United States Government Accountability Office
Report to Congressional Requesters |
September
2014
|
BROADCAST
TELEVISION AND
RADIO
Disclosure
Requirements for
Broadcasted Content
|
|
GAO-14-738
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|
Why GAO Did This Study
Television and radio
broadcasters air content, including advertisements and other programming, on
a variety of issues, some of which directly address their interests as
broadcasters. The FCC applies the Communications Act of 1934 to hold these
broadcasters to a basic principle—that the public should know when and by
whom it is being persuaded. Statutes and FCC regulations require licensed
broadcasters to publicly disclose information about sponsored content.
GAO was asked to assess disclosure requirements and
practices of television and radio broadcast stations that air content
intended to influence Congress. This report (1) describes the disclosure
requirements for
broadcasters that air
advertisements or programming that affect their interests and may be intended
to influence Congress, and any requirements to air opposing views, and (2)
assesses what is known about the number and fair market value of these
advertisements, and those of opposing views, aired from 2007 through 2012. To
conduct the work, GAO reviewed relevant statutes, regulations, and FCC orders
and interviewed agency officials and stakeholders, such as industry
associations. GAO also procured and analyzed private data on television and
radio advertisements on selected issues affecting broadcasters. Data from 2012
were the most current data available when we conducted our review.
What GAO Recommends
GAO is not making
recommendations in this report. FCC provided technical comments.
|
|
September 2014
|
BROADCAST TELEVISION AND
RADIO
Disclosure Requirements for Broadcasted Content
What GAO
Found
Disclosure requirements for
advertisements or programming on issues that affect broadcasters’ interests and
that may be intended to influence Congress, including its consideration of
legislation and related policy issues, depend upon several factors. Specifically,
Federal Communications Commission (FCC) regulations require that television and
radio broadcasters make an on-air announcement identifying the sponsor whenever
they broadcast content that is provided by or sponsored by another entity. In
addition, when broadcast material provided to a station by an outside party
involves the discussion of political or controversial issues, broadcast
stations are required to record information about this content in their files
(known as the “public file”) for public inspection even if no payment or other
consideration is provided. This information must be maintained in the public
file for at least 2 years. Thus, advertisements or other programming intended
to influence Congress could fall under these requirements. However, when
television or radio stations produce and air their own content—whether
advertisements, editorial content, or other programming— and no payment or
other valuable consideration is received from an outside party, no disclosure
requirements apply. Currently, there is no legal obligation for broadcasters to
air advertisements or programming presenting opposing views, including views
that do not align with broadcasters’ interests.
GAO identified two possible
types of sources—the public file and private data sources—for information on
the number and fair market value of relevant advertisements. However, due to
limitations of these data sources, GAO determined that information is not
available for a comprehensive assessment of relevant content aired from 2007
through 2012. For example, since broadcast stations are required to keep
information on broadcast material addressing political or controversial issues
in public files for 2 years, it precludes using public file records to conduct
research on the number or fair market value of these advertisements beyond a
2-year period. In addition, few private data sources have archival data on
these types of advertisements. However, one private data source with which GAO
contracted provided information on TV advertisements between calendar years
2007 and 2012 on selected issues. GAO selected four issues that affect
broadcasters’ interests, including spectrum allocation, which involves dividing
the radio spectrum into bands of frequencies used to provide all wireless
communication services, including television broadcasting. The contractor’s
data indicated that during this time period, television stations aired
sponsored advertisements on two of the four selected issues affecting their
interests—one of which was spectrum allocation—at least 2,646 times, ranging in
estimated cost from $6 to over $15,000 per airing. While GAO determined that
these cost estimates are reliable enough for the purposes of this review, it is
important to note these are estimates and do not represent what was actually
paid for these airings and therefore may not reflect other factors that could
affect costs, such as discounts a station may have offered. GAO was unable to
provide information on the number of radio advertisements aired due to limitations
in public and private data sources available.
