Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                | *  | MB Docket No. 08-90          |
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| and Embedded Advertising        | *) |                              |
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NOTICE OF INQUIRY AND

NOTICE OF PROPOSED RULE MAKING

**Adopted: June 13, 2008** **Released: June 26, 2008**

**Comment Date: (60 days after date of publication in the Federal
Register)**

**Reply Comment Date: (90 days after date of publication in the Federal
Register)**

By the Commission: Chairman Martin**,** Commissioners Copps and
Adelstein issuing separate statements.

# INTRODUCTION

1\. We solicit comment on the relationship between the Commission's
sponsorship identification rules and increasing industry reliance on
embedded advertising techniques.[^1] Due, in part, to recent
technological changes that allow consumers to more readily bypass
commercial content, content providers may be turning to more subtle and
sophisticated means of incorporating commercial messages into
traditional programming. As these techniques become increasingly
prevalent, it is important that the sponsorship identification rules
protect the public's right to know who is paying to air commercials or
other program matter on broadcast television and radio and cable.
Accordingly, we seek comment on current trends in embedded advertising
and potential changes to the current sponsorship identification
regulations with regard to embedded advertising.

# NOTICE OF INQUIRY

**A. BACKGROUND**

2\. The purpose of embedded advertising, such as product placement and
product integration,[^2] is to draw on a program's credibility in order
to promote a commercial product by weaving the product into the
program.[^3] The use of embedded advertising is escalating as
advertisers respond to a changing industry. Digital recording devices
(DVRs) allow consumers to skip traditional commercials, giving rise to
interest in other means of promoting products and services.[^4] In
addition, concerns have been raised that the availability of more
programming options may translate into lower audience retention during
commercial breaks.[^5] The industry appears to be turning increasingly
to embedded advertising techniques.[^6] PQ Media estimates that between
1999 and 2004, the amount of money spent on television product placement
increased an average of 21.5 percent per year.[^7] For 2005, PQ Media
estimates that the net value of the overall paid product placement
market in the United States increased 48.7 percent to \$1.50
billion.[^8] Product placements for primetime network programming,
according to Nielsen's Product Placement Services, decreased in
2006,[^9] but the first quarter of 2007 shows an increase in product
placements in Nielsen's Top 10 shows.[^10]

3\. These trends are also reflected in the new types of advertising
offered by certain networks and radio stations. The CW network, for
example, offers "content wraps," serialized stories within a group of
commercials that include product integration,[^11] and "cwikies," five
second advertising slots interspersed in regular programming.[^12] Fox
Sports Network claims a specialty in "product immersion," the practice
of "immersing products into programs ... so that they really feel like
it is part of the show."[^13] NBC has instituted a policy of bringing in
advertisers during programming development.[^14] In 2004, Universal
Television Networks sold to OMD Worldwide the exclusive rights to
product placement position in a miniseries.[^15] The goal of many of
these new marketing techniques is to integrate products and services
seamlessly into traditional programming.

4\. The Commission's sponsorship identification rules are based on
Sections 317 and 507 of the Communications Act of 1934, as amended
("Communications Act"), and are designed to protect the public's right
to know the identity of the sponsor when consideration has been provided
in exchange for airing programming.[^16] Section 317 generally requires
broadcast licensees to make sponsorship identification announcements in
any programming for which consideration has been received.[^17] Section
317(c) requires broadcasters to "exercise reasonable diligence" in
obtaining sponsorship information from any person with whom the licensee
"deals directly."[^18] Section 507 of the Communications Act establishes
a reporting scheme designed to ensure that broadcast licensees receive
notice of consideration that may have been provided or promised in
exchange for the inclusion of matter in a program regardless of where in
the production chain the exchange takes place.[^19]

5\. Sections 73.1212[^20] and 76.1615[^21] of the Commission's rules
closely track the language of Section 317 of the Communications
Act.[^22] The rules apply regardless of whether the program is primarily
commercial or noncommercial[^23] and regardless of the duration of the
programming.[^24] The rules do not require sponsorship identification,
however, when both the identity of the sponsor and the fact of
sponsorship of a commercial product or service is obvious.[^25] Thus, a
sponsorship announcement would not be required when there is a clear
connection between an obviously commercial product and sponsor.[^26]
Furthermore, with the exception of sponsored political advertising and
certain issue advertising,[^27] the Commission only requires that the
announcement occur once during the programming and remain on the screen
long enough to be read or heard by an average viewer.[^28] Other
decisions are left to the "reasonable, good faith judgment" of the
licensee.[^29] The Commission has issued numerous public notices over
the years reminding industry participants of their sponsorship
identification obligations.[^30] In the past, the Commission has
specifically reminded the industry that such obligations extend to
"hidden" commercials embedded in interview programs.[^31]

6\. Providing "special safeguards" against the effects of
overcommercialization on children, the Children's Television Act imposes
time limitations on the amount of commercial matter in children's
programming.[^32] The Commission also has several longstanding policies
that are designed to protect children from confusion that may result
from the intermixture of program and commercial material in children's
television programming.[^33] The Commission requires broadcasters to use
separations or "bumpers" between programming and commercials during
children's programming to help children distinguish between
advertisements and program content.[^34] The Commission also considers
any children's programming associated with a product, in which
commercials for that product are aired, to be a "program-length
commercial."[^35] Such program length commercials may exceed the
Commission's time limits on commercial matter in children's programming
and expose the station to enforcement action.[^36] The Commission has
also stated that this program-length commercial policy applies to
"programs in which a product or service is advertised within the body of
the program and not separated from program content as children's
commercials are required to be."[^37]

7\. In a petition for rulemaking filed with the Commission in 2003,
Commercial Alert argues that the Commission's sponsorship identification
rules are inadequate to address embedded advertising techniques, and
thus, these rules fail to fulfill the Commission's mandate under Section
317 of the Communications Act.[^38] For example, Commercial Alert
asserts that "\[t\]here was a statement at the end of a segment
featuring the product placement that \[the television program\] 'Big
Brother 4 is sponsored by McDonald's.' But there was not a hint that
embedded plugs within the show were in fact paid ads."[^39] Commercial
Alert requests revision to these rules to require disclosure of product
placement and integration in entertainment programming at the beginnings
of programs in clear and conspicious language.[^40] Commercial Alert
also requests that disclosure be made concurrently with any product
placement and/or integration, asserting that requiring disclosure only
at the beginning or the end of the program disadvantages viewers who
might miss the announcement.[^41]

8\. In opposition, the Washington Legal Foundation (WLF) and Freedom to
Advertise Coalition (FAC) both argue that embedded advertising
techniques are a longstanding fixture of broadcast advertising that
cause no substantial harm to consumers, that the Commission's existing
sponsorship identification rules are adequate to regulate them, and that
a concurrent disclosure requirement would violate the First
Amendment.[^42] WLF argues that the proposed concurrent disclosure would
so greatly interfere with programming that it would be paramount to a
governmental ban on product placement.[^43] By interfering with both the
"commercial and dramatic reality of television production," asserts WLF,
a concurrent disclosure requirement would be unconstitutionally
overbroad.[^44] Similarly, FAC argues that a concurrent disclosure
requirement would so greatly interfere with the "artistic integrity" of
a program that it would "censor or ban this long standing means of
commercial speech."[^45] FAC also asserts that a concurrent disclosure
requirement lacks a "strong enough governmental interest" to justify the
infringement on commercial speech.[^46] Accordingly, applying the
four-part test developed by the U.S. Supreme Court in *Central Hudson
Gas and Electric Corp. v. Public Service Commission*,[^47] FAC asserts
that any concurrent disclosure requirement would fail to meet the
intermediate standard of review developed for lawful, non-deceptive
commercial speech.[^48]

9\. Two years after the filing of the Commercial Alert Petition, the
Writer's Guild of America, West; the Writer's Guild of America, East;
the Screen Actors Guild; and the associate dean of the USC Annenberg
School for Communication formulated another set recommendations,
including: 1) visual and aural disclosure of product integration at the
beginning of each program; 2) strict limits on product integration in
children\'s programming; 3) input by storytellers, actors, and
directors, arrived at through collective bargaining, about how a product
or brand is to be integrated into content; and 4) extension of all
regulation of product integration to cable television.[^49]
Alternatively, these groups requested the creation of an industry code
on embedded advertising.[^50] More recently, in 2007, Philip Rosenthal
testified on behalf of the Writer's Guild of America, West and the
Screen Actors Guild before the Subcommittee on Telecommunications and
the Internet of the House Committee on Energy and Commerce regarding the
need for greater disclosure requirements because of product placement
and product integration.[^51] In addition, in 2007, Patric Verrone
testified on behalf of the Writers Guild of America, West, during the
Federal Communications Commission's Public Hearing on Media Ownership in
Chicago, Illinois regarding the need for greater disclosure requirements
for product integration.[^52]

**B. DISCUSSION**

10\. We undertake this proceeding in order to consider the complex
questions involved with the practice of embedded advertising, and to
examine ways the Commission can advance the statutory goal entrusted to
us of ensuring that that the public is informed of the sources of
program sponsorship while concurrently balancing the First Amendment and
artistic rights of programmers. We seek comment on current trends in
embedded advertising and the efficacy of the Commission's existing
sponsorship identification rules in protecting the public's right to be
informed in light of these trends. More specifically, we seek comment on
whether and how Sections 73.1212 and 76.1615 of the Commission's rules
should be amended in order to fulfill the purposes of Section 317 and
507 of the Communications Act.

