FCC Fines WLS (AM) for Airing News Story that was Actually a Paid Advertisement

by Jerry Glover

The Federal Communications Act requires television and radio stations to identify the sponsor whenever the station broadcast matter “in return for money, service, or other valuable consideration.” 47 U.S.C. Sec. 312(a)(1). The Federal Communications Commission’s rules reinforce that requirement. See 47 C.F.R. Sec. 73.1212(a).

The Commission has noted that the statutory and regulatory sponsorship identification requirements are necessary to allow the public to know “who seeks to persuade them.”   Without these requirements, the public could be mislead and deceived. 20 FCC Rcd 8593, 8593-94 (2005).

In 2009, Chicago radio station WLS (AM) broadcast program matter on behalf of Workers Independent News (“WIN”). The program material included 45 ninety-second spots, 27 fifteen-second promotional announcements, 2 two-hour programs and 1 one-hour program. WLS admitted that 11 of the 45 ninety-second spots identified the name of the organization, WIN, and the name of the narration but they did not state that the program publicized in each spot was sponsored, paid for or furnished by WIN.

The announcements were actually informational and concerned state legislation that impacted the local economy of Chicago. Each announcement included an introduction by a narrator and then clips of interviews with various state legislators about the legislation in question. The announcement ended with another identification of the narration followed by WIN’s name. No product or service was touted in any announcement.

A complaint was filed with the FCC.

WLS argued to the Commission that it had not violated the statute and regulations since each announcement identified WIN by name thus satisfying the requirement that the identification of the sponsor be revealed. On February 6, 2012, the FCC rejected this argument noting it had no precedent in prior FCC decisions. The Commission noted that the announcement did not include a trade or other form of advertising name; rather the announcement used the name “Workers Independent News” which tended to make the announcements sound like an objective news program. Therefore, merely identifying WIN in the spot did not satisfy the sponsor identification rule since a listener could be deceived into believing that the announcement was a news story prepared by or on behalf of WLS.

WLS also argued (and the FCC again noted the argument had no precedent) that the announcements were aired with other advertising and not during the time in which actual news stories were broadcast so that listeners would identify the announcements as advertisements.  The Commission stated that the subject matter of the announcements would not make it apparent to listeners that they were sponsored programming no matter where in the broadcast schedule those announcements were placed. These announcements did not sound like commercials, the FCC explained.

The FCC noted that its guidelines for issuing fines (or “forfeitures”) required a base amount of $4,000 for sponsor ID violations. Therefore, the Commission fined WLS a total of $44,000 for the 11 announcements in which WIN was not identified as a sponsor.

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