Source: https://www.fcc.gov/document/nprm-nce-stations-and-third-party-fundraising?fontsize=largeFont
Timestamp: 2015-09-03 23:39:14
Document Index: 240182646

Matched Legal Cases: ['§ 73', '§ 2', '§ 399', '§ 73', '§ 73', '§ 73']

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NPRM, NCE Stations and Third Party Fundraising
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FCC 12-43
Noncommercial Educational Station Fundraising )
for Third-Party Non-Profit Organizations
In this Notice of Proposed Rulemaking (“NPRM” or “Notice”), we solicit comment on whether and under what circumstances to allow noncommercial educational (“NCE”) broadcast stations to conduct on-air fundraising activities that interrupt regular programming for the benefit of third-party non-profit organizations. Under the Commission’s rules, in the absence of a waiver, an NCE station may not conduct fundraising activities to benefit any entity besides the station itself if the activities would substantially alter or suspend regular programming.1 The recent report on “The Information Needs of Communities” (“INC Report”) recommended that we consider affording noncommercial broadcasters more flexibility by allowing certain NCE stations to engage in fundraising for charities and other third-party non-profit organizations.2 This NPRM promotes the goals of Executive Order 13579 by analyzing whether the Commission’s longstanding policy against fundraising for third-party non-profits may be tailored to grant NCE stations limited flexibility without undermining the policy’s important goals.3
Under longstanding Commission policy, an NCE station may not conduct fundraising 1 See 47 C.F.R. §§ 73.503(d) and Note, 73.621(e) and Note; Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations, Second Report and Order, 86 FCC 2d 141, 157-58, ¶¶ 42-43 (1981) (“Second Report”), Memorandum Opinion and Order, 90 FCC 2d 895, 907, ¶ 20 (1982) (“Policy Statement”), recon. granted, Memorandum Opinion and Order, 97 FCC 2d 255, 264-65, ¶ 19 (1984) (“Reconsideration Order”). See also Ohio State Univ., 62 FCC 2d 449, 450 (1976).
2 See “The Information Needs of Communities: The Changing Media Landscape in a Broadband Age,” by Steven Waldman and the Working Group on Information Needs of Communities at 356 (June 2011), available at www.fcc.gov/infoneedsreport. 3 See Exec. Order No. 13,579, § 2, 76 Fed. Reg. 41,587 (July 11, 2011); Preliminary Plan for Retrospective Analysis of Existing Rules, 2011 WL 5387696 (Nov. 7, 2011). Pursuant to Executive Order 13579, the Commission analyzes rules that may be outmoded, ineffective, insufficient, or excessively burdensome and determines whether any such regulations should be modified, streamlined, expanded, or repealed.
activities that substantially alter or suspend regular programming and are designed to benefit any entity other than the station itself.4 “Regular programming” includes programming that “the public broadcaster ordinarily carries, but does not encompass those fundraising activities that suspend or alter their normal programming fare.”5 The Commission implemented this policy to reflect the concern that “educational stations are licensed to provide a noncommercial broadcast service, not to serve as a fund-raising operation for other entities by broadcasting material that is ‘akin to regular advertising.’”6 3.
The Commission has relaxed some of its other policies governing the broadcast of promotional announcements by NCE stations. Throughout this process, however, a concern that these changes not adversely affect the educational programming mission or noncommercial character of these stations has persisted. For example, in 1981, the Commission determined that stations could acknowledge contributions made by donors, but it continued to prohibit the broadcast of promotional announcements by NCE licensees in exchange for consideration, regardless of whether the sponsor of a given announcement was a for-profit or non-profit organization.7 The Commission adopted these policies to ‘“strike a reasonable balance between the financial needs of [public broadcast] stations and their obligation to provide an essentially noncommercial broadcast service’ and eliminate those proscriptive regulations deemed unnecessary to preserve the media’s noncommercial nature.”8 Notably, the revised policy regarding contributions by donors was specifically intended to benefit the station itself and its need for funding to continue to serve its local audience through noncommercial and educational programming.9
Later in 1981, Congress adopted Section 399B of the Communications Act of 1934, which prohibits NCE stations from broadcasting “advertisements,” defined as 4 See Policy Statement, 90 FCC 2d at 907, ¶ 20; Reconsideration Order, 97 FCC 2d at 264-65, ¶ 19. In the Reconsideration Order, the Commission addressed licensees’ concern “that the substitution of the term ‘licensee’ for that of ‘station’ [in the Policy Statement] extends the permissible area of suspended programming beyond those activities designed to raise support for the station’s operations to include activities designed to benefit the licensee’s other non-station institutional business or state operations.” The Commission acknowledged that the substitution of the term “licensee” for “station” had the unintended effect of expanding potential beneficiaries beyond that of the station itself and clarified that the fundraising must benefit the operations of the NCE station itself. See Reconsideration Order, 97 FCC 2d at 265, ¶¶ 19-20 (“In the absence of a waiver, noncommercial stations are prohibited from conducting any fundraising activity which substantially alters or suspends regular programming and [is] designed to raise support for any entity other than the station itself.”).
