End Discriminatory Regs Against Broadcast

The FCC's tentative $13.4 million fine against Sinclair for allegedly airing news programming that was paid for by a sponsor is just one more example of antiquated rules targeting broadcasting alone. The FCC needs to rid itself of discriminatory rules and the sponsor-disclosure regime would be a fine place to start.

Just before Christmas, a Grinchy FCC notified Sinclair that it is fining the station group $13.4 million for repeatedly failing to tell its viewers that news segments and a half-hour show touting the Huntsman Cancer Foundation were “paid-for-broadcast programming.”

That’s a long-standing no-no.

“Our rules require a broadcaster airing a paid program to include an announcement stating that the program has been paid to air and identifying the program sponsor,” the agency said in its 61-page Notice of Apparent Liability, which is sort of an indictment. Sinclair will get one more chance to explain its way out of it before the fine becomes official.

It could have been worse. Democratic Commissioner Jessica Rosenworcel and Mignon Clyburn voted against the levying of the fine on grounds that it wasn’t large enough, given the large number of instances (1,723 on 77 stations) and Sinclair’s extensive rap sheet.

“Simply put, the ‘punishment does not fit the crime’ against a company that grossed more than $2.7 billion in revenue last year,” said Clyburn.

Chairman Ajit Pai said his colleagues wanted to up the fine to $82 million.


But this particular case is not what I want to talk about today.

It’s the underlying law and implementing rules. Why are broadcasters still subject to them? Of all the media, why do they still labor under the threat of federal fines for not disclosing what content is paid for and who is doing the paying?

What we are talking about mostly here is “native advertising,” content tucked into a newspaper, magazine, broadcast, cable channel or digital medium that kind of looks like the other content, but is actually a paid advertisement.

Native advertising has been around forever, although it has gone by different names like advertorial, sponsored content, promoted content and infomercial.

The name changes reflect traditional media’s ambivalence about it. Publishers and their sales people love native advertising and they are always trying to blur the line between it and true editorial content, recognizing that advertisers want to get as close to the latter as they possibly can.

Most editors tend to hate it and would banish it or, failing that, would call it exactly what it is: advertising.

And native advertising is everywhere. The New York Times has a unit called T Brand Studio that, in its own words, takes “a journalistic approach to crafting brand stories.”

Here’s a piece it did for Hennessy Cognac that borrows the distiller’s tagline: “Harmony. Mastered from Chaos.” Can you find the two lines saying it was “PAID FOR AND POSTED” by Hennessey? Sure, but only if you are looking for them.

This is not to say native advertising is inherently wrong or worthless. On the contrary, if done right, if can be as entertaining and informative as any non-paid content.

TVNewsCheck has a native advertising service that we are proud of. We call it Partner Perspectives and we label it “Sponsored Content.” Our publisher, Kathy Haley, who in a previous professional incarnation wrote an advertorial section on the upfront season for the New York Times and others, works hard to make sure our native advertising is meaningful to both client and reader.

But here’s the thing. If the New York Times or TVNewsCheck decides to throw its ethics to the wind and drop the disclosures on its native ads, it may face the scorn of its journalistic peers, but it will not have to worry about being fined millions of dollars by a federal agency.

The same goes for every other print and digital medium. Google’s entire business is based on selling the space on its first search page. It puts an “Ad” bug by the paid listings at the top of the page, but it would not be penalized if it didn’t.

According to communications attorney Jack Goodman, the FCC’s current sponsor-disclosure rules have their roots in broadcasting’s quiz show and payola scandals of the 1950s.

Concerned about the abuses, Congress in 1960 enacted the FCC to police deceptive programming, and included increased sponsorship disclosure requirements.

Maybe that was OK when broadcasting was blowing past newspaper as the nation’s most important medium, but it’s not OK today when broadcasting is in an existential fight for survival in a mediaverse dominated by aggressive digital giants.

The disclosure regulations, I should note, can be stretched beyond native advertising. In 2006, the FCC used them to go after stations for airing video press releases or even parts of them without fully disclosing their source.

It was not among broadcasting’s finest hours, but, again, the FCC targeted broadcasting, while ignoring newspapers, websites and other digital media that are awash with press releases that are redistributed virtually untouched by editors or producers.

So I say, get rid of the disclosure requirement even if it takes an act of Congress. Let broadcasters battle in the TV marketplace without the extra burden of regulations for sins committed nearly 70 years ago.

No doubt, some broadcasters will abuse the freedom. They will dress up commercials as news or public affairs as Sinclair is alleged to have done, but in doing so they will risk their most valuable asset — credibility.

