Last week the Federal Communications Commission fined a radio broadcaster $44,000 for violating the Commission’s sponsorship identification rules. Even more of an attention getter than the amount of the fine is the way FCC determined the fine -- by fining the broadcaster for each violation. 

In response to an FCC inquiry, the broadcaster stated that between March 2009 and May 2009, it aired program matter on behalf of Workers Independent News (“WIN”) in exchange for consideration.   The program matter consisted of 45 ninety-second spots, 27 fifteen-second promotional announcements, 2 two-hour programs and 1 one-hour program.  The broadcaster claimed that the appropriate sponsorship identifications were made for 34 of the 45 ninety-second spots.  The broadcaster stated that these 11 spots referenced WIN and the narrator but did not specifically state that the program was sponsored, paid for or furnished by WIN.  The announcements were directed toward a state legislative issue impacting the local economy.

The broadcaster argued that it had satisfied the sponsorship identification requirements by 1) identifying the sponsor by name in each announcement and 2) including each announcement within the other commercial matter for WIN, not within the station’s news content.  The FCC rejected each argument.  The FCC reminded the broadcaster that the purpose of the sponsorship identification rule is to provide listeners and viewers with information concerning who is attempting to persuade them.  The FCC determined that the mere mention of WIN did not provide sufficient information to the listener.  The FCC determined that Section 73.1212(f) of the Commission’s Rules, which considers mentioning the sponsor’s corporate or trade name during commercial matters as acceptable sponsorship identification, did not apply in this instance.

The FCC similarly rejected the broadcaster’s argument that the announcements were included within other commercial matter and not within the station’s news programming.  The FCC concluded that because the 11 announcements focused on a state legislative issue impacting the local economy, it would not be apparent to the listeners that the announcements were indeed sponsored programming, even if commercial programming surrounded the announcements.

The FCC’s analysis and determination is not surprising, but the way the FCC arrived at the $44,000 fine is.  The FCC relied upon its forfeiture guidelines, which establish a base forfeiture amount of $4,000 for each sponsorship identification violation.  The FCC multiplied this amount by the 11 announcements to arrive at the $44,000 fine, thereby treating each announcement as a separate violation.  While the FCC has discretion here, the fine seems somewhat excessive given that the broadcaster complied with the sponsorship identification requirements for the program length material and for an overwhelming majority of the announcements.  The FCC should have taken this into consideration and imposed a lesser fine.  This could represent a shift in how the FCC determines forfeitures in the future.  Regardless, this decision should serve as a wake up for broadcasters of the importance of complying with the Commission’s rules.

The message from the Commission is clear and unmistakable.   The agency will fine broadcasters for each violation regardless of mitigating circumstances.  Substantial or good faith compliance will not be enough.  Broadcasters should review their procedures for broadcasting commercial matter both to determine compliance with the sponsorship identification rules and to make sure that no commercial matter slips through which inadvertently does not include the requisite sponsorship identification.