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                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 
NORML1 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.