5 Reconsideration Order, 97 FCC 2d at 264, ¶ 18, See also Letter from Roy J. Stewart, Chief, Mass Media Bureau, FCC, to Chicago Educational Television Association, 10 FCC Rcd 12018, 12019 (October 23, 1995) (finding that a scheduled broadcast of a fundraising holiday gift exchange did not constitute regular programming because it would not ordinarily be carried by the station, and thus concluding that the station violated the Commission’s noncommercial fundraising policy).
6 Ohio State Univ., 62 FCC 2d at 450 (quoting Noncommercial Educational Stations, 26 FCC 2d 339, 343, ¶¶ 18-19 (1970)). See also Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations, First Report and Order, 69 FCC 2d 200, 226 ¶ 52 (1978) (“we adhere to our view that broadcast of such matter is inconsistent with the noncommercial nature of educational broadcasting. Furthermore, we believe that the devotion of programming time to raising money by on-the-air auctions for charitable or other organizations does not serve the purposes for which noncommercial educational broadcasting was established. The only plausible justification for permitting auctions for the benefit of others is that the station would retain a substantial portion of the revenue. However, even this justification is unpersuasive in view of the large amount of broadcast time licensees already devote to fund-raising. Simply put, noncommercial educational broadcasting is the wrong vehicle for general fund-raising by auctions and the only reason an exception is made on behalf of licensees is to aid in their efforts to provide the programming which they were licensed to broadcast.”).
7 See Second Report, 86 FCC 2d at 142-143 ¶¶ 4, 7-8.8 Policy Statement, 90 FCC 2d at 897, ¶ 3 (quoting Second Report, 86 FCC 2d at 141, ¶ 4).9 See id. at 900, ¶ 8.
any message or other programming material which is broadcast or otherwise transmitted in exchange for any remuneration, and which is intended—
(1) to promote any service, facility, or product offered by any person who is engaged in such offering for profit; (2) to express the views of any person with respect to any matter of public importance or interest; or (3) to support or oppose any candidate for political office.10
In light of this statute’s enactment, the Commission reviewed its NCE policies in 1982. In the resulting Policy Statement, the Commission determined that non-profit organizations are excluded from the meaning of the phrase “any person who is engaged in such offering for profit” in Section 399B.11 Thus, the Commission revised the Second Report’s determination regarding consideration received to allow the broadcast of promotional announcements sponsored by non-profit organizations in order to conform the rule to Section 399B of the Act.12 Despite these changes and other liberalizations of the fundraising and donor acknowledgment rules, the Commission continued the ban on conducting fundraising activities which substantially alter or suspend regular programming and are designed to benefit any entity other than the station itself, codifying these requirements in Sections 73.503(d) and 73.621(e) of the Commission’s rules.13 Those rules provide, in pertinent part, that “[t]he scheduling of any announcements . . . may not interrupt regular programming.”14 5.
Commission staff has occasionally granted waivers of these rules in extraordinary circumstances. For example, the Commission granted a waiver to the licensee of an NCE television station to broadcast a three-hour fundraiser for Wolf Trap Foundation, with the money to be used to rebuild the Filene Center at Wolf Trap Farm Park which had burned down.15 The Commission granted the waiver in part based on the fact that the fundraising programming would be consistent with regular programming, in that more than half of the program would consist of excerpts of past programs broadcast by the NCE station that had originated from Wolf Trap Farm, and the remainder of the program would consist of interviews with and performances from stars who had appeared at Wolf Trap.16 6.
Similarly, the former Mass Media Bureau granted a waiver of Sections 73.621(e) and 73.503(d) of the Commission’s rules to the licensee of an NCE radio station and an NCE television station in West Palm Beach, Florida, where the President had declared Dade County a disaster area following Hurricane Andrew.17 The stations proposed to broadcast a two-hour simulcast along with four area commercial television stations to raise funds and donations and provide information for the hurricane 10 47 U.S.C. §§ 399b(a), 399b(b)(1).11 See Policy Statement, 90 FCC 2d at 899, ¶ 8.12 See id. at 901, ¶ 10.13 47 C.F.R. §§ 73.503(d), 73.621(e). See Policy Statement, 90 FCC 2d at 907, ¶ 20.14 47 C.F.R. §§ 73.503(d), 73.621(e).15 See Cohn and Marks, 51 RR 2d 659, 660 (1982) (“Cohn and Marks”).16 See id. at 660. See also Letter from Roy J. Stewart, Chief, Mass Media Bureau, FCC, to Richard J. Bodorff and Todd M. Stansbury, Esqs., 8 FCC Rcd 7909 (October 26, 1993) (“Bodorff Letter”) (granting a request for a waiver of § 73.503(d) of the Commission’s rules, where the one-time on-air fundraising would benefit the St. Paul Chamber Orchestra, which had a long history of providing programming to many stations and was facing “severe financial distress,” and where the fundraising would maintain the existing programming format).
