Underwriting: Time for yet another crash course

We know it is tough for LPFM, but "startup organizations" were never the original intention of the educational radio service. Therefore, LPFMs have many more challenges and must do so within the law.

(Bonnet on.) With the new stations coming on the air and observations of things I have been seeing other LPFM and small full-service NCE stations doing, I think it’s time to re-raise the uncomfortable subject of underwriting acknowledgement compliance.

Times have been tough for NCE/LPFMs, I get it!

Non-commercial Educational (NCE) broadcast stations, this means BOTH full-service and Low Power FM stations, are currently going through some very rough times over these past few years. Many stations (but not all) were able to make it through the “2020 crud”, despite the fact that many public facing businesses either had gone out of business or otherwise experienced substantially reduced revenues due to the loss of foot traffic. Today, we are continuing to experience reduced public involvement in the funding of NCE stations due to competing technologies, such as streaming and social media advertising, which have very few restrictions on advertising content compared to the “identify but not promote” model of NCE underwriting acknowledgements.

The history of this educational radio service intended for school districts

I again remind everyone the type of service that they applied for when they obtained their NCE (full service or LPFM) station. This service was originally designed for schools such as colleges, universities and high schools, originally as a method for schools to transmit academic lectures to other school campuses and to provide programming to the public outside of school hours. It would eventually evolve into a training ground for future broadcasters as part of a curriculum. When the original Communications Act of 1934 was passed, there were statutory provisions put in place for the new FCC to set aside reserved spectrum for educational purposes:

“The Commission shall study the proposal that Congress by statute allocate fixed percentages of radio broadcasting facilities to particular types or kinds of non-profit radio programs or to persons with particular types of or kinds of non-profit activities, and shall report to Congress, not later than February 1, 1935, it’s recommendations together with the reasons for the same.” [47 USC §307(c) (1934)]

The first hearing for these new types of radio stations and reserved spectrum took place on October 1, 1934.¹ The Commission would eventually set aside spectrum for the new “high frequency” radio service (which we know today as FM). Even when FM spectrum was in the 41~50 MHz range in those early days, there was still spectrum set aside for educational broadcasting. In the TV Table of Allotments, specific channels are set aside for educational use. This is still done to today. Since AM radio was already widespread by 1934, it was not really possible to practically reserve spectrum in the band. AM has never used a “table of allotments” like FM and TV does.

How Christian broadcasting opened the door for non-academic secular organizations, including Pacifica

In the early days, educational broadcasting was limited to not only schools but school systems. This is consistent with the original intention of educational broadcasting to be able to deliver lectures to remote campuses.² It took action in the early days by the Moody Bible Institute of Chicago, which operated a single campus (not a school system) to argue that religious schools can provide an educational program and that their “students” also included the general public. The Commission’s decision in Moody would open the door for other educational institutions, including those in the private sector and eventually to organizations that are not in an academic setting, such as Pacifica Foundation to be the licensees of NCE stations. The organizations still had to be educational in nature and if they were not an academic facility, they had to make a showing that the radio/TV station would be used to advance an educational program. This is why today, NCE and LPFM applicants for new stations and assignment applications must include an educational statement with their application in order to justify their eligibility to use NCE broadcast facilities.

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NCE/LPFM stations are currently under threat

We are now in a time when NCE stations are now under the microscope more than ever. Due to politics, stations are afraid of losing their licenses or otherwise being sanctioned just for existing. It has come to the point where some on one side of the aisle are now claiming that because the Corporation For Public Broadcasting has been defunded, that NPR affiliate stations should lose their licenses because they can’t provide programming that is “in the public interest”. This argument does not hold much water since not all NPR affiliate stations have applied for and thus have never received CPB funding. One example is right here on Delmarva in the case of WHCP, an NPR station in Cambridge, MD that graduated from LPFM in the 2021 NCE window. A graduation that was supported by REC.

While there are LPFM stations that are Pacifica Network affiliates, there are very few, if any LPFM stations that are associated with NPR though they may take programming from other public radio providers. Most secular LPFM stations today are operating with music formats. While some are true local stations with local talent and taking on local issues, a considerable number are merely jukeboxes running music formats that could have viability on commercial radio and sometimes operate in a manner where a commercial radio way of thinking is held. This kind of attitude is dangerous territory for the promotion of LPFM and small full-service NCE stations.

