**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,[^1] 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,[^2] 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.[^3] Given that the majority of
TV ads targeted to kids are for food products,[^4] and that the ad
industry spends more than \$10 billion per year in marketing food to
them,[^5] it is no surprise that studies have linked commercials to the
dramatic increases in childhood obesity and associated health problems
like diabetes.[^6] Because children are ill-equipped to identify
advertising, especially when it is embedded in a program with their
favorite character, [^7] 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**.**[^8] 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.[^9] 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.[^10] 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.[^11] 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]: 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>

[^2]: 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>

[^3]: *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.

[^4]: *Id.*

[^5]: 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.

[^6]: *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.

[^7]: *See* Angela J. Campbell, *Food Marketing to Children and the
    Law*. 39 L[oy]{.smallcaps}. L.A. L. R[ev]{.smallcaps}. 447, 465
    (2006).

[^8]: 47 CFR 73.1212(e)

[^9]: Amy Schatz, *Product Placements Get FCC Scrutiny*, W[all St.
    J.,]{.smallcaps} June 23, 2008, at B3.

[^10]: *See* Writers Guild of America, Are You Selling to Me?: Stealth
    Advertising in the Entertainment Industry (2005).

[^11]: *See* Ellen P. Goodman, *Stealth Marketing and Editorial
    Integrity*. 85 [Tex.]{.smallcaps} L. R[ev]{.smallcaps}. 83, 125
    (2006).