United States
Government Accountability Office
Contents
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Letter
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1
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Background
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4
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Disclosure Requirements Depend upon Several
Factors and Broadcasters Are Not Required to Air Opposing Views
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8
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Information Needed for a
Comprehensive Assessment of
Advertisements Aired Is Not Available; However,
Broadcasters
Aired Some Relevant Advertisements
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10
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Agency Comments
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17
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Appendix I
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Objectives,
Scope, and Methodology
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18
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Appendix II GAO
Contact and Staff Acknowledgments 25
Tables
Table 1:
Number of Airings by Selected Issues and Sponsors, TV
Only, 2007–2012 13
Table 2: Media Markets, Stations, Network Affiliations,
and Dayparts for TV Advertisements Aired on Selected Issues,
by Sponsor, 2007–2012 14
Table 3:
Estimated Costs of TV Advertisements Aired on Selected
Issues, by Sponsor, 2007–2012 15
Table 4:
Description of Selected Issues Affecting Broadcasters’
Interests 21
Table 5:
Selected Potential Advertisement Sponsors and
Rationale for Inclusion 22
Page i GAO-14-738 Broadcast Disclosure Requirements
Abbreviations
BCRA Bipartisan
Campaign Reform Act of 2002
CMAG Campaign
Media Analysis Group
CRS Congressional
Research Service
FCC Federal
Communications Commission
FEMA Federal
Emergency Management Agency
NAB National
Association of Broadcasters
This is a
work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its
entirety without further permission from GAO. However, because this work may
contain copyrighted images or other material, permission from the copyright
holder may be necessary if you wish to reproduce this material separately.
Page ii
441 G St. N.W.
Washington,
DC 20548
September 17, 2014
The
Honorable Darrell Issa
Chairman
Committee
on Oversight and Government Reform
House
of Representatives
The
Honorable Mike Quigley
House
of Representatives
Television and radio broadcasters air content, including
advertisements and other programming, on a wide variety of issues, some of
which directly address their interests as broadcasters. Some members of
Congress have raised questions about whether broadcasters are properly
disclosing sponsorship information to the public in cases when television and
radio broadcasters air content that advocates on their behalf, especially in
instances in which this content is intended to influence
Congress. As we have previously reported, the Federal
Communications Commission (FCC) applies the Communications Act of 1934 to hold
television and radio broadcasters to a basic principle—that the public should
know when and by whom it is being persuaded.1 Statutes and FCC
regulations set forth requirements for licensed broadcasters to publicly
disclose information about sponsored content.2
You asked us to assess broadcaster disclosure
requirements and practices of television and radio broadcast stations that air
content intended to influence Congress. This report (1) describes the
disclosure requirements for broadcasters that air advertisements or programming
that affects their interests and may be intended to influence Congress, and any
requirements to air opposing views, and (2) assesses what is
1
Communications Act of 1934, as amended. Act of June
19, 1934, ch. 652, 48 Stat. 1064,
(Communications Act) (codified at 47 U.S.C. § 317). As
we use the term in this report,
“broadcaster” means persons engaged in over-the-air
transmissions as defined in 47
U.S.C. § 153(7). The origins of the sponsorship
identification rules date from the beginning of licensing of radio
transmissions in the Act of Feb. 23, 1927, ch. 169, § 19, 44 Stat. 1162, 1170,
sometimes referred to as the Radio Act. See GAO, Broadcast and Cable Television: Requirements for Identifying Sponsored
Programming Should Be Clarified, GAO-13-237 (Washington, D.C.: Jan. 31, 2013).
2
For the
purposes of this report, we are referring to FCC-licensed broadcasters
operating television and radio stations.
Page 1 GAO-14-738 Broadcast Disclosure Requirements
known about the number and fair market value of these
advertisements, and those of opposing views, aired from 2007 through 2012.[1]
To describe the disclosure requirements for broadcasters
that air advertisements or programming that affects their interests and may be
intended to influence Congress, including Congress’s consideration of
legislation and related policy issues, we reviewed relevant statutes,
regulations, and FCC orders specifying disclosure requirements for sponsored
content, as well as any requirements for television and radio broadcasters to
air opposing views. We also interviewed or corresponded with officials from the
FCC, selected television and radio broadcast stations, and relevant industry
associations representing television and radio broadcasters to obtain their
perspectives regarding these statutory and regulatory requirements.[2]
To determine what is known about the number and fair
market value of relevant advertisements[3] that aired from 2007 through
2012, we reviewed statutory and regulatory requirements and spoke with FCC
officials knowledgeable about these requirements to assess the extent to which
this information would be available from public sources.[4] After
determining that public information was not readily accessible, we procured and
analyzed data from the Kantar Media Campaign Media Analysis Group (CMAG)[5] on
advertisements that would affect television and radio broadcasters’ interests,
both those advertisements intended to advocate for broadcasters’ interests and
those presenting opposing views, for calendar years 2007 through 2012.[6] In
order to assess the reliability of these data, we conducted a review of
relevant academic literature, reviewed CMAG’s methodology for obtaining the
data, and interviewed academic experts who have used CMAG’s television data in
their research. We found that the data on television advertisements were
sufficiently reliable for our purposes; however, the radio data were not
comprehensive enough to determine the number or fair market value of
advertisements aired. Our analysis does not identify all advertisements aired
from 2007 through 2012 on policy issues that affect broadcasters’ interests due
to data limitations, but pertains to a selected set of issues. To identify and
select issues that would most likely be addressed by television and radio
advertisements, we reviewed broadcasters’ legislative policy priorities and
spoke with a variety of industry representatives and academic experts in
political advertising. See appendix I for a more detailed explanation of our
scope and methodology.
