FCC Proposes Fine for Comcast
The Federal Communications Commission is proposing to fine Comcast $4,000 for running a video news release without disclosing the provider, in what may be a signal that the agency is close to acting on more than 100 similar complaints about broadcast stations' using VNRs.
The FCC’s enforcement division announced the Comcast fine Monday night. It said Comcast’s CN8 news channel, which is seen in 20 markets, including New York, Washington and Philadelphia, on Nov. 11, 2006, ran most of a video news release produced by D.S. Simon Production for natural sleep aid Nelson’s Rescue Sleep.
FCC rules require TV stations and—at least according to the FCC—in some cases cable providers to disclose whenever they air something in return for consideration.
The FCC in April 2005 warned stations that even when no money changes hands, the use of well-produced VNR packages to fill out news programs can amount to consideration if the VNRs promote a particular product.
“Viewers are entitled to know who seeks to persuade them,” the FCC said at the time, adding that broadcasters have to clearly disclose “the nature, source and sponsorship” of the material they see.
The issue turned political shortly before the 2004 election when the Department of Health & Human Services produced a video news release for a Medicare prescription drug benefit not due to take effect until 2005; Democrats charged it was a thinly veiled political ad. A subsequent video news release by the White House anti-drug office further fueled the controversy.
The debate prompted the Center for Media & Democracy to do several studies of VNR use. That group and Free Press subsequently filed complaints with the FCC about 111 TV stations and cable providers running VNRs without identification, including Comcast.
Last night’s action was the first by the FCC on the complaints.
The FCC said Comcast never identified the video news release as having been provided by Nelson’s Rescue Sleep and, while Comcast didn’t get any financial remuneration, the segment’s use and the brand being mentioned amounted to consideration.
Sena Fitzmaurice, Comcast’s senior director of corporate communications, said the company is “perplexed” by the action.
“The relevant statute does not cover cable programming, and even if it did, CN8’s programming was entirely consistent with the statute,” she said. “The segments in question were chosen by journalists in the course of reporting, and Comcast received no consideration or benefit by using the material. We will reiterate these facts in our response.”
FCC Commissioner Jonathan Adelstein, who has called on the FCC to better ensure that product placement and use of VNRs gets disclosed, praised the FCC action.
"I applaud the decision to enforce our sponsorship identification rules, and to propose, for the first time, a forfeiture for the failure to disclose the sponsor of a video news release. Commission rules are clear: Viewers have a right to know who is trying to persuade them so they can make up their own minds about what they are presented. I applaud Chairman [Kevin] Martin’s leadership, and look forward to quick action on the many other pending video news release complaints."
Craig Aaron, communications director of Free Press, said the same VNR was run by Meredith’s KPTV in Portland, Ore., which also was mentioned in the group’s complaints.
“We are hopeful now that the FCC will move forward on our complaints on the broadcast stations,” Mr. Aaron said.
Barbara Cochran, president of the Radio-Television News Directors Association, said her organization stands by an earlier filing with the FCC that the commission’s interpretation of “consideration” and use of fines is “not how Congress intended the statute to be applied. This is not how the FCC has applied it in the past.”
Instead, the RTNDA, which believes the VNR statute applies only to instances in which a broadcaster has received actual consideration for airing an unlabeled video news release, should use its rulemaking process to allow all arguments to be fully aired.
The RTNDA is opposed to regulatory intrusion into newsrooms.
The Association of Business Communicators agrees. In a statement Tuesday, it said: "Like written press releases for the print media, VNRs have been important newsgathering tools for broadcast media for decades. VNRs are provided completely free of charge, and broadcasters or cable programmers are totally free, in their editorial discretion, to decide whether or not to use them in whole or in part. The material is often highly edited.”
The association continued: “The sponsorship identification law is clear. Congress has mandated that if material is provided for free, disclosure is compelled under limited circumstances. Both producers and broadcasters of VNRs exercise their discretion responsibly by applying internal guidelines for their use and source disclosure. However, government intrusion into protected freedoms of speech and the press is unnecessary. Absent compelling concerns, the government should refrain from inserting itself into the editing room.”
(12:15: Corrected amount of fine and added response from the Association of Business Communicators)
(3:45: Added comment from RTNDA)