Five Underwriting Controversies

Last Updated on July 23, 2008 by Erick Lauber

In a presentation to the 1999 National Public Radio Conference in Washington, DC, Kenneth M. Scheibel, Jr., Senior Attorney Advisor in the Mass Media Bureau’s Enforcement Division, answered some common questions regarding underwriting “do’s” and “don’ts.” Below is a brief summary of his replies. The full text of the presentation is available online.

1. How should a station respond when an underwriter wants to include the name of its sponsor in the underwriting announcement as well?

In other words, is saying “this programming is brought to you by Acme Theater, presenting ‘Romeo and Juliet’? Production underwritten by Star Computing” the same as saying “this program is brought to you by Acme Western Wear, offering Wrangler, Lee and Dakota jeans”?

The Acme Western Wear example would be appropriate to air, as it only identifies a product or service provided by the sponsor. In the case of the Acme Theater sponsorship, it is not appropriate to mention another entity (Star Computing) unless that entity is also a sponsor of the program. If Star Computing provided financial support for Acme Theater but not the educational/public broadcaster, then they should not be mentioned in the underwriting spot.

2. Can you legally turn away an underwriter?

Under Section 3(10) of the Communications Act, broadcasters are not considered common carriers, and, therefore, need not provide universal access. It is the up to the discretion of the broadcasters which programming to accept or decline.

3. Is there specific language that must be included in underwriting acknowledgements?

Section 73.1212 of the Communications Act requires a nonprofit station must indicate the person or entity that provided the support for a program. The announcement must be made at the time the program is aired. Stations are required to “exercise full diligence” to fully and fairly disclose the true identity of the person, corporation, or association providing support for the programming. The Commission and the courts have interpreted this to mean that stations may rely on “plausible assurances” that the person paying for the time is the true sponsor unless otherwise provided with credible, irrefutable evidence to the contrary.

4. Should non-profits and for-profits be treated the same in terms of the wording of announcements?

For-profit organizations who provide support for educational and public broadcasters may receive on-air acknowledgement of their contribution. This acknowledgement should be for identification purposes only and not promote the contributor’s products or services.

These restrictions do not apply to non-profit supporters. Educational and public broadcasters may air announcements that promote their own activities or those of other non-profit organizations.

5. What’s the definitive answer on whether a financial institution can list credit card or CD or mortgage loan interest rates? Underwriting may not contain reference to specific price information, interest or loan rates, available discounts, or products or services offered at “cost”or for free.