![](media/image1.wmf){width="1.1in" height="1.05in"}**FEDERAL
COMMUNICATIONS COMMISSION**

Washington, D.C. 20554

**Adopted:** December 20, 2000

**Released:** December 22, 2000

In Reply Refer to:

EB-00-IH-0078

EB-00-IH-0135/0136/0137/0138

CMW

Thomas W. Dean, Esq.

Litigation Director

NORML Foundation

1001 Connecticut Ave., N.W.

Suite 710

Washington, D.C. 20036

Dear Mr. Dean:

This letter terminates the Enforcement Bureau's investigation of
NORML[^1] Foundation's February 17, 2000, complaint against ABC
Television Network ("ABC"), CBS Corporation ("CBS"),[^2] National
Broadcasting Company, Inc. ("NBC"); Fox Broadcasting Company, Inc.
("Fox"), and The WB Television Network ("WB") (collectively, the
"Networks"). NORML alleges that the Networks entered into agreements
with the Office of National Drug Control Policy ("ONDCP"), whereby the
Networks received compensation from the ONDCP in return for airing
programming that contained anti-drug or anti-alcohol themes. NORML
further alleges that the Networks did not disclose such compensation in
violation of the sponsorship identification requirements of 47 U.S.C. §§
317 and 508, and 47 C.F.R. § 73.1211. The Enforcement Bureau issued
letters of inquiry to the Networks on April 18, 2000, and each network
filed a separate response. By letter dated, June 22, 2000, NORML filed a
consolidated reply to the Networks' responses. For the reasons set forth
below, we find no basis to take enforcement action.

**BACKGROUND**

In 1998, Congress passed legislation requiring the ONDCP to conduct a
national media campaign in an effort to reduce and prevent drug abuse by
young people in the United States. *See* 21 U.S.C. § 1801. The
legislation required that funds spent by the ONDCP on its national media
campaign must "be matched by an equal amount of non Federal funds for
the national media campaign, or be matched with in-kind contributions of
the same value." 21 U.S.C. § 1802(c).

As part of its National Anti-Drug Media Campaign, the ONDCP entered into
arrangements with the Networks, beginning in 1998 and continuing at
least as of the date of the Networks' responses, whereby the Networks
would be compensated for airing anti-drug/anti-alcohol messages. There
are apparently no written agreements between the ONDCP and the Networks.
Rather, the Networks' responses to our inquiries state that the
understandings were reached through numerous memorandums, letters,
e-mails, phone calls, meetings, and spot orders. In addition, the
ONDCP's expectations of the Networks are set forth in guidelines
entitled "Statement of Pro-Bono Match Program and Guidelines," "Pro Bono
Media Match Guidelines," and "ONDCP 'Match' Guidelines" (collectively
referred to as the "Guidelines"), copies of which were attached to the
responses submitted by CBS, NBC, and Fox. These Guidelines were revised
periodically and apparently distributed to the Networks.

At the outset, the ONDCP purchased advertising spots on each of the
Networks with the understanding that the Networks would "donate a
matching amount of media time and space." "Statement of Pro-Bono Match
Program and Guidelines," Executive Summary, Exhibit B to Fox response.
The ONDCP allowed the Networks to obtain matching credit for the
broadcast of public service announcements ("PSAs") provided by the
ONDCP; the broadcast of programs containing story lines depicting the
consequences of drug or alcohol abuse; and for undertaking other
non-broadcast community initiatives designed to educate young people
about the negative consequences of drug and alcohol use. The Networks
were required to satisfy at least 51% of their matching obligations by
the broadcast of PSAs, but were free to determine how to satisfy the
remaining matching obligations, within the parameters outlined in the
Guidelines. All five of the Networks chose to satisfy part of their
matching obligations by broadcasting programming with anti-drug or
anti-alcohol themes.

**DISCUSSION**

Section 317(a)(1) of the Act provides, in pertinent part, that:

> 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.