11\. We seek comment on the application of the sponsorship
identification regulations to various embedded advertising techniques.
As noted above, the Commission in 1960 issued a public notice stating
that sponsorship identification requirements applied to "hidden"
commercials embedded in interview programs.[^53] How often are these
embedded advertising practices occurring and in what form? Are the
existing rules effective in ensuring that the public is made aware of
product placement and product integration in entertainment programming?
Are persons involved in the production or preparation of program matter
intended for broadcast fulfilling their obligations under Section 507?
Are broadcasters and cable operators fulfilling their reasonable
diligence obligations under Section 317(c) and the Commission's rules?
Does embedded advertising fit within the exception to disclosure
requirements that applies where the commercial nature and identity of
the sponsor is obvious?[^54]

12\. We also seek comment on whether modifications to the sponsorship
identification rules are warranted to address new developments in the
use of embedded advertising techniques. Are the concurrent disclosures
requested by Commercial Alert necessary to ensure that the public is
aware of sponsored messages that are integrated into entertainment
programming?[^55] Would concurrent disclosures be more or less
disruptive to radio programming? Are other rule modifications warranted?
Should we require disclosures before or after, or before and after, a
program containing integrated sponsored material?[^56] Should we require
disclosure during a program when sponsored products and/or services are
being displayed? Should we require both visual and aural disclosure for
televised announcements?[^57] Should these disclosures contain language
specifying that the content paid for is an "advertisement" or other
specific terms?[^58] Should we require that radio disclosures be of a
certain duration or of a certain volume?

13\. We further seek comment on the First Amendment implications of
possible modifications to the sponsorship identification rules to
address more effectively embedded advertising techniques. In particular,
we invite comment on the arguments raised by WLF and FAC in response to
Commercial Alert's petition. Would the imposition of concurrent
disclosure requirements or other regulations infringe on the artistic
integrity of entertainment programming, as WLF argues? Would such a
regulation be paramount to a ban on embedded advertising, as asserted by
WLF and FAC? Does the apparently common existing practice of
superimposing unrelated promotional material at the bottom of the screen
during a running program belie WLF's and FAC's contention that
concurrent identification would effectively preclude product integration
as a form of commercial speech because it would "infringe on artistic
integrity"? Are the government interests at stake here substantial
enough to justify any such requirements? How can the Commission ensure
that any modified regulations are no more extensive than necessary to
serve these interests?

14\. We also seek comment on whether Section 317 disclosure requirements
should apply to feature films containing embedded advertising when
re-broadcast by a licensee or provided by a cable operator. We note that
in its prior Order, the Commission granted a Section 317 waiver for
feature films.[^59] We found that there was a lack of evidence of
sponsorship within films and observed that there was a lag time between
production of feature films and their exhibition on television. In the
1963 Order, the Commission found no public interest considerations which
would dictate immediate application of Section 317 to feature films
re-broadcast on television. At present, the Commission's rules continue
to waive the sponsorship identification requirements for feature films
"produced initially and primarily for theatre exhibition."[^60] We seek
comment on the use of embedded advertising in feature films today, and
whether the Commission should revisit the decision to waive Section 317
disclosure requirements.

**III. NOTICE OF PROPOSED RULEMAKING**

15\. As stated above, with the exception of sponsored political
advertising and certain issue advertising,[^61] the Commission only
requires that the announcement occur once during the programming and
remain on the screen long enough to be read or heard by an average
viewer.[^62] In this Notice of Inquiry and Notice of Proposed Rulemaking
("*NOI/NPRM*"), we seek comment on a proposed rule change to make the
current disclosure requirement more obvious to the consumer by requiring
that sponsorship identification announcements 1) have lettering of a
particular size and 2) air for a particular amount of time. Currently,
the sponsoring announcement for any television political advertising
concerning candidates for public office must have lettering equal to or
greater than four percent of the vertical picture height and air for not
less than four seconds.[^63] Also, any political broadcast matter or
broadcast matter involving the discussion of a controversial issue of
public importance longer than five minutes "for which any film, record,
transcription, talent, script, or other material or service of any kind
is furnished...to a station as inducement for the broadcasting of such
matter" requires a sponsorship identification announcement both at the
beginning and the conclusion of the broadcast programming containing the
announcement.[^64] We seek comment on whether the Commission should
apply similar standards to all sponsorship identification announcements
and, if so, we seek comment on the size of lettering for these
announcements and the amount of time they should air. We seek
suggestions on any other requirements for these announcements.

16\. We also invite comment on whether the Commission's existing rules
and policies governing commercials in children's programming adequately
vindicate the policy goals underlying the Children's Television Act and
Sections 317 and 507 with respect to embedded advertising in children's
programming. If commenters believe that these rules and policies do not
do so, we invite comment on what additional steps the Commission should
take to regulate embedded advertising in programming directed to
children.[^65] For example, we note that embedded advertising in
children's programming would run afoul of our separation policy because
there would be no bumper between programming content and
advertising.[^66] Should that prohibition be made explicit in our rules?

17\. WGA asks that we extend regulation of product integration to cable
television.[^67] Section 76.1615 of the Commission's rules applies to
origination cablecasting by a cable operator, which 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."[^68] Should the Commission take
additional steps with respect to sponsorship identification
announcements required of cable programmers?

### 18. We also invite comment on issues raised by radio hosts' personal, on-air endorsements of products or services that they may have been provided at little or no cost to them.  In such circumstances, should we presume that an "exchange" of consideration for on-air mentions of the product or service has occurred, thus triggering the obligation to provide a sponsorship announcement?  Should we do so in all such circumstances or should we limit this presumption to situations where other factors enhance the likelihood that an exchange of consideration for air time has taken place. In addition, we invite comment on the scope of the "obviousness" exception to the sponsorship announcement requirement.[^69]  Does that exception apply to endorsements or favorable commentary by a radio host that are integrated into broadcast programming, *i.e*., made to sound like they are part of a radio host's on-air banter rather than an advertisement?  {#we-also-invite-comment-on-issues-raised-by-radio-hosts-personal-on-air-endorsements-of-products-or-services-that-they-may-have-been-provided-at-little-or-no-cost-to-them.-in-such-circumstances-should-we-presume-that-an-exchange-of-consideration-for-on-air-mentions-of-the-product-or-service-has-occurred-thus-triggering-the-obligation-to-provide-a-sponsorship-announcement-should-we-do-so-in-all-such-circumstances-or-should-we-limit-this-presumption-to-situations-where-other-factors-enhance-the-likelihood-that-an-exchange-of-consideration-for-air-time-has-taken-place.-in-addition-we-invite-comment-on-the-scope-of-the-obviousness-exception-to-the-sponsorship-announcement-requirement.-does-that-exception-apply-to-endorsements-or-favorable-commentary-by-a-radio-host-that-are-integrated-into-broadcast-programming-i.e.-made-to-sound-like-they-are-part-of-a-radio-hosts-on-air-banter-rather-than-an-advertisement .unnumbered}

**IV.** **ADMINISTRATIVE** **matters**

## A. Initial Regulatory Flexibility Analysis {#a.-initial-regulatory-flexibility-analysis .unnumbered}

19\. As required by the Regulatory Flexibility Act,[^70] the Commission
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the
possible significant economic impact on a substantial number of small
entities of the proposals addressed in this *Notice of Inquiry and
Notice of Proposed Rulemaking* ("*NOI/NPRM*"). The IRFA is set forth in
the Appendix. Written public comments are requested on the IRFA. These
comments must be filed in accordance with the same filing deadlines for
comments on the *NOI/NPRM*, and they should have a separate and distinct
heading designating them as responses to the IRFA.

## B. Paperwork Reduction Act Analysis {#b.-paperwork-reduction-act-analysis .unnumbered}

20\. This NPRM contains potential revised information collection
requirements.  If the Commission adopts any revised information
collection requirements, the Commission will publish a notice in the
Federal Register inviting the public to comment on the requirements, as
required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44
U.S.C. 3501-3520).  In addition, pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see  44 U.S.C.
3506(c)(4), the Commission seeks specific comment on how it might
"further reduce the information collection burden for small business
concerns with fewer than 25 employees."