Viewers aren’t so dumb. They will eventually spot the fake news (excuse the expression) and move on to other outlets that take their news seriously and don’t sell it to the highest bidder.

Chairman Pai is reviewing all the media rules with an eye toward eliminating those that no longer make any sense. He should also go after those that are discriminatory, putting broadcasting’s sponsor-disclosure rules at the top of the list.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or here. You can read earlier columns here.

Comments (29)

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Angie McClimon says:

January 12, 2018 at 3:24 pm

The FCC is doing the right thing by insisting that paid ‘news’ stories be somehow identified as such. Like paid programs are typically started with a disclaimer that it is paid, as should something produced by an outside entity to be aired as a ‘news’ story. Especially with the likes of Sinclair, who has been circumventing broadcast rules for years.

    Julien Devereux says:

    January 12, 2018 at 3:35 pm

    Absolutely correct.

    Peter Grewar says:

    January 12, 2018 at 7:24 pm

    Yeah, I agree. Lowering the regulatory standards for broadcasting to match those of, say, Facebook hardly seems like a good thing.

alicia farmer says:

January 12, 2018 at 3:51 pm

Fair enough Harry. (1) Remove broadcasters’ FCC licenses. (2) Charge broadcasters 8% of gross annual revenue for the right to transmit on the public airwaves. (3) Remove all special treatment regarding cable/satellite “must carry and retrans.”

    Linda Stewart says:

    January 14, 2018 at 3:19 pm

    1) broadcasters could police airwaves privately; 2) station owners paid plenty for most of their frequencies; few got them for free; 3) retrans could be privatized and broadcasters would get the same amount of money. I have no love of must carry.

    Dan Levitt says:

    January 16, 2018 at 1:24 pm

    Broadcasters POLICE THEMSELVES??? haaaaaaaa, hysterical

    Veronica Serrano Padilla says:

    January 16, 2018 at 7:57 pm

    Of course, Mr. Jessell, you know your point 2) is patently false. “Broadcasters” never have paid a dime for the spectrum they use. If it were theirs they wouldn’t need a LICENSE to use those frequencies and that LICENSE would not have be renewed periodically. They may have paid plenty to have that LICENSE of use transferred to them or to get that LICENSE, but the airwaves belong to the public. As for your thoughts on point 3), not sure that squares with past comments about such saving the “broadcasting” industry.

Dan Levitt says:

January 12, 2018 at 4:53 pm

gee Harry, you didn’t mention the people the FCC protect ant all… the readers and viewers! sure, look at stories poorly flagged sponsored content on the web after it was not identified as such on the broadcast OR mobile…. exactly why viewers have ad-blocking and DVR’s to record shows without commercials.

Dan Levitt says:

January 12, 2018 at 5:35 pm

Harry Jessell – is this particular article “End Discriminatory Regs Against Broadcast” – PAID FOR, in any way, shape or form?

Dan Levitt says:

January 12, 2018 at 5:42 pm

wait for ad sales to jump at the abolishing of Payola. soon paid ads won’t even have to be logged into the abyss of programmatic as revenue… soon, tv stations won’t have to pay state and federal taxes on advertising disguised as news because nobody will know whats paid for or not….

    Brian Bussey says:

    January 16, 2018 at 12:47 pm

    what on earth are you talking about ?

    Dan Levitt says:

    January 16, 2018 at 12:58 pm

    if you paid attention, Harry’s endorsement of Native Advertising is the same as endorsing Payola – because my station group NEVER identifies Natives Ads as such, they’ve been doing it for years – but nobody complains because the stations will lose their licenses and everybody gets fired or you get fired by just complaining. so stop playing stupid that you don’t know Payola exists – it’s in Twitter, FB and Broadcast and you know it. The advantage of programmatic is that you can mix and match when you want an story without Sponsor ID can run ON THE BOOKS and OFF the BOOKs. One native ad campaign for Acme Dental can run as Sponsored in May, then run again in June without sponsor ID, I’ve seen it done so stop acting stupid – it goes on in NYC and it goes on in oshkosh

Dan Levitt says:

January 12, 2018 at 6:11 pm

when Sinclair prints out this article and uses it as propoganda to reduce their FCC fine, I hope they give credit ti Harry Jessell the Sinclair Broadcasting Spokesperson. hopefully the day will come when Payola is lifted from FCC guidelines so other Political Advertising for politicians can lead and fill the news and nobody will know that it’s Paid For at all. Can’t wait for the extreme coverage of one candidate over another without understanding the coverage is Paid For

