FCC101: The Other Kind of "Commercial"
The restriction on "commercials" on NCE/LPFM stations is more than just underwriting acknowledgements that cross the line. There's another kind many stations may be violating.
Many times when you hear people talk about the ways that you can acknowledge funding received by noncommercial educational (NCE) broadcast stations including LPFM stations, its about the those underwriting acknowledgements where the station is intending to recognize a for-profit business for their donation and giving out information about the business. We have seen many cases where stations knowingly or unknowingly cross the line by including messaging that crosses the line from identification to promotion of the business. Section 399B(a)(1) of the Communications Act states that any message or programming material which is broadcast or otherwise transmitted in exchange for any remuneration and is intended to promote any service, facility, or product offered by any person who is engaged in such for offering for profit, as a “commercial”.
That is not the only thing the Act defines as a commercial.
Another definition, which is found in 399B(a)(2) also considers to be as a commercial any message or program material that is intended “to express the views of any person to any matter of public importance or interest.”
Little is mentioned about this definition in past FCC policy documents related to the noncommercial nature of educational broadcasting.
To put it simply, someone cannot pay to have their message transmitted on a NCE/LPFM broadcast station. In other words, you cannot sell time.
Examples of station programming matter that could violate 399B(a)(2) include:
Selling “blocks” of time to another programmer in exchange for payment from that programmer. (time brokerage)
Allowing a church to purchase an hour of time on Sunday mornings for the transmission of their service (you can donate time to a church but you cannot receive reimbursement).
“Dollar a Holler” or other types of programming where someone (including listeners) can pay to have their voice and/or message played on the air, regardless of the reason.
Public service announcements that are sponsored by another entity in exchange for payment. (“Remember to buckle up and stay sober on the road. This public service message was brought to you by Riverton Ford.”)
Station features such as weather reports, sports scores and community calendars that are directly tied to a sponsor (“this community calendar is sponsored by Joe’s Crab Shack…”).
Underwriting announcements that are either written by and/or voiced by a representative of the for-profit business (including their customers) that is paying the station.
Reminder: Underwriting acknowledgements cannot be embedded in programming (they cannot interrupt programming). They can only be made during program breaks, such as near the top or bottom of the hour, or any time when it is clear that the program is taking a break.
In the past, we had raised concerns regarding the legality (from a NCE/LPFM perspective) of certain affiliate agreements with the Catholic broadcast network Relevant Radio where the affiliate station would receive a 50% commission on all donations collected during national pledge drives from listeners to their station. While this may work for commercial stations, it is highly questionable for NCE/LPFM.
Last Friday, the FCC reached a Consent Decree with NCE FM station WPRR-FM, Clyde Township, MI. In the WPRR-FM case, a programmer, who happened to be a for-profit entity called Ghettothropic, LLC would provide programming material to WPRR-FM. The programmer would retain all revenues derived from the programming, including listener contributions and underwriting support. The programmer agreed to reimburse the station for a portions of its direct expenses in operating WPRR-FM. In this case, the Media Bureau found that the station received “something of value” from the for-profit programmer, specifically the programming material at no charge to the station as well as pecuniary consideration in the form of reimbursement of the licensee’s operating expenses.
In this specific case, the broadcast station was not required to make any penalty payment in connection with the Consent Decree, but they have been placed on a compliance plan for the next three years which includes annual reports on compliance to the FCC.
On October 11, 2024, the FCC consented to an assignment of license of commercial AM station WPRR(AM), Ada, MI from Goodrich Radio, LLC to Ghettothropic, LLC.
Remember, NCE/LPFM stations are intended to be educational first. While stations are free, under the first amendment to choose the way that they educate and entertain, they are still subject to certain business models to operate the station in a way that is motivated by community service and not by making a profit.
While any NCE/LPFM station not following the rules regarding the noncommercial nature can receive any enforcement action, those stations that are in smaller markets and those stations that run formats that are more common for commercial radio than they are for noncommercial radio are easier targets for future enforcement actions.
Remember, don’t sell time. Underwriting acknowledgements need to be the station, talking to the listener, thanking the underwriter. Nothing else is acceptable.
There is a third definition of “commercial” in §399B(a) and that is paid political advertisements. We discussed broadcasting during the election cycle in our previous FCC101.
If you need more information, please see the REC Networks Compliance Guide.
This information has not been reviewed by an attorney. Please use this advice at your own risk. For bona fide legal advice, please seek the services of a qualified communications attorney.