The reality of LPFM’s lack of an underlying funding source

Likewise, most of these stations do not have what the larger stations have, original underlying funding from school districts, university systems or well-funded nonprofit organizations. These small stations, were funded through good ol’ grassroots fundraising in the community or out of pocket expenses by the founder(s) and many are operating on shoestring budgets. Because of this, these stations are always strapped for cash and may come up with that they think are “creative” ways to fund raise. Unfortunately, there are many out there, especially in the LPFM side who either are not aware of the FCC’s Policy on the Nature of Noncommercial Broadcasting or they do know, but they ignore it or just don’t understand it because they never reached out to experts, such as REC or the peer Facebook groups in order to ask. Unfortunately, reaching out to peer groups may only expose them to more bad advice that other stations are doing that may not align with the FCC’s Nature policy.

Violations of the underwriting rules are real, and so are the fines

Violations of the FCC’s Nature policies could lead to forfeitures (fines), which in some egregious cases, could lead to the six figures. One of those egregious cases involved the Cesar Chavez Foundation (CCF), which operated a number of NCE full-service stations in California and Arizona under the brand La Campesina. The underlying foundation works to promote immigrant farmworkers. In 2018, CCF settled with the FCC by Consent Decree where CCF admitted that they “broadcast announcements that violated the Commission’s underwriting laws by broadcasting announcements that promoted the products, services or businesses of its financial contributors.”

In the introduction of that Consent Decree, the FCC, through the Media Bureau, clearly drew a line in the sand where it comes to what advantages NCE broadcasters have in exchange for providing a commercial-free service:

NCE broadcasters are licensed to use spectrum that is specifically reserved for them, and they benefit from lower regulatory fees and fewer requirements than those imposed on commercial entities, in recognition of their noncommercial and non-profit nature. That flexibility, however, is not unlimited, and NCE broadcasters 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.” NCE broadcasters are licensed to provide noncommercial, locally oriented programming for their communities, and the Commission acts when necessary to enforce the laws prohibiting NCE-FM stations from airing announcements that promote for-profit advertisers.

While LPFM stations do not have reserved spectrum (but they can use the reserved NCE spectrum if a channel is available there), they are subject to the other privileges, such as no regulatory fees and fewer requirements.

The Consent Decree also very well explains the nature of what can be included in an underwriting acknowledgement and the latitude of good judgment it gives licensees:

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. At the same time, however, the Commission has acknowledged that it is at times difficult to distinguish between language that promotes versus that which merely identifies the underwriter. Consequently, the Commission expects that licensees exercise reasonable “good faith” judgment in this area and affords some latitude to the judgments of licensees who do so.

In the case of CCF, which involved commercials on two full-service NCE stations, the licensee and the FCC settled with a civil penalty of $115,000.

100-watt LPFMs are not immune from FCC fines

Don’t think that LPFMs will get away with only a hand-slap because of their size. In 2023, the FCC upheld a $15,000 forfeiture against Plymouth Gathering, licensee of KELS-LP, Greeley, CO. In this case, the FCC determined that the station carried over 1,600 announcements they considered commercials. In the original Notice of Apparent Liability for Forfeiture issued to Plymouth, they give examples of announcements that were considered troublesome. In the case of Payson Center for the Musical Arts, Inc., licensee of KRIM-LP, Payson, AZ, the Commission agreed to a civil penalty of $20,000, which would increase to a total of $61,500 if the licensee either fails to make the $20K payment or receives another Notice of Apparent Liability for Forfeiture.

The bottom line here is simple. Identify, but DO NOT PROMOTE. You are allowed to acknowledge a business name (which matches what is on their state corporation documents, not just a brand name), their address (without any promotional precursors such as “conveniently located at…”), their telephone number (without a call to action such as “call..”), their website URL (as long as the website URL is the business name and does not contain anything promotional in it and a brief non-value added description of one or two of their product lines (i.e. “they sell toilets from Toto and Kohler”). Slogans, while a allowed are a very very slippery slope unless you absolutely know what you are doing. Just because there is promotional language in their slogan, it does not mean that you can use it. The slogan and logogram language is more to benefit television than it is for radio. I would avoid it all costs. Also, another common misbelief is that it is OK to give some kind of promotional information as long as it is factual (i.e. “voted New Times Best of Phoenix in 2025.”) This is also NOT TRUE.

