The reason for the big penalty against the Cesar Chavez Foundation’s KNAI-FM in Phoenix and KUFW-FM in Woodlake, California, is for violating the Commission’s underwriting laws by broadcasting announcements that promoted the products, services, or businesses of its financial contributors.
CCF admitted it broadcast announcements in violation of the Commission’s rules and agreed to implement a compliance plan and pay the $115,000. CCF will also observe a one-year moratorium on conducting underwriting on behalf of for profit entities.
The Commission says between August 2016 and March 2017, KNAI-FM and KUFW-FM ran afoul of the underwriting rules in various ways, by, for instance, including comparisons between an underwriter’s product or service to those of its competitors (“There are times that we fear going to see cars because we don’t know who to trust. You can trust the Bill Luke car dealership”); information on prices, savings, or value (“Additional holiday bonus savings on select models”); calls to consumers to take action (“Are you ready to buy a house? Want to know if you qualify?”); menu listing of products or services (“Cell phones from companies such as Verizon Wireless, Cricket, T-Mobile, Virgin Mobile, Trac-Fone”); and excessive length (between 30 and 60 seconds in duration).
The Commission notes in the order that “Non-Commercial Educationals” (NCE) cannot air commercial advertising. These restrictions “protect the public’s use and enjoyment of commercial-free broadcasts” and “provide a level playing field for the noncommercial broadcasters that obey the law and for the commercial broadcasters that are entitled to seek revenue from advertising.”
The Commission goes on to explain the rules further. “While an NCE licensee may broadcast underwriting announcements identifying entities that donate to the station by name, such announcements may not promote an entity’s businesses, products, or services. In addition, such announcements may not contain comparative or qualitative descriptions; price information (sales or discounts); calls to action; inducements to buy, sell, rent, or lease; and excessively detailed “menu listings” of services offered by the entity. While the Commission has not adopted any quantitative guidelines on underwriting announcements, it has found that the longer the announcement, the more likely it is to contain material that is inconsistent with their “identification only” purpose.
Read the FCC Order HERE.
