Yes, according to the FCC regulations, it is permissible for an LPFM (or NCE) station to include commercials on their internet stream while still adhering to compliant underwriting acknowledgments over the airwaves. The FCC's regulations primarily focus on content broadcast over the FM frequency, and they do not have strict restrictions on what can be included in an internet stream. However, it's important to ensure that the underwriting acknowledgments meet the requirements set forth by the FCC and that the commercials on the internet stream comply with relevant copyright and licensing laws. It's advisable to consult with legal professionals to ensure full compliance with all applicable regulations.
The inclusion of advertising messages in a stream can be approached in two distinct manners. In "in-stream advertising," the automation triggers the playback of a different message for stream listeners compared to what airs over the radio. Post the break, both the stream and the radio broadcast revert to regular programming. Alternatively, advertising on a stream can take the form of a "pre-roll" message where the advertisement plays as the stream connects, directly transitioning into the programming. This concept mirrors pre-roll advertising on platforms like Tune-In and YouTube.
However, the implementation of "opt out/in-stream" and "pre-roll" advertising necessitates thorough consideration of potential consequences.
Discrepancy in Break Lengths: Typically, commercials span 30 or 60 seconds, whereas compliant underwriting announcements tend to be briefer. Although the FCC does not stipulate a specific time limit for underwriting acknowledgments, it has indicated that longer announcements might straddle the line between acknowledgment and promotion. Crafting an underwriting message encompassing the underwriter's name, a non-promotional business description, product line details, location, and contact information can be accomplished in under 15 seconds.
Increased Scrutiny from Competitors: Stations employing opt-outs to air full commercials on streams might encounter complaints and petitions for denial of renewals from rival broadcasters. Instances have arisen where LPFM or NCE stations were accused of broadcasting commercials, which were exclusive to their streams. Addressing such complaints can demand resources and potentially legal representation.
Necessity of Comprehensive Logs: Stations executing opt-out messages must maintain detailed logs that document the time of the break, content broadcast on the internet stream, and simultaneous FM airplay.
Non-Profit Status Implications: While not offering legal counsel, it's crucial to be aware that certain for-profit activities by a nonprofit organization could breach federal or state laws. This is particularly relevant when advertisements pertain to political candidates or ballot measures. Consulting an attorney or a certified public accountant well-versed in nonprofit regulations is essential to gauge the effects of running such commercials on an organization's nonprofit status.
Potential Licensing and TOS Concerns: One must also assess whether music licensing performance rights organizations (e.g., ASCAP, BMI, SESAC, and SoundExchange) permit commercial advertising under the station's license type or, in the context of aggregated licensing such as Live365, whether these messages align with their Terms of Service.
Please note that these considerations provide an overview and should not be construed as legal advice. Consulting appropriate legal professionals is recommended for addressing specific circumstances.