We conducted our work from April 2013 through September
2014 in accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.
FCC regulations require licensed broadcasters operating
television and
Background
 |
radio stations to publicly disclose certain information on air when broadcasting content has been provided without charge or sponsored by another party in exchange for payment or other valuable consideration. These sponsorship identification requirements generally apply to any program material for which the sponsor is not readily apparent, including advertising or other programming related to political or controversial issues.[7] In addition, broadcast stations are required to keep information about certain sponsored broadcast material in their files for public inspection (called the “public inspection file” or “public file”).10 This publicly available file includes information such as service maps and local public notice announcements, among many other items. The public file also includes a section called the “political file” that contains information pertaining specifically to political broadcast material, including political issue advertising. Until recently, the public inspection file has been available only at the station’s main studio. Members of the public can access the public inspection file at a television or radio studio during regular business hours. However, starting August 2012, FCC regulations required television stations to post most public file items on an FCChosted website, making the information more easily accessible to the general public.[8] FCC phased in the new online posting requirements for certain portions of the public file. Specifically, television stations affiliated with the top four national networks in the top 50 media markets were required to post their political file documents online as of August 2012, while all other television stations were required to post their political file
documents online as of July 1, 2014.[9] In issuing these
regulations, FCC stated that it was deferring considering whether to require
radio stations to post public file documents online until FCC has gained
experience with online posting of public files of television broadcasters.[10] On
August 7,
2014, FCC issued a Public Notice seeking comment on a
Petition for Rulemaking which proposed expanding the online public file
requirements to cable and satellite television providers.[11] In this public notice, FCC
is seeking public comment on that proposal, as well as the possible expansion
of these requirements to radio stations.
As previously mentioned, television and radio
broadcasters air advertisements and other programming on a wide variety of
issues, some of which may directly affect their interests as broadcasters. For
purposes of our study, we researched and selected four issues that affect
broadcasters’ interests and that would likely be addressed by television and
radio advertisements intended to influence Congress during the 2007 through
2012 time frame under review. To identify relevant issues about which
broadcasters may have aired advertisements, we reviewed the National
Association of Broadcasters’ (NAB) published legislative policy priorities from
the 110th through 113th Congresses and spoke with a variety of industry
representatives.[12] Brief
descriptions of the issues we selected are below. See appendix I for a more
detailed description of these issues and our scope and methodology.
•
Performance
Rights Act.[13]
Congress considered legislation during the 111th Congress that would have
expanded copyright protection for the public performance of sound recordings.
The proposed act would have required AM/FM radio stations that broadcast music
to pay a new statutory copyright royalty, and this royalty would have been
distributed to the copyright holder, performers, and musicians.[14] Radio
broadcasters and those who represent them generally opposed this legislation
while other interest groups—such as those representing performers and the music
industry—supported it.
•
Spectrum
allocation. Spectrum allocation involves segmenting the radio spectrum into
bands of frequencies that are designated for use by particular types of radio
services or classes of users.[15] In
general, broadcasters have concerns about attempts to reallocate spectrum and
want to ensure that broadcasters are not required to relinquish spectrum that
they currently hold. Other interest groups, such as those representing wireless
carriers, are in favor of opening up more spectrum for other uses, such as for
smartphones and other wireless devices.
•
Radio-enabled
mobile phones. Broadcasters have proposed that in order to enhance public
safety, Congress, FCC, the Federal Emergency Management Agency (FEMA), and the
mobile phone industry should consider ways to expand the availability of
broadcast radio service in mobile phones. The wireless industry has opposed
efforts to mandate these capabilities in mobile phones and has stated that they
are working in coordination with FCC, FEMA and other governmental stakeholders
to develop a mobile broadcast emergency alerting system compatible with
wireless systems.
•
Retransmission
consent. Congress passed legislation in 1992 that created a mechanism,
known as retransmission consent, through which local broadcast station owners
(such as local ABC, CBS, Fox, and NBC network affiliates as well as local
unaffiliated stations) could receive compensation from cable operators in
return for the right to carry their broadcasts.[16][17] The retransmission consent
provisions allow local broadcast stations and cable operators to negotiate for
payment or some other form of compensation in exchange for the cable operator’s
right to carry their content. In general, cable providers advocate for reform
of retransmission consent requirements while broadcasters oppose changes to the
current requirements.