**C. Ex Parte Rules**

21\. *Permit-But-Disclose.* This proceeding will be treated as a
"permit-but-disclose" proceeding subject to the "permit-but-disclose"
requirements under section 1.1206(b) of the Commission's rules.[^71] *Ex
parte* presentations are permissible if disclosed in accordance with
Commission rules, except during the Sunshine Agenda period when
presentations, *ex parte* or otherwise, are generally prohibited.
Persons making oral *ex parte* presentations are reminded that a
memorandum summarizing a presentation must contain a summary of the
substance of the presentation and not merely a listing of the subjects
discussed. More than a one- or two-sentence description of the views and
arguments presented is generally required.[^72] Additional rules
pertaining to oral and written presentations are set forth in section
1.1206(b).

## Filing Requirements

22\. *Comment 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
(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](http://www.regulations.gov/). Filers
    should follow the instructions provided on the website for
    submitting comments.

    -   For ECFS filers, if multiple docket or rulemaking numbers appear
        in the caption of this proceeding, filers must transmit one
        electronic copy of the comments for each docket or rulemaking
        number referenced in the caption. In completing the transmittal
        screen, filers should include their full name, U.S. Postal
        Service mailing address, and the applicable docket or rulemaking
        number. Parties may also submit an electronic comment by
        Internet e-mail. To get filing instructions, filers should send
        an e-mail to <ecfs@fcc.gov>, and include the following words in
        the body of the message, "get form." A sample form and
        directions will be sent in response.

```{=html}
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```
-   Paper Filers: Parties who choose to file by paper must file an
    original and four copies of each filing. If more than one docket or
    rulemaking number appears in the caption of this proceeding, filers
    must submit two additional copies for each additional docket or
    rulemaking number.

> 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 8:00 a.m. to 7:00 p.m. All hand
    deliveries must be held together with rubber bands or fasteners. Any
    envelopes must be disposed of [before]{.underline} 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 12^th^ Street, SW, Washington DC 20554.

People with Disabilities: To request materials in accessible formats for
people with disabilities (braille, large print, electronic files, audio
format), send an e-mail or call the Consumer & Governmental Affairs
Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

Comments, reply comments, and *ex parte* submissions will be available
for public inspection during regular business hours in the FCC Reference
Center, Federal Communications Commission, 445 12^th^ Street, S.W.,
CY-A257, Washington, D.C., 20554. These documents will also be available
via ECFS. Documents will be available electronically in ASCII, Word 97,
and/or Adobe Acrobat.

23\. *Additional Information*. For additional information on this
proceeding, contact John Norton, <John.Norton@fcc.gov>, of the Media
Bureau, Policy Division, (202) 418-2120.

# V. ORDERING CLAUSES {#v.-ordering-clauses .unnumbered}

24\. Accordingly, **IT IS ORDERED**, pursuant to the authority contained
in Sections 4(i) & (j), 303, 317, 403, and 507 of the Communications Act
of 1934, 47 U.S.C §§ 154(i) & (j), 303(r), 303a, 317, 403, and 508, this
*Notice of Inquiry and Notice of Proposed Rulemaking* **IS ADOPTED**.

25\. **IT IS FURTHER ORDERED** that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, **SHALL
SEND** a copy of this *Notice of Inquiry and Notice of Proposed
Rulemaking,* including the Initial Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

> Marlene H. Dortch
>
> Secretary

APPENDIX

Initial Regulatory Flexibility Analysis

1\. As required by the Regulatory Flexibility Act of 1980, as amended
(the "RFA"),[^73] the Commission has prepared this Initial Regulatory
Flexibility Analysis ("IRFA") of the possible significant economic
impact of the policies and rules proposed in the *Notice of Inquiry and
Notice of Proposed Rulemaking* ("*NOI/NPRM*") on a substantial number of
small entities.[^74] Written public comments are requested on this IRFA.
Comments must be identified as responses to the IRFA and must be filed
by the deadlines for comments on the *NOI/NPRM*. The Commission will
send a copy of the *NOI/NPRM*, including this IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration ("SBA").[^75] In
addition, the *NOI/NPRM* and IRFA (or summaries thereof) will be
published in the Federal Register.[^76]

**A. Need for, and Objectives of, the Proposed Rules**

2\. Our goal in commencing this proceeding is to seek comment on current
trends in embedded advertising and potential changes to the current
sponsorship identification regulations with regard to embedded
advertising. Given the increased prevalence of embedded advertising
techniques, it is important that sponsorship identification rules
protect the public's right to know who is paying to air commercials or
other program matter on broadcast television and radio and cable.

3\. In this *NOI/NPRM*, we seek comment on a proposed rule change to
make the current disclosure requirement more obvious to the consumer by
requiring that sponsorship identification announcements 1) have
lettering of a particular size and 2) air for a particular amount of
time, and seek suggestions for any other requirements for these
announcements. We also invite comment on whether the Commission's
existing rules and policies governing commercials in children's
programming adequately vindicate the policy goals underlying the
Children's Television Act and Sections 317 and 507 with respect to
embedded advertising in children's programming. We also ask whether we
should take additional steps with respect to sponsorship identification
announcements required of cable programmers. In addition, we invite
comment on issues raised by radio hosts' personal, on-air endorsements
of products or services that they may have been provided at little or no
cost to them: should we presume that an "exchange" of consideration for
on-air mentions of the product or service has occurred, thus triggering
the obligation to provide a sponsorship announcement; and does the
"obviousness" exception to the sponsorship announcement requirement
apply to endorsements or favorable commentary by a radio host that are
integrated into broadcast programming, *i.e.*, made to sound like they
are part of a radio host's on-air banter rather than an advertisement?

**B. Legal Basis**

4\. The authority for the action proposed in this rulemaking is
contained in Sections 4(i) & (j), 303(r), 317, 403, and 507 of the
Communications Act of 1934 as amended, 47 U.S.C. §§ 154(i) & (j),
303(r), 303a, 317, 403, and 508.

**C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply**

5\. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term "small entity" as having the same meaning as the terms "small
business," "small organization," and "small governmental jurisdiction."
In addition, the term "small business" has the same meaning as the term
"small business concern" under the Small Business Act. A "small business
concern" is one which: (1) is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any additional
criteria established by the Small Business Administration ("SBA").

6\. *Television Broadcasting*. The Census Bureau defines this category
as follows: "This industry comprises establishments primarily engaged in
broadcasting images together with sound. These establishments operate
television broadcasting studios and facilities for the programming and
transmission of programs to the public." [^77] The SBA has created a
small business size standard for Television Broadcasting entities, which
is: such firms having \$13 million or less in annual receipts.[^78] The
Commission has estimated the number of licensed commercial television
stations to be 1,379.[^79] In addition, according to Commission staff
review of the BIA Publications, Inc., Master Access Television Analyzer
Database (BIA) on March 30, 2007, about 986 of an estimated 1,374
commercial television stations (or approximately 72 percent) had
revenues of \$13 million or less.[^80] We therefore estimate that the
majority of commercial television broadcasters are small entities.

7\. We note, however, that in assessing whether a business concern
qualifies as small under the above definition, business (control)
affiliations must be included.[^81] Our estimate, therefore, likely
overstates the number of small entities that might be affected by our
action, because the revenue figure on which it is based does not include
or aggregate revenues from affiliated companies. In addition, an element
of the definition of "small business" is that the entity not be dominant
in its field of operation. We are unable at this time to define or
quantify the criteria that would establish whether a specific television
station is dominant in its field of operation. Accordingly, the estimate
of small businesses to which rules may apply does not exclude any
television station from the definition of a small business on this basis
and is therefore possibly over-inclusive to that extent.

8\. In addition, the Commission has estimated that number of licensed
noncommercial educational (NCE) television stations to be 380.[^82]
These stations are non-profit, and therefore considered small
entities.[^83] In addition, there are also 2,295 low power television
stations (LPTV).[^84] Given the nature of this service, we will presume
that all LPTV licensees qualify as small entities under the above SBA
small business size standard.

9\. *Cable Television Distribution Services*. Since 2007, these services
