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[Senate Report 109-210]
[From the U.S. Government Publishing Office]

109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-210
_______________________________________________________________________

                                     

                                                       Calendar No. 352

                   TRUTH IN BROADCASTING ACT OF 2005

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 967

DATE deg.December 20, 2005.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred ninth congress
                             first session

                     TED STEVENS, Alaska, Chairman
                 DANIEL K. INOUYE, Hawaii, Co-Chairman
JOHN McCAIN, Arizona                 JOHN D. ROCKEFELLER IV, West 
CONRAD BURNS, Montana                    Virginia
TRENT LOTT, Mississippi              JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas          BYRON L. DORGAN, North Dakota
OLYMPIA J. SNOWE, Maine              BARBARA BOXER, California
GORDON H. SMITH, Oregon              BILL NELSON, Florida
JOHN ENSIGN, Nevada                  MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               FRANK LAUTENBERG, New Jersey
JOHN E. SUNUNU, New Hampshire        E. BENJAMIN NELSON, Nebraska
JIM DeMINT, South Carolina           MARK PRYOR, Arkansas
DAVID VITTER, Louisiana
                    Lisa Sutherland, Staff Director
             Christine Drager Kurth, Deputy Staff Director
                      David Russell, Chief Counsel
     Margaret Cummisky, Democratic Staff Director and Chief Counsel
 Samuel Whitehorn, Democratic Deputy Staff Director and General Counsel

                                                       Calendar No. 352
109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-210

======================================================================

 
                   TRUTH IN BROADCASTING ACT OF 2005

                                _______
                                

               December 20, 2005.--Ordered to be printed

                                _______
                                

       Mr. Stevens, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 967]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill joint resolution deg. (S. 
H.R. deg. 967) TITLE deg. to amend the 
Communications Act of 1934 to ensure that prepackaged news 
stories contain announcements that inform viewers that the 
information within was provided by the United States 
Government, and for other purposes, having considered the same, 
reports favorably thereon without amendment deg. 
with amendments deg. with an amendment (in the nature 
of a substitute) and recommends that the bill joint 
resolution deg. (as amended) do pass.

                          Purpose of the Bill

    The purpose of S. 967 is to amend the Communications Act of 
1934 to ensure that Federal Government-produced prepackaged 
news stories contain announcements that inform viewers that the 
information within was provided by the United States 
Government. The bill will require Federal agencies to provide, 
within the text or audio of any prepackaged news story prepared 
or produced by that Federal agency and intended for broadcast 
or video distribution in the United States, clear notice that 
such story was produced by the Federal Government. In turn, 
broadcasters, cable and satellite companies would be allowed to 
remove or modify such notices only in circumstances to be 
determined by the Federal Communications Commission. However, 
broadcasters, cable and satellite companies that only utilize 
government ``B-roll'' or segments of a video news release 
within their own creative work product are not subject to the 
disclosure requirements of this bill. The disclosure 
requirements are limited to the broadcast or video distribution 
of complete, ready-to-use audio or video news segments produced 
by the government. The bill, as amended, provides that nothing 
in the legislation shall be construed to apply to any lawful 
and authorized intelligence activity of the United States 
Government.