47 U.S.C. § 317(a)(1).

Similarly, Section 73.1212(a) of the Commission's rules provides:

> When a broadcast station transmits any matter for which money,
> service, or other valuable consideration is either directly or
> indirectly paid or promised to, or charged or accepted by such
> station, the station, at the time of the broadcast, shall announce:
>
> \(1\) That such matter is sponsored, paid for, or furnished, either in
> whole or in part, and
>
> \(2\) By whom or on whose behalf such consideration was supplied ...

47 C.F.R. § 73.1212.

Section 507 of the Act requires both producers and suppliers of programs
to report the receipt of any such consideration to the licensee or
licensees over whose facilities the program is to be broadcast. 47
U.S.C. § 508(b). Moreover, in cases where such disclosure is made,
appropriate sponsorship identification is required. 47 U.S.C. § 317(b).

Sponsorship identification requirements were first imposed upon
broadcasters by the Radio Act of 1927 and the basic purpose of such
requirements has not changed since that time: "listeners \[and viewers\]
are entitled to know by whom they are being persuaded." *Applicability
of Sponsorship Identification Rules*, 40 FCC 141 (1963), *as modified*,
40 Fed Reg. 41936 (September 9, 1975).[^3] Thus, the audience must "be
clearly informed that it is hearing or viewing matter which has been
paid for, when such is the case, . . . and the person paying for the
broadcast of matter \[must\] be clearly identified." *Midwest
Radio-Television, Inc.*, 49 FCC 2d 512, 515 (1974), *citing National
Broadcasting Company* 27 FCC 2d 75 (1970). The language of the statute
is very broad, requiring sponsorship identification if any type of
valuable consideration is directly or indirectly paid or promised,
charged or accepted. The Commission has consistently upheld these strict
identification requirements. *Universal Broadcasting Co. of
Minneapolis-St. Paul, Inc.*, 51 FCC 2d 597, 602 (1975), *forfeiture
reduced*, 58 FCC 2d 1367 (1976), *citing Sponsorship Identification
Rules*, 34 FCC 829, 894 (1963) (The Commission's "strict identification
requirements" should not be relaxed because "\[p\]aramount to an
informed opinion and wisdom of choice . . . is the public's need to know
the identity of those persons or groups who elicit the public's
support.").

NORML asserts that the ONDCP "used financial incentives to get
television networks to work anti-drug messages into the scripts of some
popular TV shows." NORML complaint at 2. NORML contends that the public
has a right to know that the Networks' programming is being influenced
by the ONDCP and that the failure to disclose such information violates
the Commission's sponsorship identification requirements.

The Networks claim that the broadcast of programming with
anti-drug/anti-alcohol themes did not require sponsorship
identification. WB argues that this case is similar to other situations
where the Commission found that sponsorship identification was not
required. Specifically, WB states that the Commission "has made clear
that no \[sponsorship identification\] announcement is required where a
government or private entity provides a press release to a broadcaster,
which uses editorial comment therefrom on a program; when a university
makes a professor available to give lectures on a broadcast program; or
when a bus company produces a scenic travel film which it provides for
free, even if one of its busses is fleetingly shown." WB response at 6,
*citing* *Applicability of Sponsorship Identification Rules*, 40 FCC 141
(1963), *as modified*, 40 Fed Reg. 41936 (September 9, 1975), referring
to examples 11, 19, and 26.

The Networks also argue that no sponsorship identification is required
because at the time the programs were broadcast they did not know
whether or not matching credit would be obtained, citing to *Metroplex
Communications, Inc. (WHYI-FM)*, 5 FCC Rcd 5610 (1990), *review denied
sub nom. Southeast Florida Broadcasting Limited Partnership v. FCC*, 947
F.2d 505 (D.C. Cir. 1991). In some cases the programs were submitted for
approval prior to broadcast, but in all cases, approval was not obtained
until after the original broadcast. Even those Networks that sought
ONDCP's "technical" advice with respect to the handling of certain
themes,[^4] claim that such discussions were completely separate from
the process by which matching credit was obtained. [^5] Additionally,
the Networks assert that they would have broadcast programs with such
themes even without their understanding with the ONDCP and, in fact,
that prior to reaching their understanding, they had aired such shows.
Finally, ABC, CBS, Fox, and WB argue that in some cases programs were
not awarded matching credit and that had they aired sponsorship
identification, it would have been misleading to the public.