have been newly defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
"This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies."[^85] The SBA has developed an associated small business
size standard for this category, and that is: all such firms having
1,500 or fewer employees. To gauge small business prevalence for these
cable services we must, however, use current census data that are based
on the previous category of Cable and Other Program Distribution and its
associated size standard; that size standard was: all such firms having
\$13.5 million or less in annual receipts.[^86] According to Census
Bureau data for 2002, there were a total of 1,191 firms in this category
that operated for the entire year.[^87] Of this total, 1,087 firms had
annual receipts of under \$10 million, and 43 firms had receipts of \$10
million or more but less than \$25 million.[^88] Thus, the majority of
these cable firms can be considered to be small.

10\. *Cable Companies and Systems.* The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a "small cable company" is one
serving 400,000 or fewer subscribers, nationwide.[^89] Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard.[^90] In addition, under the Commission's
rules, a "small system" is a cable system serving 15,000 or fewer
subscribers.[^91] Industry data indicate that, of 7,208 systems
nationwide, 6,139 systems have under 10,000 subscribers, and an
additional 379 systems have 10,000-19,999 subscribers.[^92] Thus, under
this second size standard, most cable systems are small.

11\. *Cable System Operators*. The Communications Act of 1934, as
amended, also contains a size standard for small cable system operators,
which is "a cable operator that, directly or through an affiliate,
serves in the aggregate fewer than 1 percent of all subscribers in the
United States and is not affiliated with any entity or entities whose
gross annual revenues in the aggregate exceed \$250,000,000."[^93] The
Commission has determined that an operator serving fewer than 677,000
subscribers shall be deemed a small operator, if its annual revenues,
when combined with the total annual revenues of all its affiliates, do
not exceed \$250 million in the aggregate.[^94] Industry data indicate
that, of 1,076 cable operators nationwide, all but ten are small under
this size standard.[^95] We note that the Commission neither requests
nor collects information on whether cable system operators are
affiliated with entities whose gross annual revenues exceed \$250
million,[^96] and therefore we are unable to estimate more accurately
the number of cable system operators that would qualify as small under
this size standard.

12\. *Radio Stations*. The proposed rules and policies potentially will
apply to all AM and commercial FM radio broadcasting licensees and
potential licensees. The SBA defines a radio broadcasting station that
has \$6.5 million or less in annual receipts as a small business.[^97] A
radio broadcasting station is an establishment primarily engaged in
broadcasting aural programs by radio to the public.[^98] Included in
this industry are commercial, religious, educational, and other radio
stations.[^99] Radio broadcasting stations which primarily are engaged
in radio broadcasting and which produce radio program materials are
similarly included.[^100] However, radio stations that are separate
establishments and are primarily engaged in producing radio program
material are classified under another NAICS number.[^101] According to
Commission staff review of BIA Publications, Inc. Master Access Radio
Analyzer Database on March 31, 2005, about 10,840 (95%) of 11,410
commercial radio stations have revenue of \$6.5 million or less. We
note, however, that many radio stations are affiliated with much larger
corporations having much higher revenue. Our estimate, therefore, likely
overstates the number of small entities that might be affected by our
action.

**D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements**

13\. The *NOI/NPRM* does not propose any additional recordkeeping
requirements but these types of requirements may be suggested by
commenters. Some of the proposed rules do require additional on-air
reporting to the public of sponsorship identification, which could
result in more sponsorship identification announcement requirements for
stations/cable systems to monitor and for producers to insert into their
programming.

**E. Steps Taken to Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered**

14\. The RFA requires an agency to describe any significant
alternatives, specifically small business alternatives, that it has
considered in reaching its proposed approach, which may include the
following four alternatives (among others): "(1) the establishment of
differing compliance or reporting requirements or timetables that take
into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities."

15\. The proposals in the *NOI/NPRM*[^102] would apply equally to large
and small entities and we have no evidence that the burden of any of our
proposals is significantly greater for small entities. As noted, some of
the proposed rules do require additional on-air reporting to the public
of sponsorship identification, which could result in more sponsorship
identification announcement requirements for stations/cable systems to
monitor and for producers to insert into their programming. We
anticipate that some portion of the cost of compliance with the
proposals will fall on producers of programming, which are indirectly
affected. However, we acknowledge that some portion of the cost may fall
on stations themselves. Accordingly, we welcome comment on modifications
of the proposals if such modifications might assist small entities and
especially if such comments are based on evidence of potential economic
differential impact of the regulations on small entities that might have
to absorb some of the cost of compliance.

**F. Federal Rules that May Duplicate, overlap, or Conflict with the
Commission's Proposals.**

16\. None.

##   {#section .unnumbered}

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

*Re: Sponsorship Identification Rules and Embedded Advertising,* MB
Docket No. 08-90.

At our first media ownership hearing in June of 2006, several witnesses
raised concerns about the issue of product integration.  TiVos and
Digital Video Recorders now allow viewers to more easily skip
commercials.  Due, in part, to these technological developments,
networks may be turning to more subtle and sophisticated means of
incorporating commercial messages into traditional programming.  As
these techniques become increasingly prevalent, there is a growing
concern that our sponsorship identification rules might fall short of
their ultimate goal:  to ensure that the public is able to identify both
the commercial nature of any programming, as well as its source. 

I believe it is important for consumers to know when someone is trying
to sell them something.  That is why, at our media ownership hearing in
September of 2007, I called on my colleagues to adopt this Notice, which
seeks comment on the relationship between the Commission's sponsorship
identification rules and increasing industry reliance on embedded
advertising techniques.  Specifically, we examine whether it is
necessary to amend the Commission's sponsorship identification rules to
ensure adequate disclosure to the public.

I am pleased that the Commission has finally and unanimously voted to
approve this item.

STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

*Re: Sponsorship Identification Rules and Embedded Advertising,* MB
Docket No. 08-90.

The fundamental premise of our sponsorship identification rules is that
the American public is entitled to know who is trying to persuade them.
That premise applies to a wide range of conduct, from payola to
political advertising to product placement. This rulemaking is intended
to determine whether our sponsorship identification rules need updating
in order to provide adequate notice of certain types of "embedded"
advertising practices that have proliferated in recent years.

It is difficult to watch television and not be struck by the amount of
product placement. According to press reports, product placement on
broadcast TV during the first quarter of 2008 was up almost 40% from the
previous year---including a whopping 3,291 product placements on
top-rated *American Idol* alone. Concerns have also been raised about
the growth of "product integration," in which, unlike product placement,
the commercial product is not shown but is woven into the plot of a
storyline or script. These kinds of stealth advertising may be
particularly insidious because viewers often are unaware that someone is
trying to influence, persuade, or market to them.

Whether these embedded advertising techniques have proliferated because
DVR households fast-forward through commercials or for other reasons, it
is the Commission's job to make sure that sponsored programming is
properly identified. I agree with the recent filing by a group of 23
public health, media and child advocacy groups that all of these issues
could have been addressed---and should have been addressed---in a
*Notice of Proposed Rulemaking (NPRM)*. Unfortunately, that position did
not command a majority at the Commission. In the end, I supported the
proposal to split the docket into an *NPRM* and a *Notice of Inquiry
(NOI)*. While this means more time than I would like to reach final
rules in some areas, I believe it is important to initiate the public
dialogue and begin developing a detailed record. Moreover, the *NPRM*
section tees up certain key issues on which we can move directly to
rules---such as whether and how to make sponsorship identification more
obvious to consumers, and rules regarding embedded advertising in
children's programming.

On the latter point, it is my strong initial belief that embedded
advertising in children's programming is already prohibited because it
would run afoul of our existing requirement that there be adequate