                          Background and Needs

    Prepackaged news stories are ready-to-use, complete audio 
or video news segments designed to fit seamlessly into a 
private broadcast. They are essentially the radio or television 
equivalent of a government press release. Video prepackaged 
news stories, known as video news releases (VNRs), have been 
used for decades by both Democratic and Republican 
administrations to communicate with the public. Since 1951, 
language in yearly appropriations laws has required that 
Federal agencies not conceal the government origin of VNRs. 
Specifically, appropriations laws have prohibited the use of 
Federal funds for covert ``publicity or propaganda'' unless 
otherwise authorized by Congress. The provisions included in 
appropriations laws are temporary, year-long prohibitions that 
expire when the appropriations laws expire.
    On May 11, 2005, President Bush signed the Emergency 
Supplemental Appropriations Act For Defense, The Global War On 
Terror, And Tsunami Relief, 2005, P.L. 109-13 (Defense 
Supplemental). A provision in that law required Federal 
agencies to disclose the government origin of prepackaged news 
stories. Specifically, section 6002 of the Defense Supplemental 
provided that, unless otherwise authorized, none of the 
appropriated funds may be used by an executive branch agency to 
produce any prepackaged news story intended for broadcast or 
distribution in the United States unless the story includes a 
clear notification within the text or audio of the prepackaged 
news story that the prepackaged news story was prepared or 
funded by that executive branch agency.
    On May 12, 2005, the Commerce Committee held a hearing on 
prepackaged news stories. In that hearing, witnesses 
representing the broadcast and news distribution industry 
expressed concern that S. 967 as originally introduced might be 
unnecessary in light of long-standing, self-imposed ethical 
guidelines concerning the attribution of third-party sources. 
Moreover, the Federal Communications Commission clarified, in a 
Public Notice released in April 2005, that disclosure of third 
party sources was already required under its rules in certain 
circumstances.
    The Defense Supplemental expired on September 30, 2005. 
That same day, the Government Accountability Office released a 
report criticizing the administration for its use of VNRs 
without clearly notifying the public of their government 
origins. Specifically, the GAO found that since prepackaged 
news stories are purposefully designed to be indistinguishable 
from news segments broadcast to the public, their broadcast 
without attribution to the government makes them no longer 
purely factual.
    During consideration of S. 967 in Committee, Senator 
Stevens offered a substitute amendment that would impose a 
disclosure duty on Federal agencies preparing or funding 
prepackaged news stories. The substitute amendment is closer to 
the prohibition in section 6002 of the Defense Supplemental 
than the provisions of S. 967. The substitute requires 
government agencies to provide noticewithin prepackaged news 
stories (including VNRs) intended for broadcast or video distribution 
within the United States. It also directs the FCC to determine under 
what circumstances broadcasters, cable and satellite television 
companies should be allowed to remove or modify the notices placed in 
prepackaged news stories by or on behalf of the Federal agency 
preparing or funding them. Senator Lautenberg's second degree amendment 
would provide that the new provisions shall not apply to any lawful and 
authorized intelligence activity of the United States Government.

                         Summary of Provisions

    S. 967, the Prepackaged News Story Announcement Act, amends 
the Communications Act to require prepackaged news stories 
produced or funded by, or on behalf of, the Federal Government 
to contain a clear disclosure of such stories' government 
origins. The bill, as amended, further provides that the 
circumstances under which such disclosure may be removed are to 
be determined by the Federal Communications Commission. As 
explained in the definitions section, the legislation applies 
only to a prepackaged news story, not to other individual 
segments contained in a video news release. The bill further 
provides that nothing in the legislation shall be construed to 
apply to any lawful and authorized intelligence activity of the 
United States Government.
    Section 1 contains the short title of the bill, the 
``Prepackaged News Story Announcement Act of 2005.''
    Section 2 amends the Communications Act of 1934, by 
inserting a new Section 342, ``Announcement of United States 
Government Sponsorship of a Prepackaged News Story.''
    The new subsection 342(a) requires prepackaged news stories 
produced by or on behalf of a Federal agency and intended for 
broadcast over the air, or distribution by a ``multichannel 
video programming distributor,'' within the United States to 
clearly notify the audience that the story was prepared or 
funded by the Federal Government. The notice required by 
subsection 342(a) must be contained within the text or audio of 
the story broadcast or distributed.
    The new subsection 342(b) tasks the Federal Communications 
Commission with promulgating rules governing the circumstances 
under which broadcasters or multichannel video programming 
distributors may remove or modify the notification required by 
subsection 342(a).
    The new subsection 342(c) defines the term ``prepackaged 
news story'' as a complete, ready-to-use audio or video news 
segment designed to be indistinguishable from a news segment 
produced by an independent news organization. It also defines 
``multichannel video programming distributor'' to have the 
meaning given that term by section 602(13) of the 
Communications Act of 1934, a meaning that encompasses cable 
television and satellite television providers.
    The new subsection 342(d) exempts from the new law any 
lawful and authorized intelligence activity of the United 
States Government.