In cases in which entities purchase time from television
or radio stations to air advertisements on specific policy issues, the fair
market value—or the price that a product or service would sell for on the open
market—can be assessed by obtaining information about the actual or estimated
price paid for these advertisements.[18] The cost of purchasing air
time in these instances varies depending upon multiple factors, such as the
market and season in which an advertisement might air, the station’s format,
the time of day, whether an advertisement must be aired at specific times, and
any discounts a station may offer for bulk advertisement buys, among others.
However, there may also be cases in which television and radio stations air
advertisements that they produce or are provided to them for free.[19] In
these instances, we determined that fair market value can be assessed using the
concept of opportunity cost—the price for which these “spots,” or individual
airings of an advertisement, could have been sold to another advertiser.
Disclosure
Requirements Depend upon Several Factors and Broadcasters Are Not Required to
Air Opposing Views
On-Air and Public File Disclosure Requirements for
Broadcasted Content
Depend upon Several
Factors
|
Specifically, FCC
regulations require that broadcasters make an on-air announcement whenever
they broadcast content provided or sponsored by another entity in exchange
for payment or other consideration.23 The
22
While on-air and public file disclosure requirements do not directly
address advertisements or programming that are intended to influence
Congress, these requirements do specifically address certain political and
controversial issue-related material. 23
47 C.F.R. § 73.1212(a). Exchange may be direct or
indirect and may include actual exchanges, promised exchanges, or acceptance
of payment or consideration. Consideration may include money, service, or
something else of value.
|
On-air and public file disclosure
requirements for advertisements or programming concerning issues that affect
television and radio broadcasters’ interests and may be intended to influence
Congress depend upon several factors.22 For example, on-air and
public file disclosure requirements for advertisements or programming regarding
certain types of issues apply only when content has been provided to a
broadcast station by another entity. When television or radio stations produce
and air their own content—whether advertisements, editorial content, or other
programming—and no payment or other consideration is received from an outside
party—no disclosure requirements apply. In addition, public file requirements
for program material that has been provided to broadcast stations by other entities
on certain issues of public importance, as described below, differ depending
upon whether air time has been purchased or the content has been aired free of
charge.
Broadcasters Are Not
Required to Air Opposing
Views
announcement must state that the content is sponsored, paid
for, or furnished by the entity that provided the content, among other things.[20] In
addition, when the broadcast material involves the discussion of a
controversial issue of public importance or a political matter, even if no consideration
is provided, broadcast stations must make an on-air announcement indicating who
furnished the material.[21] Thus,
advertisements or other programming intended to influence Congress could fall
under these requirements. Moreover, broadcast stations are required to record
in their public file information about the organization that provided the
content or consideration, specifically, a list of the chief executive officers
or comparable persons. This information must be maintained in the public file for
at least 2 years.[22][23]
In addition, the Bipartisan Campaign Reform Act of 2002
(BCRA) requires broadcast stations to maintain records of requests to purchase
broadcast time that communicates a message relating to any political matter of
national importance, including a national legislative issue of public
importance.[24] The
record should include specific information about the request to purchase air
time, such as the rate charged, the date and time of broadcast, and the issue
addressed, and this record must be maintained in the station’s political file
for at least 2 years. Stakeholders we spoke with, including FCC and NAB, told
us that broadcasters are responsible for making determinations on a
case-by-case basis as to whether an advertisement triggers these requirements.