separation between programming content and advertising. The Commission's
existing policies in this area---which also include a ban on
host-selling and tie-ins on children's programming---target those
practices that unfairly take advantage of the inability of children to
distinguish between programming and commercial content. I hope we can
move quickly to clarify our rules in this area as necessary and to take
any appropriate enforcement action.

**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

Re: *Sponsorship Identification Rules and Embedded Advertising,* MB
Docket No. 08-90.

Today's *Notice of Proposed Rulemaking* addresses head-on a concern I
have pushed for many years: the need to clarify our sponsorship
identification rules. It also addresses concerns at the heart of my
Agenda to Protect American Children and Families,[^103] specifically
whether our current rules governing commercials in children's
programming need to be updated to adequately protect children from
embedded advertising.

"Reality TV" should mean informing viewers about who is secretly
pitching to them in the TV shows they are watching. The true reality is
that news and entertainment alike are practically being turned into
undisclosed commercials. Many current practices fly in the face of
viewers' legal right to know who is pitching to them.

After more than three years since I originally called on the Commission
to update our sponsorship identification rules and to clarify the
application of these rules to children's programming,[^104] I am pleased
that we are finally seeking comment on what additional steps the
Commission should take. Just this month, I have spoken twice about the
urgency to move this item forward and explained the need for the
Commission to protect our children from marketers' efforts to prey upon
their unsuspecting minds. Despite longstanding majority support,
including Chairman Martin's commendable leadership, the release of this
*Notice* has suffered from almost unprecedented delays.

The *Notice* takes an important step in addressing the concerns that
parents, experts, and I have been voicing for years about the unhealthy
messages American media are feeding our kids. Children under the age of
eight simply do not recognize that ads are trying to persuade them and
tend to accept them as true and unbiased.[^105] Given that the majority
of TV ads targeted to kids are for food products,[^106] and that the ad
industry spends more than \$10 billion per year in marketing food to
them,[^107] it is no surprise that studies have linked commercials to
the dramatic increases in childhood obesity and associated health
problems like diabetes.[^108] Because children are ill-equipped to
identify advertising, especially when it is embedded in a program with
their favorite character, [^109] we need to review and update our
sponsorship identification rules. Those of us who are concerned about
children need to show leadership, not foot-dragging, in addressing these
practices.

I am also pleased that today's *Notice* has adopted the suggestion I
made in 2005 to define what is meant by "disclosure" in our sponsorship
identification rules. Many current practices make a mockery of our
regulatory requirement that consumers have a right to "full and fair"
disclosure**.**[^110] If it takes a magnifying glass to see a tiny
acknowledgement whizzing by the screen at the end of a show, that is
evading the spirit of the law. More clarification is clearly needed. The
main accomplishment of this *Notice* is that it seeks to establish
specific guidelines addressing the nature of the disclosure, including
font size of the sponsorship credits and the amount of time they are
aired. The need for updating the disclosure rules is critical. Not only
do we need to help parents protect their children from
over-commercialism, we need to ensure that all Americans have the tools
necessary to separate the programming wheat from the advertising chaff.

I would have liked to have gone further in asking more questions in the
*NPRM*, rather than shunting them off to a *Notice of Inquiry*. We
should not be afraid to put all options on the table. As Congressmen
Markey and Waxman noted in their September 26, 2007 letter to the FCC
regarding this proceeding, as embedded advertising expands, sponsorship
identification law must evolve to ensure that broadcasters and cable
operators comply in a meaningful way. Because an *NOI* cannot lead
directly to rule making, the result may be a piecemeal approach to
reforming these rules.

Embedded advertising is increasing at a staggering rate, and we must
examine how to update the rules in a comprehensive fashion. Product
placement on broadcast TV rose at an annual rate of almost 40 percent in
the first quarter of 2008, with reality shows *The Biggest Loser* and
*American Idol* each embedding over three thousand product placements
during that time.[^111] Also, major networks have created client-facing
divisions specifically focused on how best to embed advertisers'
messages and products into programming. In the age of convergence, the
line between promotional and editorial voices has been blurred. Viewers
engrossed in the story are not likely to apply critical thinking to
identify advertising. Even if they do look for sponsorship ID, it is
nearly impossible to detect them in the single, instantaneous period
they roll by in the credits at the end of the program.

Such inadequate disclosure is bad for content, democracy, and our
children's health. When viewers cannot distinguish content from
advertising, the market check on content quality fails, and we see a
race to the bottom where television shows become program-length
infomercials. We have heard from the Writers Guild about this -- writers
are upset about being told to write story lines around
advertisements.[^112] Further, when audiences are fooled into believing
they are watching real news by video "news releases" and so-called news
analysts who are paid off, their trust in the discourse shapers -- the
news broadcasters, TV writers, and DJs -- suffers and so does the
marketplace of ideas.[^113] The public deserves to know what it is
watching, and democracy demands it. This *Notice* makes real progress in
helping ensure those goals are met.

While it does not accomplish everything I would have liked, we are
moving in the right direction by adopting this *Notice* to consider
improvements to our sponsorship identification and children advertising
rules. Accordingly, I approve this item.

[^1]: Embedded advertising describes situations where sponsored brands
    are included in entertainment programming. Embedded advertising is
    used here generally to describe both product integration and product
    placement, defined below. *See infra*, note 2.

[^2]: Product placement is the practice of inserting "branded products
    into programming in exchange for fees or other consideration." *See*
    Letter from Mary K. Engle, Associate Director for Advertising
    Practices, Federal Trade Commission, to Gary Ruskin, Executive
    Director, Commercial Alert, 6 (Feb. 10, 2005), *available at*
    <http://www.ftc.gov/os/closings/staff/050210productplacement.pdf>.
    The Writers Guild and others have made a distinction between the
    mere use of products as props in television programming and the
    integration of the product into the plot of the story. Product
    placement is the placement of commercial products as props in
    television programming, whereas product integration integrates the
    product into the dialogue and/or plot of a program. *See* *e.g*.,
    Writers Guild of America, West and Writers Guild of America, East,
    White Paper, *Are You Selling to Me?*, November 14, 2005, at 2,
    *available at* <http://www.wga.org/subpage_newsevents.aspx?id=1422>
    ("*Writer's Guild White Paper*"); Wayne Freidman and Jean Haliday,
    *Product Integrators Tackle Learning Curve*, 73
    A[dvertising]{.smallcaps} A[ge]{.smallcaps} 18 (2002). Commercial
    Alert in its Petition for Rulemaking (September 30, 2003) also
    identifies "title placement," the practice of placing brand names in
    the title of television programs, such as the WB's *Pepsi Smash*.
    *See infra,* note 15.

[^3]: *See, e.g.,* Namati Bhatnagar, Lerzon M. Askoy, and Selin A.
    Malkoc, *Efficacy of Brand Placements, the Impact of Consumer
    Awareness and Message Salience* in L.J. Shurm, Special Session
    Summary, *Where Art and Commerce Collide: A Funnel Approach to
    Embedding Messages in Non-Traditional Media*, 30
    A[dvances]{.smallcaps} [in]{.smallcaps} C[onsumer]{.smallcaps}
    R[esearch]{.smallcaps} 170, 172 (2003) (noting that "there appears
    to be a general consensus that consumers are more skeptical of
    advertised claims (where persuasion is overt and easily perceived)
    than placed claims (where persuasion is harder to discern)"
    (citations omitted)); Cristel Antonia Russell, *Investigating the
    Effectiveness of Product Placement in Television Shows: The Role of
    Modality and Plot Connection Congruence on Brand Memory and
    Attitude,* 29 J[ournal]{.smallcaps} [of]{.smallcaps}
    C[onsumer]{.smallcaps} R[esearch]{.smallcaps} 306, 307 (2002)
    (noting that "\[i\]n today\'s oversaturated and fragmented
    advertising landscape, such hybrid advertisements ... may prove more
    powerful than traditional advertisements if they are not perceived
    as persuasive messages." (citations omitted)).

[^4]: *See* Wayne Friedman, *NBC's Graboff: Mo' Better Branding*,
    M[edia]{.smallcaps} P[ost,]{.smallcaps} June 11, 2007, *available
    at*
    <http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=62104>
    (noting that "\[d\]ue to increased time-shifting---and as a
    consequence, viewers' increasing habit of fast-forwarding through
    commercials---NBC will continue to try to get marketing messages
    inside programs"); Stuart Elliott, *The Media Business: Advertising;
    Ads That Are Too Fast for a Fast-Forward Button*, N[ew]{.smallcaps}
