Federal law has required broadcasters to identify sponsors of radio program content since 1927.requirements have been amended to expand and further define the requirements. Since that time, sponsorship identification In 1934, the Communications Act established FCC and gave it authority to administer sponsorship identification requirements for broadcasters, among other responsibilities, as well as creating additional sponsorship identification requirements. In 1944, FCC adopted rules implementing the sponsorship identification requirements created in 1934. These rules, which required a full and fair disclosure of the sponsor’s identity, remain largely unchanged. In 1960, the Communications Act was amended to redefine the situations in which broadcasters must identify program sponsors. The need for this change arose due largely to the payola scandals of the late 1950s. The conference report accompanying the 1960 act included 27 case examples that were included to provide guidance on how the committee believed the sponsorship identification requirements should be applied. In 1963, FCC adopted regulations implementing the 1960 amendments and provided 36 sponsorship identification case examples as guidance. In 1969, FCC adopted regulations applying sponsorship identification requirements modeled on the broadcast rules to cablecasting by community antenna television systems (CATV). Cablecasting was defined as “programming distributed on a CATV system which has been originated by the CATV operator or by another entity, exclusive of broadcast signals.” In 1972, FCC updated its regulations to apply sponsorship identification requirements to programming under the exclusive control of cable television operators. In 1975, FCC clarified the meaning of its 1944 requirement for full and fair disclosure of the identity of the sponsor, modifying its regulations to make clear that broadcasters and cablecasters are expected to look beyond the immediate source of payment where they have reason to know (or could have known through the exercise of reasonable diligence) that the purchaser of the advertisement is acting as an agent for another, and to identify the true sponsor. In 1991, FCC adopted rules requiring visual and audible sponsorship identification announcement for televised advertisements concerning political issues. In 1992, FCC amended the requirements for advertisements concerning candidates by removing the requirement for an audible announcement and adopting specific criteria for a visual announcement. consist of letters at least 4 percent of the vertical picture height and that the statement be shown for at least 4 seconds. 7 FCC Rcd. 678 (1992). 7 FCC Rcd. 1616 (1992) (rule is codified at 47 C.F.R. §1212(a)(2)(ii)). There have been no changes to the sponsorship identification statutes or regulations since 1992, although there have been more recent FCC cases affecting their interpretation and application. These sponsorship identification requirements generally apply to different types of advertising. Table 1 shows the range of different types of content that often require a sponsorship announcement, including commercial advertising where the sponsor is not typically apparent and political or controversial issue advertising where an announcement must meet additional requirements. Presently, the Communications Act, as implemented by FCC, requires broadcasters and cablecasters to disclose to their listeners or viewers if content has been aired in exchange for money, services, or other inducement. For commercial content, such as advertisements, embedded advertisements, and video news releases, the announcement must be aired when the content is broadcast and can be either a visual or an audible announcement. Political and controversial content must also have either type of announcement when aired on television, but candidate advertisements have specific visual requirements. In addition, when anyone provides or promises to provide money, services, or other inducement to include programming in a broadcast, that fact must be disclosed to the broadcaster or cablecaster. Both the person providing or promising to provide the money, services, or other benefits and the recipient must make this disclosure so that the station can broadcast the sponsorship identification announcement. The general public and to a lesser extent other sources, such as media public interest groups, file complaints with FCC about violations. Because of the high number of broadcasters and cablecasters, FCC relies on the public as an important source of information about compliance with The public is able to assist in monitoring broadcasters’ requirements. compliance with requirements because, as we will describe later in our finding on requirements, broadcasters are required to maintain a publicly available inspection file. This publicly available file lists pertinent information, such as quarterly issues and programs list, which describes the programs that have provided the station’s most significant treatment of community issues during the preceding 3 months. The public can access the public inspection file to check and monitor broadcasters’ compliance and service. As part of its enforcement process, FCC investigates complaints about potential violations by broadcasters and cable operators of the statutes and rules it administers, including sponsorship identification complaints. Two bureaus within FCC—the Consumer and Governmental Affairs Bureau (CGB) and the Enforcement Bureau—are primarily responsible for developing and implementing procedures for processing complaints, conducting investigations, and taking enforcement actions. As part of its role of responding to consumer complaints and inquiries, CGB initially processes the majority of the complaints FCC receives. To the extent that a complaint is defective, for example, for failing to identify a particular broadcast, including its date, time of day, and the station on which it was aired, CGB will dismiss the complaint as incomplete and advise the complainant accordingly, providing guidance as to what information should be included in a complaint. CGB forwards most complaints deemed complete to the Enforcement Bureau, but some complaints, including political sponsorship identification complaints go to the Media Bureau for further investigation. When FCC discovers violations it can take various enforcement actions dependent on the seriousness of the violation, such as admonishment, monetary forfeiture, or not renewing a broadcaster’s license. 