Currently, broadcasters have no
legal obligation to air advertisements or programming that present opposing
views, including views that do not align with their interests. As part of FCC’s
deregulation of the broadcasting industry in the 1980s, in 1987 the commission
discontinued enforcement of the Fairness Doctrine, which had required
broadcasters to afford a reasonable opportunity for the presentation of
contrasting
viewpoints.[25] In
doing so, FCC concluded that the Fairness Doctrine had had a “chilling” effect
on broadcasters, making them less inclined to air programming treating
controversial public issues.[26] Since
that time, FCC has reiterated that the Fairness Doctrine is no longer in
effect.[27]
Information Needed
for a Comprehensive
Assessment
of
Advertisements
Aired Is Not Available; However, Broadcasters Aired Some Relevant
Advertisements
Public and Private Data
Sources Do Not Contain
Information Needed for a
Comprehensive
Assessment of
Advertisements Aired from 2007 through 2012
Public File
Private Data Sources
 |
We identified two possible types of sources for information on the number and fair market value of advertisements aired on issues that affect broadcasters’ interests and that may be intended to influence Congress— stations’ public files and private data sources. However, due to limitations of these data sources, we determined that information for a
comprehensive assessment of relevant advertisements aired
from 2007 through 2012 is not available.[28]
As discussed above, broadcast stations are required to keep
information on certain political or controversial issue advertisements in their
public files for 2 years,[29][30] so it
is not possible to use public file records to conduct comprehensive historical
research on the number or fair market value of these advertisements beyond a
2-year period.[31]
Moreover, while the public file must contain certain information about these
types of sponsored advertisements, public file records for these advertisements
may not include information on value if air time was not purchased. Thus, in
cases where an entity provides advertisements to broadcasters to be aired free
of charge, broadcasters’ public files would not necessarily provide information
that would enable an assessment of the fair market value of these
advertisements.[32]
We also identified private
companies that gather data on television and radio advertising for mostly
commercial purposes—such as to enable their clients to track industry trends—but
none of the data sources identified collect the information needed for a
comprehensive assessment
Television Advertisements on Selected Issues Ranged in
Value, but Data on Radio Advertisements Are Limited Television
of the number and fair market value of television and radio
advertisements aired from 2007 through 2012. We found several media companies
that record television and radio advertisements aired in certain markets and
compile data on when and where these advertisements are aired. However, only
one of these companies, CMAG, has archival data on political advertisements for
2007 through 2012 for television and radio advertisements, including cost
estimates for television advertisements.[33] While CMAG’s data provided
some information on relevant advertisements aired, the analyses of that data we
conducted are not comprehensive for a number of reasons.[34] For example, in order to
search CMAG’s database, we identified organizations that were likely to sponsor
advertisements on selected issues, but we cannot be certain other organizations
did not air relevant advertisements. In addition, we found no private data
sources that were comprehensive enough to assess both the number and fair
market value of relevant radio advertisements aired during the 2007 through
2012 time frame. For example, we determined that CMAG’s radio data were not
comprehensive enough for our purposes because these data cover fewer stations
in fewer markets than the television data and do not include cost estimates,
among other reasons.
Number of Advertisements
Between calendar years 2007 and
2012, television stations aired advertisements from selected sponsors on
selected issues at least 2,646 times, according to CMAG data. Specifically,
CTIA-The Wireless
Association[35]
sponsored two different television advertisements that specifically addressed
spectrum allocation, and NAB provided television advertisements to stations
that addressed the Performance Rights Act (1 advertisement) and spectrum
allocation (4 advertisements).[36] Table
1, below, shows the number of times these advertisements aired by issue and
sponsor. CMAG data did not identify television advertisements related to
radio-enabled mobile phones or retransmission consent provided by selected
sponsors from 2007 through 2012.
Table 1: Number of Airings by Selected Issues and
Sponsors, TV Only, 2007–2012
|
|
CTIA-The Wireless Association
|
National Association of
Broadcasters (NAB)
|
Total
|
|
Performance
Rights Act
|
0
|
62
|
62
|
|
Spectrum
allocation
|
1043
|
1541
|
2584
|
|
Total
|
1043
|
1603
|
2646
|
Source: GAO analysis of Campaign Media Analysis Group
(CMAG) data. | GAO-14-738
CMAG data also provided information about where and when
these advertisements aired. As shown in table 2 below, CTIA’s advertisements
aired exclusively in the Washington, DC media market, while the NAB
advertisements aired in 28 media markets, including Washington, DC.[37] Five
stations affiliated with five major networks aired the CTIA advertisements, and
59 stations affiliated with six major networks aired the NAB advertisements.
Both CTIA and NAB advertisements aired during all “dayparts.”[38]
|
Sponsor, 2007–2012
|
Table 2:
Media Markets, Stations, Network Affiliations, and Dayparts for TV
Advertisements Aired on Selected Issues, by
|
|
|
|
CTIA-The
Wireless Association
|
National Association of Broadcasters (NAB)
|
|
Media markets
|
1 – Washington, DC
|
28, including Washington, DCa
|
|
Number of stations
|
5
|
59
|
|
Network affiliations of stations
|
ABC, CBS, CW, Fox, NBC
|
ABC, CBS, CW, Fox, MNTV, NBC
|
|
Daypartsb
|
All
|
All
|
Source: GAO analysis of Campaign Media Analysis Group
(CMAG) data. | GAO-14-738
aOther media
markets in which these advertisements aired: Atlanta; Austin; Birmingham;
Boston; Burlington; Charlotte; Chattanooga; Columbia, SC; Des Moines;
Evansville; Green Bay; Greensboro; Greenville, SC; Harrisburg; Hartford;
Indianapolis; Johnstown; Knoxville; Little Rock; Mobile; Orlando; Portland, ME;
Raleigh; Shreveport; Springfield, MO; St. Louis; Tulsa; and Washington, DC.
b”Dayparts”
are the time segments that divide the day for advertisement scheduling
purposes, and daypart designations may vary by market, station, and
affiliation. Examples of commonly used dayparts include early morning, daytime,
and prime access.