    Y[ork]{.smallcaps} T[imes]{.smallcaps}, May 18, 2007, *available at*
    <http://www.nytimes.com/2007/05/18/business/media/18adco.html?ex=1337140800&en=726593664a9d4d95&ei=5088&partner=rssnyt&emc=rss>
    (emphasizing that the industry may be moving away from traditional
    commercial breaks because of increasing prevalence of DVR owners,
    and because of Nielsen Media Research's decision to measure
    viewership of commercials).

[^5]: *See* Gail Schiller, *Report: Product Placements on the Rise*,
    T[he]{.smallcaps} H[ollywood]{.smallcaps} R[eporter,]{.smallcaps}
    July 28, 2005 (quoting PQ Media president Patrick Quinn:
    "Advertisers and marketers are scrambling like never before to
    compete for consumers\' time and money in this era of increasing
    audience fragmentation, advertising clutter, media multi-tasking and
    ad-skipping technology....").

[^6]: *See* Stuart Elliott, *The Media Business: Advertising; Ads That
    Are Too Fast for a Fast-Forward Button*, *supra* note 5; Gail
    Schiller, *Out of their place; Integration Dips,* T[he]{.smallcaps}
    H[ollywood]{.smallcaps} R[eporter]{.smallcaps}, December 29, 2006,
    *available at*
    <http://www.hollywoodreporter.com/hr/content_display/film/marketing/e3i73449c66171eef17b0a390b6391dfc05>.

[^7]: *See* David Kaplan, *Product Placement Outpaces Ad Spending*,
    March 30, 2005, M[edia]{.smallcaps} P[ost]{.smallcaps}, *available
    at*
    <http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=28681&Nid=12778&p=276816>.

[^8]: S*ee Exclusive PQ Media Research: Global Paid Product Placement
    Spending Surged 42.2% to \$2.21 Billion in 2005; Double-Digit Pace
    to Continue in 2006 and Beyond*, *available at*
    <http://www.pqmedia.com/about-press-20060816-gppf2006.html>. Based
    on these figures, the United States has the largest and fastest
    growing market in the world.

[^9]: *See U.S. Advertising Spending Rose 4.6% in 2006, Nielsen
    Monitor-Plus Reports*, *available at*
    <http://www.nielsenmedia.com/nc/portal/site/Public/menuitem.55dc65b4a7d5adff3f65936147a062a0/?vgnextoid=23922dafb3b61110VgnVCM100000ac0a260aRCRD>.
    There were 102,793 occurrences of product placements during
    primetime in 2005; 79,701 occurrences in 2006.

[^10]: *See U.S. Advertising Spending Declined 0.6% in First Quarter
    2007, Nielsen Monitor-Plus Reports*, *available at*
    <http://www.nielsenmedia.com/nc/portal/site/Public/menuitem.55dc65b4a7d5adff3f65936147a062a0/?vgnextoid=764d40cf14023110VgnVCM100000ac0a260aRCRD>.
    During the first quarter of 2007, product placements occurred 8,893
    times on Neilson's Top 10 programs compared to 8,793 times in the
    first quarter of 2006. Many of these top 10 shows are reality
    shows---such as American Idol (ranked #1) and the Apprentice (ranked
    #4). *See id*. *See also Writer's Guild White Paper* at 4-6
    (emphasizing that reality shows spurred the development of
    wide-spread product placement and integration because of the lower
    risks associated with the short-run, open ended formats of these
    shows).

[^11]: *See* John Consoli, *CW Creates Content Wraps within Commercial
    Pods*, 16 M[ediaweek]{.smallcaps} 4 (2006).

[^12]: *See* Jon Lafayette*, CW Tries to Break Away from Commercials*,
    TV W[eek]{.smallcaps}, May 17, 2007, *available at*
    <http://www.tvweek.com/news/2007/05/cw_tries_to_break_away_from_co.php>
    (quoting Bill Morningstar, head of ad sales for CW: "\[t\]he idea is
    to surprise viewers by using nontraditional commercial forms. An
    individual advertiser such as a movie studio would air three of the
    \"cwickies,\" either in a show or over the night .... After they
    air, the sponsor could have a longer-form payoff, such as a
    trailer"). We note that in 1962, the Commission issued a warning to
    broadcast stations that sponsorship identification requirements
    applied to "teaser announcements," a series of short, promotional
    messages which did not identify the product until a final
    announcement. *See In re Broadcasters Warned Against "Teaser" or
    "Come-On" Spots Where Neither Sponsor nor Sponsor's Product Is
    Announced,* Public Notice, 40 F.C.C. 135 (1962). There appears to be
    similarity between these "teaser announcements" and "cwickies,"
    although "cwickies" may or may not identify the product.

[^13]: *See* Richard Linnett, *Fox Sports Specialty: Product
    'Immersion': Net Inks Tie-Ins with Snapple, Labatt, Lincoln*,
    A[dvertising]{.smallcaps} A[ge]{.smallcaps}, January 20, 2003.

[^14]: Wayne Friedman, *NBC's Graboff: Mo' Better Branding*,
    M[edia]{.smallcaps} P[ost,]{.smallcaps} June 11, 2007, *available
    at*
    <http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=62104>
    (quoting Marc Graboff, co-chairman of NBC Entertainment and NBC
    Universal Television Studio: "Creative has been typically in its
    silo here in Los Angeles, and advertising sales in its silo in New
    York. Why not have someone from the sales group in the room during
    those development meetings?\").

[^15]: *See* Gary Ruskin, Executive Director, Commercial Alert,
    Complaint, Request for Investigation, and Petition for Rulemaking to
    Establish Adequate Disclosure of Product Placement on Television
    (September 30, 2003) at 7 ("Commercial Alert Petition").

[^16]: *See In re Applicability of Sponsorship Identification Rules*,
    Public Notice, 40 F.C.C. 141 (1963) ("*Sponsorship Identification*")
    (emphasizing that "listeners are entitled to know by whom they are
    being persuaded").

[^17]: Section 317(a) (1) of the Communications Act of 1934, as amended
    ("Communications Act") provides:

    > all matter broadcast by any radio station for which 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.

    Congress also inserted a proviso in Section 317(a)(1) to clarify
    that "service or other valuable consideration" does

    > not include any service or property furnished without charge or at
    > a nominal charge for use on, or in connection with, a broadcast,
    > unless it is so furnished in consideration for an identification
    > in a broadcast of any person, product, service, trademark, or
    > brand name beyond an identification which is reasonably related to
    > the use of such service or property on the broadcast.

    Therefore, whenever a service or property is provided without charge
    or at a nominal charge to a station in connection with a broadcast,
    sponsorship identification is not required unless it is furnished in
    consideration for an identification that is "beyond an
    identification which is reasonably related to the use of such
    service or property on the broadcast." *Id*. The House Committee on
    Interstate and Foreign Commerce provided several illustrations of
    when an identification is beyond that "reasonably related to the use
    of such service or property on the broadcast." For example, a scenic
    travel video provided without charge by a bus company does not
    trigger sponsorship identification requirements if the bus "is shown
    fleetingly in highway views in such a manner reasonably related to
    that travel program," but does trigger these requirements if the bus
    is "shown to an extent disproportionate to the subject matter of the
    film...." *National Association for Better Broadcasting v. FCC*, 830
    F. 2d 270, 277 (1987) (citing H.R. Rep. No. 1800, 86^th^ Cong., 2d
    Sess. (1960), reprinted in \[1960\] U.S. Code Cong. & Admin. News
    3516, 3532). By way of public notice, the Commission stated that it
    would use these illustrations as guidance in applying the
    Commission's rules. *See Sponsorship Identification*, Public Notice,
    40 F.C.C. 141 (1963). Where consideration is in the form of money,
    the proviso does not apply and a sponsorship announcement is
    required. *See Earl Glickman*, 3 F.C.C. 2d 326 (1996).

[^18]: 47 U.S.C. § 317(c); *see also* 47 C.F.R. §§ 73.1212(b),
    76.1615(b). Section 317(c) of the Communications Act provides that a
    licensee must:

    > 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 \[Section
    > 317\].

[^19]: 47 U.S.C. § 508.

[^20]: 47 C.F.R. § 73.1212.

[^21]: 47 C.F.R. § 76.1615.

[^22]: Section 76.1615 of the Commission's rules applies the broadcast
    provisions of Section 317 of the Communications Act to origination
    cablecasting. Section 507 of the Communications Act, however, is not
    reflected in a rule applicable to cable programming, and its
    provisions do not apply to cable programming. *See Amendment of the
    Commission\'s Sponsorship Identification Rules (Sections 73.119,
    73.289, 73.654, 73.789 and 76.221)*, Report and Order, 52 F.C.C. 2d
    701 at n.10 (1975).

[^23]: *National Ass\'n for Better Broadcasting v. FCC*, 830 F.2d 270
    (1987). In 2002, the Commission denied the Advertising Council's
    request for declaratory ruling or waiver concerning certain public
    service announcements as interpreted under the Commission\'s
    sponsorship identification requirements, concluding among other
    things that "\[i\]t is not the nature of the message conveyed in
    broadcast material that determines whether an identification is
    required but whether or not a station receives valuable
    consideration for broadcasting it." *Advertising Council Request For
    Declaratory Ruling or Waiver Concerning Sponsorship Identification
    Rules*, 17 FCC Rcd 22616, 22621 (2002), *recon. pending*.

[^24]: *See In re "Teaser" Announcements*, 40 F.C.C. 60 (1959).

[^25]: *See* 47 C.F.R. § 73.1212(f). Section 73.1212(f) provides:

    > In the case of broadcast matter advertising commercial products or
    > services, an announcement stating the sponsor\'s corporate or
    > trade name, or the name of the sponsor\'s product, when it is
    > clear that the mention of the name of the product constitutes a
    > sponsorship identification, shall be deemed sufficient for the
