End Discriminatory Regs Against Broadcast

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.