                          Legislative History

    The ``Truth in Broadcasting Act of 2005'' (S. 967) was 
introduced by Senator Lautenberg on April 28, 2005 and referred 
to the Senate Committee on Commerce, Science, and 
Transportation. There are nine cosponsors of S. 967, including 
six original cosponsors. The original six cosponsors are 
Senators Kerry, Clinton, Kennedy, Dorgan, Boxer, and Dayton. 
The other cosponsors are Senators Akaka, Feingold, and Corzine. 
On October 20, 2005, the Committee considered the bill in an 
open Executive Session. Senator Stevens offered a manager's 
amendment in the nature of a substitute, and Mr. Lautenberg 
offered an amendment to Senator Stevens' substitute. Mr. 
Lautenberg's amendment clarified that the requirements of S. 
967 would not apply to lawful and authorized intelligence 
activities of the United States Government. The Committee, 
without objection, adopted both amendments and ordered that S. 
967, with the new short title ``Prepackaged News Story 
Announcement Act of 2005,'' be reported with the amendments.

                            Estimated Costs

    In compliance with subsection (a)(3) of paragraph 
11 of rule XXVI of the Standing Rules of the Senate, the 
Committee states that, in its opinion, it is necessary to 
dispense with the requirements of paragraphs (1) and (2) of 
that subsection in order to expedite the business of the 
Senate. deg.
    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                                  November 2, 2005.
Hon. Ted Stevens,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 967, the Prepackaged 
News Story Announcement Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                               Douglas Holtz-Eakin.
    Enclosure.

S. 967--Prepackaged News Story Announcement of Act of 2005

    CBO estimates that enacting S. 967 would have no 
significant impact on the federal budget. Enacting the bill 
would not affect direct spending or revenues. S. 967 contains 
no intergovernmental or private-sector mandates as defined in 
the Unfunded Mandates Reform Act and would not affect the 
budgets of state, local, or tribal governments.
    S. 967 would amend the Communications Act of 1934 to 
prohibit federal agencies from producing prepackaged news 
stories without disclaimers that identify the government as the 
source. A prepackaged news story is a complete, ready-to-use 
news item designed to be indistinguishable from a news story 
produced by an independent author or news organization. In 
addition, the legislation would require the Federal 
Communications Commission to promulgate rules governing when 
the government disclaimers can be modified or removed.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

    The Federal Communications Commission may issue regulations 
to implement the requirement set forth in the reported bill 
that announcements be included in broadcasts and video 
distributions by parties subject to the Commission's 
jurisdiction. The reported bill also requires the Federal 
Communications Commission to determine the circumstances in 
which the announcements required by the legislation may be 
removed or modified. The Commission would be required to 
develop regulations to implement these requirements, so 
individuals or businesses that broadcast radio or television 
programs, or distribute video programming, that is subject to 
the legislation would become subject to new or modified 
regulations.

                            ECONOMIC IMPACT

    S. 967 would not have an adverse economic impact on the 
nation's economy. The Act would require that prepackaged news 
stories contain announcements that inform audiences that the 
information within was prepared or funded by the United States 
Government.

                                PRIVACY

    The reported bill would have no impact on the personal 
privacy of U.S. citizens.

                               PAPERWORK

    The reported bill should not significantly increase 
paperwork requirements for individuals and businesses.

                      Section-by-Section Analysis

Section 1. Short title

    Section 1 would establish the short title of the bill as 
the ``Prepackaged News Story Announcement Act of 2005.''

Section 2. Prepackaged news story announcements

    This section would amend the Communications Act of 1934 by 
adding a new section 342 to the end of Title III.
    A new section 342(a) would require Federal agencies to 
include a disclosure within any government prepackaged news 
story that is intended for broadcast or video distribution 
within the United States, by a broadcaster, or cable or 
satellite company, that such prepackaged news story was 
prepared or funded by the United States Government.
    A new section 342(b) would require the Federal 
Communications Commission to promulgate rules on the 
circumstances under which the announcement required under the 
new Section 342(a) may be removed or modified.
    A new section 342(c) would set forth the definitions used 
in the bill. This subsection defines ``prepackaged news story'' 
as a complete, ready-to-use audio or video news segment 
designed to be indistinguishable from a news segment produced 
by an independent news organization. It also defines 
``multichannel video programming distributor'' as having the 
meaning set forth in Section 602(13) of the Communications Act 
of 1934 (47 U.S.C. 522(13)).
    A new section 342(d) would provide that nothing in S. 967 
shall be construed to apply to prepackaged news broadcast or 
distributed outside the United States with respect to 
activities to which Title V of the National Security Act of 
1947 relate.