    > purpose of this section and only one such announcement need be
    > made at any time during the course of the broadcast.

    An equivalent provision applies to origination cablecasting. *See*
    47 C.F.R. §76.1615(e).

[^26]: *See* Letter to Edward G. Atsinger III, President of Salem Media
    Corporation, Radio Station WMCA(AM), 7 FCC Rcd 927 n.1 (1992). *See
    also, e.g., Classical Acquisition Limited Partnership Licensee,
    Radio Station WTEM(AM)*, 10 FCC Rcd 11004 (1995) (emphasizing that
    this exception applies when the product name and the sponsor are
    "obviously intertwined in the public mind.").

[^27]: *See* *In the matter of Codification of the Commission's
    Political Programming Policies,* Opinion and Order, 7 FCC Rcd 1616
    (1992).

[^28]: *See Application of Sponsorship Identification Rules to Political
    Broadcasts, Teaser Announcements, Governmental Entities and Other
    Organizations*, Public Notice, 66 F.C.C. 2d 302 (1977).

[^29]: *See Codification of the Commission's Political Programming
    Policies*, Opinion and Order, 7 FCC Rcd 678, 687 (1991).

[^30]: In 1970, for example, the Commission issued a public notice
    making clear that under Section 317 and 507, a producer receiving
    compensation or other valuable consideration for inclusion of matter
    in a program must report its receipt to the licensee, who in turn
    must make an appropriate disclosure. *Application of Sections 317
    and 507 of the Communications Act to "Kickbacks" of Fees Paid to
    Performers*, Public Notice, 23 FCC 2d 588 (1970). In 1977, the
    Commission issued a public notice addressing the "widespread"
    failure of licensees to disclose sponsorship with respect to a
    nationwide "teaser" campaign sponsored by a religious organization,
    as well as for a commercial message paid for by governmental
    entities, local public service organizations, and trade
    associations. The Commission also directed attention to "numerous
    complaints" filed by the public claiming that the sponsorship
    identifications associated with certain election ads were illegible.
    *See* *Application of Sponsorship Identification Rules to Political
    Broadcasts, Teaser Announcements, Governmental Entities and Other
    Organizations,* Public Notice, 66 FCC 2d 302 (1977). *See also In re
    Broadcasters Warned Against "Teaser" or "Come-On" Spots Where
    Neither Sponsor nor Sponsor's Product Is Announced,* Public Notice,
    40 F.C.C. 135 (1962); *In the Matter of Amendment of Section
    3.119(e) of the Commission's Rules and Regulations so as to Permit
    Utilization of "Teaser" Announcements Without Sponsorship
    Identification of Each Such Announcement,* Opinion and Order, 40
    F.C.C. 60 (1959). In 1988, the Commission warned licensees about the
    failure to disclose sponsored promotions and payola. *See Commission
    Warns Licensees About Payola and Undisclosed Promotion,* Public
    Notice, 4 FCC Rcd 7708 (1988). In 1991, the Commission issued a
    public notice reminding cable operators and broadcast licensees that
    the sponsorship identification requirements applied to public
    service announcements paid for by governmental, non-profit, and
    other entities. *See Commission Reminds Broadcast Licensees and
    Cable Operators of Sponsorship Identification Requirements
    Applicable to Paid-For "Public Service" Messages*, Public Notice, 6
    FCC Rcd 5861 (1991). In 2005, the Commission issued a public notice
    reminding licensees, cable operators and others of their disclosure
    obligation with respect to video news releases (VNR). *See
    Commission Reminds Broadcast Licensees, Cable Operators and Others
    of Requirements Applicable to Video News Releases and Seeks Comment
    on the Use of Video New Releases by Broadcast Licensees and Cable
    Operators*, Public Notice, 20 FCC Rcd 8593 (2005).

[^31]: *See Inquiry Into Hidden Commercials In Recorded "Interview"
    Programs*, Public Notice, 40 F.C.C. 81 (1960). This public notice
    inquired into the prevalence of "hidden commercials" in "interview
    programs," describing situations where during the course of the
    interview, one party may "casually mention one or more commercial
    products." Because these deals were often orchestrated by parties
    other than the broadcaster, the Commission requested licensees to
    "use more than ordinary diligence" in monitoring sponsorship
    activity in these shows. *Id. See also In re Sponsorship
    Identification of Broadcast Material*, Public Notice, 40 F.C.C. 69,
    74 (1960) (addressing plugs and "sneaky" commercials, including
    product placement).

[^32]: Specifically, commercial television broadcast licensees and cable
    operators must limit the amount of commercial matter that airs
    during programs directed to children ages 12 and under to not more
    than 10.5 minutes per hour on weekends and not more than 12 minutes
    per hour on weekdays. *See* Children's Television Act of 1990, Pub.
    L. No. 101-437, 104 Stat. 996-1000, *codified at* 47 U.S. C. §§
    303b; 47 C.F.R. § 73.670; 47 C.F.R. § 76.255.

[^33]: These policies "directly addresses a fundamental regulatory
    concern, that children who have difficulty enough distinguishing
    program content from unrelated commercial matter, not be all the
    more confused by a show that interweaves program content and
    commercial matter." *See Policies and Rules Concerning Children's
    Television Programming*, Report and Order, 6 FCC Rcd 2111, 2118
    (1991), *recon. granted in part*, 6 FCC Rcd 5093 (1991)
    ("*Children's Television Programming*").

[^34]: *See*, *e.g*., *Children's Television Programming*, 6 FCC Rcd at
    2117-8.

[^35]: *See id.* at 2118.

[^36]: *See* 47 C.F.R. § 73.670 (a).

[^37]: *See Children's Television Programming,* 6 FCC Rcd at 2118
    (citing *Weigel Broadcasting Company*, 41 F.C.C. 2d 370 (1973)
    (eight-minute segment inviting viewers to contact sponsor about
    entering chinchilla ranching business in half-hour program on
    chinchilla ranching). In addition, the host-selling rule prohibits
    "program talent or other identifiable program \[characters\]" from
    delivering any commercial pitches during a program. *See Policies
    and Rules Concerning Children's Television Programming*, Order on
    Reconsideration, 6 FCC Rcd at 5097.

[^38]: *See* Commercial Alert Petition at 3-4. Commercial Alert also
    filed this petition with the Federal Trade Commission (FTC),
    alleging that product placement without full disclosure constitutes
    an unfair and deceptive practice in violation of Section 5 of the
    Federal Trade Commission Act. In its response, the FTC stated that
    the complaint "does not suggest that product placement results in
    consumers giving more credence to objective claims about the
    product's attributes," or sufficiently show that the product
    placement involves "false or misleading objective, material claims
    about the product's attributes. . . ." *See* Letter from Mary K.
    Engle, Associate Director for Advertising Practices, Federal Trade
    Commission, to Gary Ruskin, Executive Director, Commercial Alert
    (February 10, 2005). Similarly, in 1991, the Center for the Study of
    Commercialism filed a complaint and a request for investigation and
    rulemaking with the FTC regarding product placements in motion
    pictures, alleging that product placement was an unfair and
    deceptive trade practice in violation of Section 5 of the Federal
    Trade Commission Act as amended, 15 U.S.C. § 45. *See In the Matter
    of Unfair and Deceptive Acts and Practices in the Placement of
    Product Advertisements in Motion Pictures*, Docket No. P914518,
    209-59, 1991 WL 640030 (May 30, 1991). The FTC denied the petition
    by letter, stating that because of an "apparent lack of a pervasive
    pattern of deception and substantial consumer injury attributable to
    product placements," a rulemaking was not warranted. *See* Press
    Release, FTC, FTC Denies Center for the Study of Commercialism\'s
    Petition to Promulgate Rule on Product Placement in Movies, (Dec.
    11, 1992), available at
    <http://www.ftc.gov/opa/predawn/F93/csc-petit5.htm>.

[^39]: *Id*. at 11.

[^40]: *Id*.

[^41]: *Id*.

[^42]: *See* Comments of the Washington Legal Foundation to the Federal
    Communications Commission Concerning Television Product Placement
    (April 6, 2004) at 6-7 ("Comments of Washington Legal Foundation");
    Opposition to Petition for Rulemaking related to Disclosure of
    Product Placement on Television filed by Freedom to Advertise
    Coalition (November 12, 2003) at 5 ("Comments of Freedom to
    Advertise Coalition").

[^43]: *See* Comments of Washington Legal Foundation at 6. Because
    product placements add to the realism of programming, asserts WLF, a
    concurrent disclosure requirement would "destroy the artistic
    integrity of any programming containing such speech, and would be a
    nuisance to the viewer." *Id*. at 3. WLF also argues that product
    placement and/or integration is harmless, and that the petition
    fails to distinguish the current embedded advertising practices from
    those occurring in the 1950s and 1960s. *Id.* at 3 & 5.

[^44]: *See* Comments of Washington Legal Foundation at 7.

[^45]: *Id*.

[^46]: *See* Comments of Freedom to Advertise Coalition at 5.

[^47]: 447 U.S. 557 (1980). Under this four-part analysis, the court
    initially determines whether the commercial speech involves unlawful
    activity or is misleading and thus not protected under the First
    Amendment; if the commercial speech is not misleading or unlawful,
    then the court applies an intermediate level of scrutiny, analyzing
    whether the government has a substantial interest; whether the
    regulatory policy directly and materially advances that interest;
    and whether the regulatory policy is no more extensive than
    necessary to serve that interest. *Id*. at 566.

