. Kerry, U.S. Senator, to Honorable Michael 
Powell, Chairman, FCC (March 15, 2005); Letter from Honorable Daniel 
Inouye, U.S. Senator, to Honorable Michael K. Powell, Chairman (March 
14, 2005). Also, the Commission has received thousands of e-mails about 
this practice.) VNRs are essentially prepackaged news stories, that may 
use actors to play reporters and include suggested scripts to introduce 
the stories. (See, e.g., Joe Mandese, The Art of Manufactured News, 
Broadcasting and Cable, March 28, 2005, at 24; David Barstow and Robin 
Stein, The Message Machine: How the Government Makes News; Under Bush, 
a New Age of Prepackaged News, New York Times, March 13, 2005, at A1.) 
These practices allow such externally prepackaged news stories to be 
aired, without alteration, as broadcast or cable news. Some of the 
parties contacting the Commission have suggested that broadcast 
licensees and cable operators may have aired VNRs with news stories 
containing material paid for, prepared and/or provided to them by or on 
behalf of commercial, governmental and other entities without

[[Page 24792]]

disclosing, at the time of the airing, the source of and the 
circumstances surrounding their acquisition of such material.
    2. With this Public Notice (PN), the Commission reminds broadcast 
licensees and cable operators that air VNRs, as well as all entities 
and individuals involved in the production and provision of the 
material at issue here, of their respective disclosure responsibilities 
under the Commission's sponsorship identification rules. These rules 
are grounded in the principle that listeners and viewers are entitled 
to know who seeks to persuade them with the programming offered over 
broadcast stations and cable systems. (See, e.g, Applicability of 
Sponsorship Identification Rules, PN, 28 FR 4732 (May 6, 1963); 
Sponsorship Identification Rules, Applicability, 40 FR 41936 (September 
3, 1975).) For the reasons noted in this PN, and as provided for in the 
statutory provisions and in the Commission's rules, whenever broadcast 
stations and cable operators air VNRs, licensees and operators 
generally must clearly disclose to members of their audiences the 
nature, source and sponsorship of the material that they are viewing. 
We will take appropriate enforcement action against entities that do 
not comply with these rules. This PN is confined to the disclosure 
obligations required under section 317 and our rules thereunder, and 
does not address the recent controversy over when or whether the 
government is permitted to sponsor VNRs, which is an issue beyond the 
Commission's jurisdiction.