Fair Market Value
According to CMAG’s data on cost estimates for television
spots[39]—which
provide estimates for each airing of an advertisement based on historical
averages and other characteristics—CTIA’s 1,043 relevant spots ranged in
estimated cost from $79 to over $15,000 per airing from 2007 through 2012, with
an average estimated cost of about $749 per airing and a total of over
$780,000.[40] NAB’s
1,603 relevant spots in the same time period ranged in estimated cost from $6
to over $2,000 per airing, with an average estimated cost of about $100 per airing
and a total of over $175,000 (see table 3). While these cost estimates are
reliable enough for our purposes, it is important to note these are estimates
and do not represent what was actually paid for these spots. As such, these
estimates may not reflect discounts a station may have offered for bulk
advertisement buys or whether the purchase agreement allowed the station
discretion on when to air the advertisements. Moreover, in cases in which
advertisements were provided to stations and aired for free, as in the case of
certain NAB advertisements, it is possible that the fair market value of at
least some of these advertisements is as low as $0, as described further below.
|
Sponsor, 2007–2012
|
Table 3:
Estimated Costs of TV Advertisements Aired on Selected Issues, by
|
|
|
|
CTIA-The
Wireless Association
|
National
Association of Broadcasters (NAB)
|
|
Number of airings
|
1043
|
1603
|
|
Average estimated cost per airing
|
$749
|
$109
|
|
Total estimated cost
|
$780,785
|
$175,274
|
|
Estimated cost range per airing
|
$79 -
$15,136
|
$6 - $2,206
|
Source: GAO analysis of Campaign Media Analysis Group
(CMAG) data. | GAO-14-738
As previously discussed, in cases where an entity
provides advertisements to broadcasters to be aired free of charge, we use the
concept of opportunity cost—the price for which these spots could have been
sold to another advertiser—as a measure of fair market value. For these
advertisements, CMAG’s cost estimates are an appropriate measure of fair market
value if we assume television and radio stations aired these advertisements in
spots and at times that were otherwise sellable to other advertisers. The economic
argument could be made that stations that aired NAB advertisements free of
charge considered it to be in their interest to air advertisements that
advocated on their behalf and that stations were therefore willing to forgo
profit in the near-term in order to advance their long-term interests. However,
researchers and broadcasters with whom we spoke stated that broadcasters would
be unlikely to air advertisements for free during time slots that they could
otherwise use for paid advertising because radio and television stations are
supported by the income they receive from advertising. In this scenario, the
fair market value of any advertisements aired would likely be $0, since
broadcasters would be airing advertisements in otherwise unsellable spots. While
we are unable to confirm either scenario, the CMAG data indicate that
broadcasters aired some of these NAB advertisements at times that would have
been unlikely to go unsold. For example, CMAG data identified NAB
advertisements that aired during programming such as the Sugar Bowl college
football game, a National
Basketball Association game, Wheel of Fortune, Glee, and
People’s Choice Awards.[41]
Radio Number
of Advertisements
Both NAB and CTIA aired radio advertisements on selected
issues from
2007 through 2012, according to data obtained from
CMAG—specifically, CMAG data show that broadcasters aired NAB radio
advertisements on the Performance Rights Act, radio-enabled mobile phones, and
spectrum allocation, and CTIA-sponsored advertisements on spectrum allocation.
However, as previously discussed, we are unable to provide comprehensive
information on the number of radio advertisements aired due to limitations in
public and private data sources available.
Fair Market Value
Due to a lack of sufficient information, we cannot
provide estimates of the fair market value of radio advertisements aired from
2007 through 2012.[42] As in
the case of television, the fair market value of these advertisements depends
on a number of factors such as the market, the station’s format, the time of
day, and seasonality, as well as whether the spots would have otherwise gone
unfilled.
While FCC’s 2012 regulations regarding online public file
requirements do not apply to radio stations, as previously discussed, the
regulations apply to television stations and require all television stations to
post public file items on an FCC-hosted website, making the information more
easily accessible to the general public.[43] Prior to the adoption of
these
|
|
requirements, reviewing a
station’s public file required traveling to a station’s main studio and
reviewing the files or paying for copies there. These new requirements will
make a more comprehensive review of broadcasters’ public files possible and
such reviews will become more convenient. As part of its rulemaking process,
FCC continues to facilitate an ongoing dialogue with broadcasters and other
industry stakeholders to seek comment on the impact of these online posting
requirements. As previously discussed, FCC recently issued a Public Notice
requesting comment on the possible expansion of the online public file
obligations of television stations to radio stations, and cable and satellite
television operators.[44]
|
|
Agency
Comments
|
We
provided a draft of this report to FCC for its review and comment. FCC
provided technical comments, which we incorporated as appropriate.
|
We
are sending copies of this report to the Chairman of FCC and
appropriate congressional committees. In addition, the
report is available at no charge on our website at http://www.gao.gov.