While this may have expanded since FCC Chairman Brendan Carr had recently inquired several NPR affiliates regarding the content of their underwriting messages, it has been traditional that the FCC acts on these based on complaints from commercial stations. Statistically, LPFM stations that are the most vulnerable to complaints are those that are in smaller markets where there is one prominent local or regional owner and the LPFM station is operating a format that is commercially viable (such as album rock, oldies, retro, country of all eras, etc.) or that the LPFM station engages in predatory fundraising that tries to “steal” revenues from commercial stations (predatory fundraising could be simply making claims that the LPFM station is an alternative to commercial radio advertising). We had one case a smaller southern market where the LPFM station undercut the local commercial station that for many years, had carried the local high school football games. It was reported that the LPFM would engage in commercial advertising during the football coverage.

Michi’s 11 Underwriting Commandments

So, what can an LPFM do to prevent pissing off the commercial stations, resulting in an FCC investigation and potentially a forfeiture or civil penalty:

1. Stick with the true community radio model. Do not run a jukebox of a certain music format that commercial stations could normally run, even if no commercial station in the area is running that format right now.

2. Identify and do not promote in underwriting as well as keeping message lengths to a minimum and do so in a way where programming is interrupted for the underwriting messages. Don’t do an acknowledgement in the segue and lead-in to a song. Stop programming, add a second of silence, do the underwriting, do another second of silence and return to the program.

3. Do not attempt to sell underwriting airtime by message length. (e.g. $xx for 12 30-second spots, etc.) or even try to publicize it on a rate card, etc.

4. Never say that on-air underwriting acknowledgements are for promoting a business.

5. Never sell airtime. (i.e. $xx for 30 seconds, $xx for 5 minutes, $xx per hour, etc.). Any kind of consideration received for “messages of public importance” is considered a commercial under the Communications Act, even if the typical underwriting no-nos like “calls to action” are not used.

6. Do not assume that “call to action” is the only restriction on underwriting announcements. Read the REC Compliance Guide. Also, do not assume that any kind of “call to action” is prohibited. You can do “calls to action”, but not in a manner where consideration (reimbursement) is involved. A permitted call to action can be “come to City Park this Saturday for the annual City of Podunk Spring Festival.”.

7. Just because you hear a style of announcement on an NPR affiliate, don’t assume that it is OK because “they are the experts”. Many NPR affiliates cross the line (and this is where I agree with Chairman Carr). The main difference is that NPR affiliates normally do not engage in predatory fundraising nor do they run program formats that are also very viable in commercial radio.

8. Never allow your air talent to do live reads of underwriting announcements. All announcements should be written, vetted for compliance and pre-recorded for playback during pauses in programming.

9. Never name a station element after an underwriter. (e.g. “At the Riverton Honda weather center, it’s clear and 78 degrees. You are listening to WVWA-LP Riverton, coming to you from the Joe’s Crab Shack Studios.”)

10. Never, ever do live remotes from sponsors. I know there are several LPFMs that do these, but they are extremely unbecoming of noncommercial stations and can open stations up to a treasure trove of trouble. If your station decides to go on the road to raise awareness and/or funds, bring the cameras to post social media, but keep the microphones back in the studio.

11. Avoid hiring or bringing in volunteers who’s previous experience is radio commercial advertising sales. They will bring all of their bad habits with them.

Simple.. just don’t be like a commercial station.. be different

Stations need to just provide programming that is so compelling and addresses the local needs of the community so well that local businesses will want to be associated with the station, even if they can’t talk about the mattress sale on the air therefore stations do not feel compelled to violate the Nature policies in order to make a buck to survive.

Remember, your neighbors on the dial are listening.. and perhaps Brendy is listening too. These violations not just hurt the station but they also hurt the service itself. As the one who has traveled to Las Vegas in April to be the punching bag for the service, I would love to come back from NAB some year without too many literal knocks to the noggin.

Also remember, every 8 years when your organization needs to renew their license, they must disclose any enforcement activities related to the station, including where it comes to underwriting. The Commission will then have to determine if the station is acting in the public interest. Depending on who is FCC Chairman when your license comes up for renewal could vary what that “public interest” standard really is. If there’s any time in our history to keep your nose clean where it comes to the FCC’s enforcement docket, now is that time.

Remember, advice from REC is always free (though donations are always appreciated).

1. See Broadcasting Division, Order No. 1, 1 FCC 25 (1934).

2. In later decades as television became more prevalent, this type of “direct to schools” broadcasting would migrate to a service called the “Instructional Television Fixed Service” (ITFS). Today, the ITFS is known as the “Educational Broadband Service” (EBS) as the spectrum can be used for purposes other than just television transmission. ITFS/EBS operates on microwave frequencies on a point to multipoint basis.