Dan Levitt says:

January 12, 2018 at 6:16 pm

then again, this article of propaganda could be Paid For by Ajit Pai in order to throw off suspicion of being in Sinclairs pocket…

Dan Levitt says:

January 12, 2018 at 8:16 pm

i want a job in Ad Sales at TVnewscheck when the FCC does away with Payola – this way I can sell a $5,000 Ad that looks like News for $3,000 so the client saves $2,000 and I pocket the $3,000 and TVnewscheck never gets a dime because they have no idea themselves that there was ever an Ad placed because it looks like all the other news articles. I could sell half my Ads and put it right into my own pocket, just like the Rep firms do now

    John Murray says:

    January 15, 2018 at 7:34 am

    Hey, whatever it takes to make you gainfully employed…. because you clearly have an inordinate amount of free time as it is….

    Dan Levitt says:

    January 15, 2018 at 8:51 am

    seems like i hit a nerve with a cretin. How many replies I post have nothing to do with the time spent on them. I often reply with separate ideas in order they are not lost in one large individual post. Obviously my strategy works being that you were prompted to make mention of it

    Veronica Serrano Padilla says:

    January 15, 2018 at 9:24 pm

    Yep, you’re correct on one thing, you don’s spend a lot of time thinking about your posts (hence, they rarely mean anything.)

    Dan Levitt says:

    January 16, 2018 at 9:38 am

    Ridgeline at least my comments aren’t juvenile. My posts do mean a lot, I don’t spend a lot of time – because I know my TV Group has done thousands of stories disguised as news without sponsor ID, So for Harryh to suggest that Sinclair MAY be guilty of ONE case is Preposterous. My company would be bankrupt if it applied even just the slap-on-the-wrist the company would have Billions in fines on thousands of stories.

    Brian Bussey says:

    January 16, 2018 at 12:48 pm

    so you work for a Fox O&O.

    Dan Levitt says:

    January 16, 2018 at 1:02 pm

    none of your biz who I work for, but FNC does it as well as CBS Network and Local. I f you see a product, brand or biz mentioned on TV News today – you can guarantee it’s paid for without any acknowledgement it’s paid for. gimme a break, I did it for years before I realized what was going on

Dan Levitt says:

January 12, 2018 at 9:42 pm

if Sinclair was smart – they’d pay for articles LIKE THIS Under-The-Table so they appear as independent opinion

Don Thompson says:

January 14, 2018 at 11:25 am

Interesting column, Harry.

John Murray says:

January 15, 2018 at 7:41 am

How quaint these FCC rules are. Broadcasters contort themselves to avoid quoting Trump’s alleged “S-hole” comment at any hour of the day while cable news outlets do so freely throughout the day. And the PTC is probably cranking up another bogus “letter-writing” campaign to pressure the FCC to fine NBC for Sam Rockwell’s “SNL” F-bomb. Oh, the Humainty!

Ree Thelen says:

January 16, 2018 at 12:47 am

It’s interesting that print media are careful to identify advertising while broadcasters need a rule to prevent them from misleading their viewers (or listeners, in the case of payola).

    Dan Levitt says:

    January 16, 2018 at 9:41 am

    just because print media ID’s native and sponsored – doesn’t mean it does it to ALL native and sponsored….

Susan Taylor says:

January 16, 2018 at 11:00 am

Broadcasters use the public airwaves. Unlike other media, the airwaves broadcasters use belong to the people. They need to be protected, and the government has every right to regulate broadcasters in exchange for letting them use those airwaves.

Throughout the decades, the government has been more and more lenient with broadcasters, letting them own more and more stations, and in closer proximity to each other, and licencing them for a longer time.

If broadcasters don’t like it, then they should give up using the public’s airwaves that don’t belong to them and get into one of those other businesses you mentioned. Then they won’t have to worry about public service.

Dan Levitt says:

January 16, 2018 at 1:08 pm

if 4 of the major 6 Advertising companies are under investigation for BILLIONS in KICKBACKS and BID-RIGGING of course TV Stations at the local level are airing Paid Ads as news Content, are you kidding me? If FB & Google, Yahoo etc. had 20% of their Ads clicked on by BOTS – of course Local News Stations are involved with PAYOLA, Harry needs to take his head out of the sand or stop promoting Native Ads and Sinclair for his own personal reasons…

Dan Levitt says:

January 17, 2018 at 9:20 am

this all Begs the Big Question – if Harry Jessell is so sure Broadcasters are following FCC Policies such as Sponsor ID – THEN WHY GET RID OF THEM…….

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