If you or your staff have any questions concerning this
report, please contact me at (202) 512-2834 or goldsteinm@gao.gov.
Contact points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Key contributors to this report
are listed in appendix II.
Mark Goldstein
Director,
Physical Infrastructure Issues
Appendix I: Objectives, Scope, and
Appendix I: Objectives, Scope, and Methodology
Methodology
This report provides information on broadcaster
disclosure requirements and practices of television and radio broadcast
stations that air content intended to influence Congress. Specifically, this
report (1) describes the disclosure requirements for broadcasters that air
advertisements or programming that affects their interests and may be intended
to influence Congress, and any requirements to air opposing views, and (2)
assesses what is known about the number and fair market value of these
advertisements, and those of opposing views, aired from 2007 through 2012.[45]
To describe the disclosure requirements for broadcasters
that air advertisements or programming that affects their interests and may be
intended to influence Congress, including Congress’s consideration of
legislation and related policy issues, we reviewed relevant statutes,
regulations, and Federal Communications Commission (FCC) orders specifying
on-air sponsorship identification and public file disclosure requirements, as
well as any requirements for television and radio broadcasters to air opposing
views.2 We also interviewed FCC officials, television and radio
broadcast stations[46] and
representatives from the National Association of Broadcasters (NAB) to obtain
their perspectives regarding these statutory and regulatory requirements.[47]
To determine what is known about the number and fair
market value of these advertisements, we reviewed statutory and regulatory
public file requirements to assess the extent to which information on the
number and fair market value of these advertisements would be available in
broadcasters’ public inspection files and spoke with FCC officials
knowledgeable about these requirements. After determining that it was not
possible to use public file records to conduct historical research on
advertisements from 2007 through 2012,[48] we sought private data
sources that would enable us to assess the number and fair market value of
these advertisements. We also conducted a review of literature on political
advertising, interviewed half a dozen academics who were selected because they
had conducted relevant research and had expertise in political advertising, and
spoke with representatives from all entities that we identified as possibly
having relevant data.[49] As a
result of our research, we determined that the Kantar Media Campaign Media Analysis
Group (CMAG) was the only vendor that could provide information on both the
number and fair market value of relevant television advertisements aired from
2007 through 2012, and was the only vendor that could provide information on
the number of relevant radio advertisements aired from 2007 through 2012.[50] CMAG’s
television data
cover over 980 stations in 210 media markets, and its
radio data cover almost 600 stations in 35 markets. We also identified a vendor
that may have been able to provide cost estimate information for radio
advertisements identified by other sources, but due to limitations of public
and private data on the number of radio advertisements aired, we decided not to
purchase these data.
We purchased CMAG data on both television and radio
advertisements on select issues pertinent to broadcasters and sponsored by
selected organizations for airing from 2007 through 2012. Our analysis does not
identify all advertisements on policy issues that affect broadcasters’
interests because of data limitations. To identify potential issues to include
in our study, we reviewed NAB’s published legislative priorities for the 110th
through 113th Congresses (2007 through 2014) and conducted general background
research, including interviewing researchers from the Congressional Research
Service (CRS). In addition, we interviewed or corresponded with representatives
from national industry associations and interest groups that had aired
advertisements or that were active in the public debate on policy issues that
might affect broadcasters’ interests.[51] To select issues for
inclusion in our study, we considered factors including the frequency with
which issues appeared in NAB’s published legislative priorities, whether issues
would have a clear economic impact on broadcasters’ interests, whether issues
have a clear proponent and opponent, and whether organizations we interviewed
were aware of any advertisements that aired on the issue. Based on these
factors, we selected four issues. See Table 4 for brief descriptions of these
issues.