2 U.S.C. § 441d. the advertisements. The disclaimer requirements apply to any kind of communications media carrying public political advertising and are not limited to broadcast or cablecast advertisements. Similar to FCC, FEC initiates most enforcement activity pursuant to complaints received from the general public, including individuals and organizations associated with federal political campaigns. Complaints are filed with the Office of Complaints Examination and Legal Administration (CELA), which reviews the complaint to determine if the complaint states facts, identifies the parties involved, and provides or identifies supporting documentation. If the complaints are deemed sufficient, CELA informs the complainants that they will be notified once the case has been resolved. If FEC discovers violations, enforcement can include negotiated corrective action, including civil penalties, or other Commission initiated legal action seeking judicially imposed civil penalties or other relief. As previously stated, sponsorship identification statutes and regulations require broadcasters and cablecasters to identify commercial content— usually an advertisement, an embedded advertisement, or a video news release (VNR) that has been broadcast in exchange for money or payment in-kind. According to most broadcasters we spoke with, commercial content is fairly straightforward to identify, and they are accustomed to dealing with such content and report that compliance is manageable. For content considered political or discussing a controversial public issue, requirements, enforced by FCC and FEC, are more extensive and require more detailed on-air announcements and tracking of all related communications and agreements in a public file for FCC. According to FCC, commercial advertisements do not always require a sponsorship announcement. FCC does not require an announcement when an obvious connection exists between the content and sponsor, such as with a standard commercial advertisement. For all commercial advertisements where the true sponsor is not apparent, even for infomercials that may be 30 minutes or longer, FCC requires a written or verbal announcement to occur only once during the program. This announcement must fully and fairly disclose the true identity of those who are paying for the advertisement. In addition, whenever an individual, such as a deejay, receives money or payment in-kind for airing specific content or favorably discussing a specific product a sponsorship announcement must be made. Therefore, station employees must disclose such transactions to the station. Thus, if a record company or its agent pays a deejay to play records or talk favorably about an artist or record on the air, and he does so, the result is considered sponsored content. FCC guidance directs that the deejay must reveal the payment to the broadcaster and a sponsorship announcement must be made when the content goes on-the-air. According to broadcasters, industry trade groups, and others we spoke with, compliance with these standards and requirements is not a problem because the requirements are part of their standard review process. Embedded advertisements—typically, when a commercial product is provided without charge to use in entertainment programming—may not require a sponsorship announcement if they are reasonably related to the show. Since many consumers now record shows or change the channel during commercials, broadcasters have increased their use of embedded advertising. However, a sponsorship announcement is not required every time a product appears in a program. For example, FCC’s guidance describes scenarios in which a manufacturer provides a car to a television show for a detective to chase and capture the villain, and states that the use of the car alone would not require a sponsorship announcement. In this scenario the use of the car could be considered “reasonably related” to its use in the show. However, in the same scenario, if a character also made a promotional statement about the specific brand—such as its being fast—FCC requires a written or verbal sponsorship announcement sometime during the program. According to FCC’s guidance, in this second scenario, the specific mention of the brand may go beyond what would be “reasonably related” to its use in the show. The reasonably related standard requires some assessment of the content. Broadcasters told us they have processes in place to review content on their networks to determine if a program needs a sponsorship announcement for an embedded advertisement. VNRs are another type of commercial content which may require a sponsorship announcement. VNRs are pre-packaged news stories that may include only film footage or may also include suggested scripts. However, broadcasters do not always use a VNR in its entirety but may use portions of the video.