The Sponsorship Identification Rules

    3. The sponsorship identification rules, which are contained in 
sections 317 and 507 of the Communications Act of 1934, as amended (the 
``Act'') (47 U.S.C. 317, 508), and sections 73.1212 and 76.1615 of the 
Commission's rules (47 CFR 73.1212, 76.1615), generally require that, 
when payment has been received or promised to a broadcast licensee or 
cable operator for the airing of program material, at the time of the 
airing, the station or cable system must disclose that fact and 
identify who paid or promised to provide the consideration.
    4. Specifically, section 317(a)(1) of the Act provides, in 
pertinent part:
    All matter broadcast by any radio station (The Commission has ruled 
that the sponsorship identification requirements also apply to 
origination programming by cable operators. Amendment of the 
Commission's Sponsorship Identification Rules (Sections 73.119, 73.289, 
73.654, 73.789 and 76.221), Report and Order (R&O), 40 FR 18395 (April 
28, 1975), paragraph 37 (``We see no reason why the rules for such 
cablecasting should be different from those for broadcasting, for the 
consideration of keeping the public informed about those who try to 
persuade it would appear to be the same in both cases.'') Under our 
rules, origination cablecasting is defined as ``programming (exclusive 
of broadcast signals) carried on a cable television system over one or 
more channels and subject to the exclusive control of the cable 
operator.'' 47 CFR 76.5(p). The broadcast and cable rules are 
substantially identical with the single exception that paragraph (c) of 
the broadcast rule, which pertains to reports under section 508 of the 
Act (which applies only to broadcasters), is not applicable to cable 
television. See In the Matter of Amendment of the Commission's 
Sponsorship Identification Rules, R&O, 40 FR 18395 (April 28, 1975).) 
for which any money, service, or other valuable consideration is 
directly or indirectly paid, or promised to or charged or accepted by, 
the station so broadcasting, from any person, shall at the time the 
same is so broadcast, be announced as paid for or furnished, as the 
case may be, by such person. * * *
    To provide parties with the information necessary to air these 
disclosures, section 507(a) requires that each station employee who has 
accepted or agreed to accept consideration for the airing of program 
matter, or any person who has paid or has agreed to so pay any such 
employee, must disclose that fact to the station prior to the airing of 
the matter. Similarly, section 507(b) imposes such a duty of disclosure 
upon any person involved in the production or preparation of broadcast 
matter who receives or agrees to receive, or provides or promises to 
provide, such consideration. The disclosure must be made to each 
payee's employer, the person for whom the material is being produced, 
or the licensee. Section 507(c) requires this disclosure by anyone who 
supplies broadcast matter to the person to whom he or she provides the 
matter. In this way, the information must ultimately be provided up the 
chain of production and distribution, before the time of broadcast, to 
the licensee so that it can timely air the required disclosure.
    5. Moreover, section 317(b) of the Act requires that any broadcast 
station that has received such information pursuant to section 507 must 
air the section 317 announcement, as if the consideration was paid to 
the station for airing the broadcast matter, even if the station itself 
received no such consideration. (See, e.g., Letter to Mr. Earl 
Glickman, President, General Media Associates, Inc., 3 FCC 2d 326 
(1966); KMAP, Inc., Memorandum Opinion and Order, 44 FCC 2d 971 
(1974).) Section 317(c) requires each licensee to ``exercise reasonable 
diligence to obtain from its employees, and from other persons with 
whom it deals directly in connection with any program or program matter 
for broadcast, information to enable such licensee to make the 
announcement required by this section.''
    6. Based upon these requirements of section 317 of the Act, the 
Commission's rules require broadcasters (section 73.1212) and cable 
operators (section 76.1615), where appropriate, to inform their 
audience, at the time of airing: (1) That such matter is sponsored, 
paid for or furnished, either in whole or in part; and (2) by whom or 
on whose behalf such consideration was supplied. The announcement must 
fully and fairly disclose the true identity of the person or persons, 
or corporation, committee, association or other incorporated group, or 
other entity by whom or on whose behalf such payment is made or 
promised, or services or other valuable consideration is received, or 
by whom the material or services received by the licensee or operator 
are furnished. Where an agent or other person or entity contracts or 
otherwise makes arrangements with a station or cable system on behalf 
of another, and that fact is known or, by the exercise of reasonable 
diligence could be known to the station or system, the announcement 
should disclose the identity of the person or persons or entity on 
whose behalf the agent is acting, rather than the agent. (47 CFR 
73.1212(e), 76.1615(d).)
    7. In situations in which a broadcast licensee has not directly 
received or been promised consideration, has not received any section 
507 report that material has been paid for from its employees or others 
that must make such reports pursuant to that section of the Act, and, 
acting with the requisite diligence, has no information concerning the 
making of such promise or payment, section 317(a)(1) of the Act 
provides generally that no sponsorship identification is necessary with 
regard to material that is furnished to the licensee ``without charge 
or at a nominal charge.''

Political and Controversial Issue Programming

    8. The sponsorship identification rules impose upon broadcast 
licensees and cable operators a greater obligation of disclosure in 
connection with

[[Page 24793]]

political material and program matter dealing with controversial 
issues. The Commission has noted that, particularly in the case of such 
programming, audience members are ``entitled to know when the program 
ends and the advertisement begins.'' (Richard Kielbowicz and Linda 
Lawson, ``Unmasking Hidden Commercials in Broadcasting: Origins of the 
Sponsorship Identification Regulations, 1927-1963,'' Fed. Comm. L.J. 
329 at 344 n. 80 (2004) citing FCC, Public Service Responsibility of 
Broadcast Licensees 47 (1946).) Congress has acknowledged the danger 
that groups advocating ideas or promoting candidates, rather than 
consumer goods, might be particularly inclined to attempt to mask their 
sponsorship in order to increase the apparent credibility of their 
messages. (56 Fed. Comm. L.J. at 338.) Thus, deviating from the general 
rule contained in section 317(a)(1) that no sponsorship identification 
announcement is necessary if material is provided to a station free or 
at a nominal charge, section 317(a)(2) of the Act enables the 
Commission to require such an announcement regarding material so 
provided, if the programming involves political material or the 
discussion of a controversial issue.
    9. Consistent with this statutory provision, both the broadcast 
rule (section 73.1212(d)) and the cable rule (section 76.1615(c)) 
expressly require the airing of sponsorship disclosure in such 
situations. In contrast to the general disclosure requirement that a 
single announcement be made at the time of airing of the material, for 
political or controversial programming of more than five minutes' 
duration, the announcements must be made both at the beginning and the 
conclusion of the airing of the material. (47 CFR 73.1212(d), 
76.1615(c). For political or controversial programming that is five 
minutes or less in duration, only one announcement must be made, at the 
beginning or the end of the material. Id.) Moreover, if a corporation, 
committee, association or other unincorporated group or other entity is 
paying for or furnishing the broadcast matter, the station must 
include, for public inspection at the location of its public file (47 
CFR 73.3526, 73.3527), a list of the chief executive officers or 
members of the executive committee or of the board of directors of such 
corporation, committee, association, other unincorporated group or 
other entity. (47 CFR 73.1212(e).)