[^48]: Comments of Freedom to Advertise Coalition at 6.

[^49]: *See Entertainment Guilds Call for Industry Code of Conduct or
    FCC Regulation for Product Integration in Programming and Film;
    Guilds Issue White Paper Report on the Runaway Use of Stealth
    Advertising in Television and Film*, November 14, 2005, *available
    at* <http://www.wga.org/subpage_newsevents.aspx?id=1422>. *See also
    Writer's Guild White Paper* at 8.

[^50]: *See id*.

[^51]: *See Digital Future of the United States, Part V: the Future of
    Video, Testimony of Philip Rosenthal*, May 10, 2007, *available at*
    <http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.051007.Rosenthal-testimony.pdf>.

[^52]: Comments of Patric Verrone, President, Writers Guild of America,
    West, at Chicago, Illinios, Public Hearing on Media Ownership
    (September 20, 2007) at 218-23.

[^53]: *See Inquiry Into Hidden Commercials In Recorded "Interview"
    Programs*, Public Notice, 40 F.C.C. 81 (1960). In its petition,
    Commercial Alert stresses that more recently, several pharmaceutical
    companies have used paid spokespersons to promote certain drugs,
    "often without disclosing that they were paid by pharmaceutical
    companies, or had other financial ties to them." *See* Commercial
    Alert Petition at 5.

[^54]: *See* 47 C.F.R. § 73.1212(f).

[^55]: *See* Commercial Alert Petition at 4.

[^56]: *Id*.

[^57]: *See* *Writer's Guild White Paper* at 8. We note that in a 1991
    Report and Order, the Commission adopted a rule requiring both audio
    and video sponsorship identification for television political
    advertisements. *In the matter of Codification of the Commission's
    Political Programming Policies*, 7 FCC Rcd 678 (1991). However, as
    part of the same proceeding, in response to petitions for
    reconsideration addressing these requirements, the Commission
    subsequently eliminated the audio identification (agreeing with
    petitioners that this requirement was unduly burdensome to
    candidates, particularly for short spot announcements) and set forth
    the specific standards for video sponsorship identification
    currently in effect. 7 FCC Rcd 1616 (1992).

[^58]: *See* Commercial Alert Petition at 4.

[^59]: *In the Matter of Amendment of Sections 3.119, 3.289, 3.654 and
    3.789 of the Commission's Rules,* Report and Order, 34 F.C.C. 829,
    841 (1963).

[^60]: *See* 47 C.F.R. § 73.1212(h).

[^61]: *See* *In the matter of Codification of the Commission's
    Political Programming Policies,* Opinion and Order, 7 FCC Rcd 1616
    (1992).

[^62]: *See Application of Sponsorship Identification Rules to Political
    Broadcasts, Teaser Announcements, Governmental Entities and Other
    Organizations*, Public Notice, 66 F.C.C. 2d 302 (1977). We note that
    the sponsorship identification announcement must state \"paid for,\"
    \"sponsored by,\" or \"furnished by\" and by whom the consideration
    was supplied.\"  47 C.F.R. §§ 73.1212(a)(1) and (a)(2).

[^63]: 47 C.F.R. § 73.1212(a)(2)(ii).

[^64]: 47 C.F.R. 73.1212 (d).

[^65]: *See* *Writer's Guild White Paper* at 8 (proposing "strict limits
    on the usage of product integration in children's programming.").

[^66]: As noted above, the Commission requires broadcasters to use
    separations or "bumpers" between programming and commercials during
    children's programming: "The separation policy is an attempt to aid
    children in distinguishing advertising from program material. It
    requires that broadcasters separate the two types of content by use
    of special measures such as 'bumpers' (e.g., 'And now it\'s time for
    a commercial break,' 'And now back to the \[title of the
    program\]')." *Policies and Rules Concerning Children\'s Television
    Programming*, 6 FCC Rcd 2111, 2127 n. 147 (1991), recon. granted in
    part, 6 FCC Rcd 5093 (1991).

[^67]: *See Entertainment Guilds Call for Industry Code of Conduct or
    FCC Regulation for Product Integration in Programming and Film;
    Guilds Issue White Paper Report on the Runaway Use of Stealth
    Advertising in Television and Film*, November 14, 2005, *available
    at*  <http://www.wga.org/subpage_newsevents.aspx?id=1422>.  *See
    also Writer's Guild White Paper* at 8.

[^68]: 47 C.F.R. § 76.5(p). *See also Amendment of the Commission\'s
    Sponsorship Identification Rules (Sections 73.119, 73.289, 73.654,
    73.789 and 76.221)*, Report and Order, 52 F.C.C.2d 701, 712 (1975)
    ("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.").

[^69]: *See* 47 C.F.R. § 73.1212 (no announcement required "when it is
    clear that the mention of the product constitutes a sponsorship
    identification"). 

[^70]: *See* 5 U.S.C. § 603.

[^71]: *See* 47 C.F.R. § 1.1206(b); *see also* 47 C.F.R. §§ 1.1202,
    1.1203.

[^72]: *See* 47 C.F.R. § 1.1206(b)(2).

[^73]: The RFA, *see* 5 U.S.C. §§ 601 -- 612, has been amended by the
    Small Business Regulatory Enforcement Fairness Act of 1996
    ("SBREFA"), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).

[^74]: *See* 5 U.S.C. § 603.

[^75]: *See* 5 U.S.C. § 603(a).

[^76]: *Id.*

[^77]: U.S. Census Bureau, 2002 NAICS Definitions, "515120 Television
    Broadcasting" (partial definition);
    <http://www.census.gov/epcd/naics02/def/NDEF515.HTM>.

[^78]: 13 C.F.R. § 121.201, NAICS code 515120.

[^79]: *See FCC News Release*, "Broadcast Station Totals as of December
    31, 2007," dated March 18, 2008;
    <http://fjallfoss.fcc.gov/edocs_public/attachmatch/DOC-280836A1.pdf>.

[^80]: We recognize that BIA's estimate differs slightly from the FCC
    total given *supra*.

[^81]: "\[Business concerns\] are affiliates of each other when one
    concern controls or has power to control the other or a third party
    or parties controls or has power to control both." 13 C.F.R. §
    21.103(a)(1).

[^82]: *See FCC News Release*, "Broadcast Station Totals as of December
    31, 2007," dated March 18, 2008;
    <http://fjallfoss.fcc.gov/edocs_public/attachmatch/DOC-280836A1.pdf>.

[^83]: *See generally* 5 U.S.C. § 601(4), (6).

[^84]: *See FCC News Release*, "Broadcast Station Totals as of December
    31, 2007," dated March 18, 2008;
    <http://fjallfoss.fcc.gov/edocs_public/attachmatch/DOC-280836A1.pdf>.

[^85]: U.S. Census Bureau, 2007 NAICS Definitions, "517110 Wired
    Telecommunications Carriers" (partial definition);
    <http://www.census.gov/naics/2007/def/ND517110.HTM#N517110>.

[^86]: 13 C.FR. § 121.201, NAICS code 517110.

[^87]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, Table 4, Receipts Size of Firms for the United States:
    2002, NAIC code 517510 (issued November 2005).

[^88]: *Id*. An additional 61 firms had annual receipts of 25 million or
    more.

[^89]: 47 C.F.R. § 76.901(e). The Commission determined that this size
    standard equates approximately to a size standard of \$100 million
    or less in annual revenues. *Implementation of Sections of the 1992
    Cable Act: Rate Regulation,* Sixth Report and Order and Eleventh
    Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).

[^90]: These data are derived from: R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^91]: 47 C.F.R. § 76.901(c).

[^92]: Warren Communications News, *Television & Cable Factbook 2006*,
    "U.S. Cable Systems by Subscriber Size," page F-2 (data current as
    of Oct. 2005). The data do not include 718 systems for which
    classifying data were not available.

[^93]: 47 U.S.C. § 543(m)(2); *see* 47 C.F.R. § 76.901(f) & nn. 1-3.

[^94]: 47 C.F.R. § 76.901(f); *see* Public Notice*, FCC Announces New
    Subscriber Count for the Definition of Small Cable Operator*, DA
    01‑158 (Cable Services Bureau, Jan. 24, 2001).

[^95]: These data are derived from: R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^96]: The Commission does receive such information on a case-by-case
    basis if a cable operator appeals a local franchise authority's
    finding that the operator does not qualify as a small cable operator
    pursuant to § 76.901(f) of the Commission's rules. *See* 47 C.F.R. §
    76.909(b).

[^97]: *See* 13 C.F.R. § 121.201, 2007 NAICS Code 515112.

[^98]: *Id*.

[^99]: *Id*.

[^100]: *Id*.

[^101]: *Id*.

[^102]: *See* para. 3 of IRFA.

[^103]: Remarks of Commissioner Jonathan S. Adelstein, "Stuck in the
    Mud: Time to Move an Agenda to Protect America's Children," June 11,
    2008.
    <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-282885A1.pdf>

[^104]: Remarks of Commissioner Jonathan S. Adelstein, "Fresh is Not as
    Fresh as Frozen:\" A Response to the Commercialization of American
    Media," May 25, 2005.
    <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-258962A1.pdf>

[^105]: *See* Dale Kunkel, "Children and Television Advertising,"
    *Handbook of Children and the Media,* ed. Dorothy G. Singer & Jerome
    L. Singer (Thousand Oaks, CA: Sage Publications, 2001): 375-393.

[^106]: *Id.*

[^107]: Comm. On Food Mktg. & the Diets of Children & Youth, Inst. Of
    Med., Food Marketing to Children and Youth: Threat or Opportunity?
    145 (J. Michael McGinnis et al. eds., The National Academies Press
    2006), available at
    http://www.nap.edu/books/0309097134/html/R1.html.

[^108]: *See* Kaiser Family Foundation, *The Role of Media in Childhood
    Obesity* (Menlo Park: Kaiser Family Foundation, 2004),
    http://www.kff.org/entmedia/loader.cfm?url=/commonspot/security/
    getfile.cfm&PageID=32022, generated April 4, 2005.

[^109]: *See* Angela J. Campbell, *Food Marketing to Children and the
    Law*. 39 L[oy]{.smallcaps}. L.A. L. R[ev]{.smallcaps}. 447, 465
    (2006).

[^110]: 47 CFR 73.1212(e)

[^111]: Amy Schatz, *Product Placements Get FCC Scrutiny*, W[all St.
    J.,]{.smallcaps} June 23, 2008, at B3.

[^112]: *See* Writers Guild of America, Are You Selling to Me?: Stealth
    Advertising in the Entertainment Industry (2005).

[^113]: *See* Ellen P. Goodman, *Stealth Marketing and Editorial
    Integrity*. 85 [Tex.]{.smallcaps} L. R[ev]{.smallcaps}. 83, 125
    (2006).