        ADDITIONAL VIEWS OF SENATOR LAUTENBERG AND SENATOR KERRY

    This legislation makes it clear that the Federal Government 
has the legal obligation to identify itself as the source of 
prepackaged news stories it has funded or prepared. This law is 
necessary to resolve a disagreement between the Government 
Accountability Office (GAO) and the Administration on 
disclosure requirements when the Federal Government funds or 
prepares prepackaged news stories.
    On May 19, 2004, GAO ruled that Medicare prepackaged news 
stories produced and distributed by the Department of Health 
and Human Services (HHS) were illegal covert propaganda because 
they did not identify HHS as the source of the news story. On 
January 4, 2005, GAO ruled that unattributed prepackaged news 
stories produced and distributed by the Office of National Drug 
Control Policy (ONDCP) were illegal covert propaganda. In both 
cases, GAO found that the misuse of appropriate funds were also 
a violation of the Antideficiency Act (31 U.S.C. 1341), which 
prohibits expenditures that exceed budget authority, because no 
appropriations are available for illegal covert propaganda.
    In each case, GAO distinguished a video news release (VNR) 
from a prepackaged news story (which is often just one segment 
of a VNR). A full VNR may include a prepackaged news story, 
video clips or ``B-roll,'' and ``slates'' or ``slides'' with 
information on the agency or the program in question, as well 
as other promotional materials. GAO took issue specifically 
with the prepackaged news stories within the larger VNR.
    On February 17, 2005, GAO sent a memo to all Federal 
agencies instructing them to identify themselves in all 
prepackaged news stories. Then, on March 11, 2005, the Office 
of Management and Budget (OMB) and the Department of Justice 
(DOJ) sent a memo to all Federal agencies telling them to 
ignore the directives in the GAO memo, claiming that agencies 
do not need to identify the Government as the source of 
prepackaged news stories.
    On May 11, 2005, a provision in the Emergency Supplemental 
Appropriations Act for Defense, The Global War on Terror, And 
Tsunami Relief, 2005, P.L. 109-13 (Defense Supplemental) 
imposed a requirement that a prepackaged news story prepared or 
funded by a Federal agency include a clear notification that 
the agency was the source of the story.
    The Defense Supplemental expired on September 30, 2005. 
That same day, the Government Accountability Office (GAO) 
released a report finding that Department of Education 
prepackaged news stories promoting the Administration's ``No 
Child Left Behind'' program were illegal covert propaganda. 
This was the third such ruling by the GAO against the use of 
Government funds for ``covert propaganda'' since May 2004. As 
with the previous two violations, GAO also found this misuse of 
appropriated funds to be a violation of the Antideficiency Act. 
However, as was the case with the other two GAO legal 
decisions, the Administration rejected the legal findings.
    It is in this context that legislation is necessary to 
permanently require a clear notification within a prepackaged 
news story produced by or on behalf of a Federal agency that 
the story was prepared or funded by the United States 
Government.
                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

                      TITLE 47, UNITED STATE CODE

           Subtitle III. Special Provisions Relating to Radio

                       Part I. General Provisions

SEC. ANNOUNCEMENT OF UNITED STATES GOVERNMENT SPONSORSHIP OF A 
                    PREPACKAGED NEWS STORY.

      (a) Disclaimer Required.--Any prepackaged news story 
produced by or on behalf of a Federal agency and intended for 
broadcast over the air or distribution by a multichannel video 
programming distributor within the United States shall contain 
a clear notification within the text or audio of the 
prepackaged news story that the prepackaged news story was 
prepared or funded by the United States Government.
      (b) Removal of Disclaimer.--The Commission shall 
promulgate rules governing the circumstances under which 
broadcasters or multichannel video programming distributors may 
remove or modify the announcement required under subsection 
(a).
      (c) Definitions.--In this section:
            (1) Prepackaged news story.--The term ``prepackaged 
        news story'' means a complete, ready-to-use audio or 
        video news segment designed to be indistinguishable 
        from a news segment produced by an independent news 
        organization.
            (2) Multichannel video programming distributor.--
        The term ``multichannel video programming distributor'' 
        has the meaning given that term by section 602(13).
      (d) Intelligence Activities.--Nothing in this section 
shall be construed to apply to any lawful and authorized 
intelligence activity of the United States Government.

                                  
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