17 See Letter from William H. Johnson, Acting Chief, Mass Media Bureau, FCC, to Malcolm G. Stevenson, Esq., 7 FCC Rcd 5634 (August 27, 1992) (“Stevenson Letter”). 3
relief effort.18 The staff granted the waiver in recognition of the catastrophic events that had occurred, the stations’ unique ability to serve the area affected by the disaster, and the limited length of the program.19 The Commission has also granted rule waivers for fundraising for other singular catastrophic events, such as Hurricane Katrina, the September 11, 2001 terrorist attacks, the January 2005 tsunami in Southeast Asia, and the January 2010 earthquake in Haiti.20 More recently, the Commission established informal procedures through which NCE licensees could request Commission approval to conduct fundraising to aid the Japan earthquake and tsunami relief efforts, noting that it has granted waivers of Section 73.503(d) for “fundraising appeals to support relief efforts following disasters of particular uniqueness or magnitude” and that such waivers “have been issued for a specific fundraising program or programs, or for sustained station appeals for periods which generally do not exceed several days.”21 In contrast, in 1995, the staff denied a request for a waiver of Section 73.503(d) where the proposed fundraising for the Muscular Dystrophy Association occurred annually to address ongoing needs and was not limited to a specific one-time problem.22
In June 2011, a working group including Commission staff, scholars and consultants released the INC Report, a comprehensive report on the current state of the media landscape.23 The INC Report discussed both the need to empower citizens to ensure that broadcasters serve their communities in exchange for the use of public spectrum and the need to remove unnecessary burdens on broadcasters who aim to serve their communities. Noting comments from the National Religious Broadcasters (“NRB”),24 the INC Report recommended that we consider affording noncommercial broadcasters more flexibility by allowing NCE stations that are not grantees of the Corporation for Public Broadcasting (“CPB”) to spend up to one percent of their annual airtime doing fundraising for charities and other third-party non-profit organizations.25 In order to be eligible for CPB funding, an NCE station must devote the substantial majority of its daily total programming hours broadcast on all of its channels to CPB-qualified programming, which is defined as “general audience programming that serves demonstrated community needs of an educational, informational and cultural nature.”26 Programs that “further the principles of 18 See Stevenson Letter, 7 FCC Rcd at 5634.19 See id. Andrew was a Category 5 hurricane that caused historic amounts of damage in Dade County. See “After 10 Years, Hurricane Andrew Gains Strength,” National Oceanic and Atmospheric Administration Press Release, NOAA 02-107 (rel. Aug. 21, 2002), available at http://www.nhc.noaa.gov/NOAA_pr_8-21-02.html.
20 See Media Bureau Announces Procedures for Obtaining Commission Approval for NCE Station Fundraising to Aid Japan Relief Efforts (March 16, 2011). 21 Id.22 See Letter from Roy J. Stewart, Chief, Mass Media Bureau, FCC, to Karsten Amlie, 10 FCC Rcd 9763 (August 18, 1995).
23 See INC Report. As noted in the INC Report, the report was drafted by an informal working group, and the views of the report “do not necessarily represent the views of the Federal Communications Commission, its Commissioners or any individual Bureaus or Offices.” Id. at 362.
24 In 2008, prior to proposing the relaxation of the prohibition on third-party fundraising by NCE stations in its comments in the Future of Media proceeding, NRB informally requested that the Commission modify its policy regarding fundraising by NCE stations to permit NCE stations to engage in limited fundraising for 501(c)(3) non-profit organizations without having to obtain a waiver from the Commission. See Memorandum from Craig Parshall, Senior Vice President and General Counsel for National Religious Broadcasters to the Federal Communications Commission at 2 (filed October 15, 2008) (“NRB Memorandum”). NRB argued that allowing NCEs to raise funds for non-profit organizations, unlike fundraising on behalf of for-profit organizations, would serve the public interest. Id. at 2. The NRB Memorandum will be made a part of the record of this proceeding.
25 See INC Report at 356. See also id. at 317.26 See Corporation for Public Broadcasting, FY2012 Radio Community Service Grant General Provisions & Eligibility Criteria at 7 (2012) (“Radio CSG General Provisions & Eligibility Criteria”), available at (continued....)