NORML acknowledges the Networks' concern about airing sponsorship
identification prior to actually receiving the ONDCP's approval of
programs for credit. However, despite this issue, NORML, in paraphrasing
the statute, argues that sponsorship identification is required because
"certain matters were broadcast (anti-drug messages imbedded in program
content) for which valuable consideration (match credit) was indirectly
paid (by freeing up ad time to sell), promised (through the Guidelines),
charged (by submission by the networks of materials for credit) or
accepted (on numerous occasions), by the station so broadcasting (all of
the television networks in question), from a person (ONDCP) without any
announcement that such payment was made." NORML reply at 6. Moreover,
NORML contends that where the Networks submitted a script to the ONDCP
prior to the broadcast of a program, or where the Networks consulted
ONDCP as to the program content, the Networks had a "reasonable
expectation" that they would be given matching credit for the program.
Finally, NORML asserts that the Networks should have at least included
sponsorship identification messages when they rebroadcast programming
for which the ONDCP had already approved credit, especially if
additional credit was obtained for the rebroadcast.

There are two fundamental issues in this case. First, did the credit
that the Networks received toward satisfaction of matching obligations
constitute consideration for broadcasting programming with anti-drug and
anti-alcohol themes? Second, if so, was such consideration paid or
promised, charged or accepted, prior to the broadcast of the programming
at issue?

The Networks were obligated to donate a matching amount of media time
for every advertising spot purchased by the ONDCP. Thus, we find that
any credit toward that obligation that the Networks received for the
broadcast of programming with anti-drug and anti-alcohol themes
constitutes consideration. This case is clearly distinguishable from the
examples cited by WB, where the Commission found no consideration was
received. In all of the cited examples, the broadcast station received
material from an outside source, but aside from the provision of
material, did not receive any consideration for its broadcast. In this
case, the Networks actually received consideration for the broadcast of
the material at issue. Moreover, in all of the cited examples, the
Commission made clear that if consideration in addition to the provision
of service or property were provided, sponsorship identification would
be required. 40 Fed Reg. at 41938 at subheading D and n. 3.

We similarly reject the Networks' arguments that sponsorship
identification is not required because the Networks were broadcasting
anti-drug and anti-alcohol material prior to the establishment of the
ONDCP's National Anti-Drug Media Campaign in 1998. The Commission has
found that sponsorship identification is required even when the licensee
had previously broadcast similar programming without receiving
compensation.[^6] *See Waiver of Requirements of Section 317 of the
Communications Act Granted to State Broadcasters' Association in
Connection with NCSA Plans*, 45 FCC 2d 655, 656 (1974) (subsequent
history omitted) (sponsorship identification necessary despite the fact
that "contributing organizations had for many years received time,
announcements and similar cooperation from radio stations without regard
to any contribution made to the Association."). If compensation was paid
or promised, charged or accepted at the time of the broadcast,
sponsorship identification is required even if the station has
previously aired such programming without receiving compensation.

A more difficult issue presented in this case is whether or not at the
time of the original broadcast of a program, the consideration had been
paid or promised, charged or accepted. While there is no doubt that
there was an understanding between the Networks and the ONDCP, it is
difficult to find that such an understanding rose to the level of a
promise to compensate the Networks for the broadcast of specific program
material. Instead, at most, ONDCP promised that it might compensate the
Networks for programming that contained anti-drug or anti-alcohol
themes. The record indicates that compensation was never provided prior
to the original broadcast of a program. Moreover, while the Guidelines
provide insight as to what types of programming might be eligible for
compensation, the Guidelines are very subjective, providing only general
ideas as to the themes the ONDCP would consider appropriate for matching
credit. There is no certain guarantee of compensation. In fact, the
information before us reveals that in a significant number of cases, the
ONDCP rejected the Networks' submission of programming for matching
credit. Even where the Networks or program producers sought the ONDCP's
"technical advice," there does not appear to have been a promise of
compensation, notwithstanding the fact that the Networks' anticipation
of compensation may have been greater in such cases. In such
circumstances, we cannot find that the Networks violated our sponsorship
identification rule. Indeed, had the Networks indicated that they had
received consideration or a promise of consideration from the ONDCP in
connection with all the programs, the result for a not insignificant
number of the programs would have been to mislead the public into
believing the ONDCP was a sponsor when it was not. This would run
counter to the purpose of the rule. While the interest of providing full
information to the public might have been served by disclosure that
consideration from the ONDCP might be received in the future, we find
nothing in the statute or the rules requiring disclosure of such
possible future consideration.

