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Underwriting Decision Could Have Broader Implications

FCC again rejects exception for KJZZ, KBAQ underwriting announcements

The FCC is again saying no to a proposed test of the boundaries between public broadcasting underwriting announcements and plain old radio/TV commercials. The case may have broader implications for noncoms.

Maricopa Community College District — licensee of KJZZ(FM) and KBAQ(FM), Phoenix — had wanted a waiver to conduct a “controlled” three-year experiment. The Media Bureau earlier said no; now the commissioners have issued a joint decision upholding that ruling.

Noncoms must identify program sponsors and avoid comparative or qualitative descriptions, such as saying a product is “the best.” Stations also must not air price. The goal of these rules is to remove market pressure faced by commercial stations from pubcasters.

Maricopa wanted to study the effect of underwriting announcements that included sales, discounts and qualitative adjectives. It wanted to know whether such announcements could increase revenue without harming program quality or upsetting listeners. It said it is worried about erosion of federal and state financial support, and it wanted to provide Congress, the FCC and other pubcasters with data to test the presumptions behind current underwriting guidelines.

The Media Bureau turned down this request in May, saying Maricopa’s financial situation isn’t sufficiently unique to warrant a waiver. Also, it said, the proposal could undermine an NCE’s purpose, and that FCC experiments are meant for technical, not programming, purposes.

The broadcaster appealed, calling the bureau’s action arbitrary and perfunctory; Maricopa also suggested the commission should revise the underwriting policies, which rely on old “untested” presumptions.

The full commission has now backed the bureau staff decision. The agency doesn’t agree with the licensee that the new announcements “merely push the envelope,” but rather, says they would be ads, which are prohibited on NCE stations.

Commissioner Ajit Pai agreed, saying Maricopa didn’t meet the standard to obtain a waiver. The Maricopa decision could have broader implications for public broadcasting, he notes; Pai didn���t say what those implications might be, but he said issues raised in the case would better be handled through an industry-wide proceeding.

He also questioned how some of the underwriting announcements on PBS are allowed, singling out Viking River Cruises, for an example, which touts “modern river cruises” in announcements that “obviously appears designed to entice viewers into taking a river cruise so they can be “transported…to another world.”