Request for Comments

    10. In addition to reminding broadcast licensees, cable operators, 
and others, pursuant to this PN, of their respective disclosure 
responsibilities under the Commission's sponsorship identification 
rules, the Commission seeks comment on VNRs and their use by broadcast 
licensees and cable operators. With this more detailed information, we 
will be better positioned to monitor this area and ensure that 
broadcast licensees, cable operators and others comply with our rules. 
To this end, we seek comment on the ways in which VNRs are used in 
programming, and on which practices are the most common. For example, 
we also seek comment on whether the entities producing or providing 
VNRs, including the government, pay broadcast licensees and cable 
operators to air VNRs, or whether the VNRs are provided free of charge, 
without separate payment or consideration. Are mechanisms in place to 
ensure that broadcast licensees and cable operators receive notice 
regarding the payment of consideration from all individuals and 
entities that are involved in the production and provision of VNRs? Are 
mechanisms in place to ensure that broadcast licensees and cable 
operators receive notice regarding the identity of entities providing 
programming involving political material or the discussion of 
controversial issues of public importance? Do broadcast licensees and 
cable operators receive VNRs as part of an overall news service, which 
may be provided under contract or on a subscription basis? If so, 
should this affect the applicability of our sponsorship identification 
rules? Finally, we seek comment on whether there are alternative or 
better means of ensuring proper disclosure concerning VNRs in addition 
to those prescribed by the existing rules. The Commission intends to 
issue a report, or initiate a more formal proceeding, as appropriate, 
on the comments received in response to these questions about VNRs 
forthwith. Although we seek comment on the use of VNRs in this Notice, 
we emphasize that the rules remain in effect and that we will continue 
to investigate complaints and enforce the rules during the pendency of 
this proceeding.

Conclusion

    11. In sum, the Commission acknowledges the critical role that 
broadcast licensees and cable operators play in providing information 
to the audiences that they serve. This information is an important 
component of a well-functioning democracy. Along with this role comes 
the responsibility that licensees and operators make the sponsorship 
announcements required by the foregoing rules and obtain the 
information from all pertinent individuals necessary for them to do so. 
We remind all such licensees and operators, as well as those involved 
in the production and provision of the material that they air, that 
they must strictly adhere to the foregoing requirements and to fully 
meet their responsibilities under them.
    12. The Commission will investigate any situation in which it 
appears that these requirements of the law may have been violated and 
will order administrative sanctions against its regulatees, including 
the imposition of monetary forfeitures and the initiation of license 
revocation proceedings, where such action is appropriate. In addition 
to these sanctions that the Commission may impose, we note that the 
criminal penalty for violation of the disclosure requirements of 
section 507 of the Act is a fine of up to $10,000, imprisonment of not 
more than a year, or both. (47 CFR 508(g).)

Procedural Matters

    13. Ex Parte Rules. There are no ex parte or disclosure 
requirements applicable to this proceeding pursuant to 47 CFR 
1.1204(b)(1).
    14. Comments Information. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using: (1) The 
Commission's Electronic Comment Filing System (ECFS), (2) the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(May 1, 1998).
    Electronic Filers: Comments may be filed electronically using the 
Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the 
Federal eRulemaking Portal: http://www.regulations.gov. Filers should 
follow the instructions provided on the Web site for submitting 
comments.
    In completing the transmittal screen, ECFS filers should include 
their full name, U.S. Postal Service mailing address, and the 
applicable docket number. Parties may also submit an electronic comment 
by Internet e-mail. To get filing instructions, filers should send an 
e-mail to [email protected], and include the following words in the body of 
the message, ``get form.'' A sample

[[Page 24794]]

form and directions will be sent in response.
    Paper Filers: Parties who choose to file by paper must file an 
original and four copies of each filing. Filings can be sent by hand or 
messenger delivery, by commercial overnight courier, or by first-class 
or overnight U.S. Postal Service mail (although we continue to 
experience delays in receiving U.S. Postal Service mail). All filings 
must be addressed to the Commission's Secretary, Office of the 
Secretary, Federal Communications Commission.
    The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
    Commercial overnight mail (other than U.S. Postal Service Express 
Mail and Priority Mail) must be sent to 9300 East Hampton Drive, 
Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, 
and Priority mail should be addressed to 445 12th Street, SW., 
Washington DC 20554.
    People with Disabilities: Contact the FCC to request materials in 
accessible formats (braille, large print, electronic files, audio 
format, etc.) by e-mail at [email protected] or call the Consumer & 
Governmental Affairs Bureau at 202-418-0531 (voice), 202-418-7365 
(TTY).

Federal Communications Commission.
Marlene H, Dortch,
Secretary.
[FR Doc. 05-9105 Filed 5-10-05; 8:45 am]
BILLING CODE 6712-01-P