Finally, we look to whether or not sponsorship identification was
required for the repeat broadcast of a program for which the Networks
already received matching credit. The facts before us reveal that the
Networks did broadcast repeat programs and did receive matching credit
for having done so, although usually at a lower percentage than the
original broadcast. The record is, however, unclear as to whether or not
the Networks had already received matching credit for the original
broadcasts at the time the repeat broadcasts were aired. To the extent
that credit had already been obtained for the original broadcasts and
the Networks were aware that they would be compensated for repeat
broadcasts, there was more than just a mere anticipation of possible
compensation. Thus, in those cases, sponsorship identification is
required and we caution the Networks to do so in the future. Given the
complexity of this situation, however, we do not believe that a sanction
is warranted for any repeat broadcast of programs that did not contain
appropriate sponsorship identification. The need to include sponsorship
identification in the repeat broadcasts was perhaps not clear to the
Networks, and certainly not clear to stations that broadcast network
programming (particularly those that are not owned by the Networks).

Accordingly, for the reasons set forth above, we will not take any
further enforcement action in response to NORML's complaint and we
consider this matter closed.

This action is taken under delegated authority pursuant to Sections
0.111 and 0.311 of the Commission's Rules, 47 C.F.R. §§ 0.111, 0.311.

Sincerely,

> David H. Solomon

Chief, Enforcement Bureau

cc: Mr. Franco Garcia, Executive Counsel, Corporate Legal Affairs, ABC,
Inc.

Mr. Martin D. Franks, Executive Vice President, CBS

Ms. Diane Zipursky, Vice President, Washington Law and Policy, NBC, Inc.

John C. Quale, Counsel for Fox Broadcasting Company, Inc.

Christopher G. Wood, Counsel for The WB Television Network

[^1]: NORML is an acronym for the National Organization for the Reform
    of Marijuana Laws.

[^2]: Subsequent to the filing of the complaint, CBS Corporation merged
    with Viacom, Inc., with Viacom becoming the surviving parent
    corporation. Since this matter involves CBS Television Network
    programming, for clarity we will refer to the company as CBS
    throughout this letter.

[^3]: *See also Loveday v. FCC*, 707 F.2d 1443 (D.C. Cir. 1983), *cert.
    denied*, 464 U.S. 1008 (1983), for a detailed discussion of the
    legislative history of sponsorship identification requirements.

[^4]: In two episodes, WB added a tag line to the program acknowledging
    that it received technical assistance from the ONDCP. Specifically,
    the tag line stated: "Technical Guidance Provided by the Office of
    National Drug Control Policy Education Branch." WB response at 5.
    Such a disclosure would not, however, satisfy any sponsorship
    identification requirement as it does not reveal that consideration
    was received for the broadcast of the program. *See Midwest
    Radio-Television, Inc.*, 49 FCC 2d 512 (1974).

[^5]: Exhibit D to the "Statement of Pro-Bono Match Program and
    Guidelines," April 21, 2000, states that the ONDCP's technical
    assistance and consultation services are "entirely separate from the
    Pro-Bono Match process and in no instance will people associated
    with the Strategic Message Review process be involved with providing
    technical assistance or consultation." See Exhibit B to Fox's
    response.

[^6]: ABC states that some of the programs for which it received
    matching credit were actually aired prior to the time it reached an
    understanding with ONDCP. Where the programs were broadcast prior to
    any understanding between ABC and the ONDCP regarding the National
    Anti-Drug Media Campaign, there is no question that sponsorship
    identification would not be required.