Table 4:
Description of Selected Issues Affecting Broadcasters’ Interests
|
Issue
|
Description
|
|
Performance
Rights Acta
|
Congress considered legislation during the 111th Congress,
the proposed Performance Rights Act (H.R. 848), that would have expanded
copyright protection for the public performance of sound recordings. The
proposed act would have required AM/FM radio stations that broadcast music to
pay a new statutory copyright royalty, and this royalty would have been
distributed to the copyright holder, performers, and musicians.b
Broadcasters—specifically radio stations and those who represent
them—generally opposed this legislation while other interest groups—such as
those representing performers and the music industry—supported this
legislation.
|
|
Spectrum
allocation
|
The radio
frequency spectrum is a natural resource used to provide all wireless
communications services, such as television broadcasting. Spectrum allocation
involves segmenting the radio spectrum into bands of frequencies that are
designated for use by particular types of radio services or classes of users.c
In general, broadcasters have concerns about attempts to reallocate spectrum
and want to ensure that broadcasters are not required to relinquish spectrum
that they currently hold. Other interest groups, such as those representing
wireless carriers, are in favor of opening up more spectrum for other uses,
such as for smartphones and other wireless devices.
|
|
Radio-enabled
mobile phones
|
Broadcasters have proposed that in order to enhance public
safety, Congress, the Federal Communications Commission (FCC), the Federal
Emergency Management Agency (FEMA), and the mobile phone industry should
consider ways to expand the availability of broadcast radio service in mobile
phones and improve consumers’ access to information about radio-enabled
mobile devices. The wireless industry has opposed efforts to mandate these
capabilities in mobile phones and has stated that they are working in
coordination with FCC, FEMA and other governmental stakeholders to develop a mobile
broadcast emergency alerting system compatible with wireless systems that
will allow for the targeted real-time delivery of government-approved
alerts.
|
|
Retransmission
consent
|
Congress
passed the Cable Television Consumer Protection and Competition Act of 1992,
which created a mechanism, known as retransmission consent, through which
local broadcast station owners (such as local ABC, CBS, Fox, and NBC network
affiliates as well as local unaffiliated stations) could receive compensation
from cable operators in return for the right to carry their broadcast.d
The retransmission consent provisions included in the 1992 Act allow local
broadcast stations and cable operators to negotiate for payment or some other
form of compensation in exchange for the cable operator’s right to carry
broadcast content. As we have previously reported, there have been a few
instances when negotiations reached an impasse and resulted in signal
blackouts for cable subscribers.e In general, cable providers
advocate for reform of retransmission consent requirements, while
broadcasters oppose changes to the current requirements.
|
Source: GAO. | GAO-14-738
a
H.R. 848, 111th Cong., as
marked up by the House Committee on the Judiciary (2009). The Senate had a
companion bill—S. 379, 111th Cong. (2009).
b
See GAO, Telecommunications: The Proposed Performance
Rights Act Would Result in Additional Costs for Broadcast Radio Stations and
Additional Revenue for Record Companies, Musicians, and Performers, GAO-10-826 (Washington, D.C.: Aug. 4, 2010).
c
See GAO, Spectrum Management: Federal Relocation
Costs and Auction Revenues, GAO-13-472 (Washington, D.C.: May 22, 2013).
d
The Cable Television Consumer Protection and
Competition Act of 1992, Pub. L. No. 102–385, § 6, 106 Stat. 1460, 1482-1483
(1992), amending 47 U.S.C. § 325. See GAO, Telecommunications: Issues Related
to Competition and Subscriber Rates in the Cable Television Industry, GAO-04-8 (Washington, D.C.: Oct. 24, 2003).
e
See GAO, Statutory
Copyright Licensing: Implications of a Phaseout on Access to Television
Programming and Consumer Prices Are Unclear, GAO-12-75 (Washington, D.C.: Nov. 23, 2011).
In order to search CMAG’s database, we identified
organizations that were likely to have sponsored advertisements on selected
issues. To do so, we performed extensive online research to identify
organizations that were particularly interested in each of the selected issues
and interviewed representatives from NAB, broadcasters, and other interest
groups. In selecting which of these potential sponsors to submit to CMAG, we
considered the results of our research and interviews and applied professional
judgment to select the following organizations as potential sponsors (see table
5).
Table 5:
Selected Potential Advertisement Sponsors and Rationale for Inclusion
|
Organization
|
Relevant
issues
|
Rationale
for inclusion
|
|
National
Association of Broadcasters (NAB)
|
Performance Rights Act
Spectrum allocation
Radio-enabled mobile phones
Retransmission consent
|
NAB representatives stated that
NAB aired advertisements on the Performance Rights Act, spectrum allocation,
and radio-enabled mobile phones.
GAO research identified NAB as having been involved in the
debate about retransmission consent.
|
|
State
Broadcasters Associations
|
Performance Rights Act
|
GAO research identified several state broadcaster
associations involved in the debate about the Performance Rights Act.
|
|
Music
First Coalition
|
Performance Rights Act
|
Identified
by GAO research and interviewees as key organization in the debate about the
Performance Rights Act.
|
|
Radio One
|
Performance Rights Act
|
Identified by interviewees as
having aired radio advertisements about the Performance Rights Act.
|
|
WCLV
(a radio
station)
|
Performance Rights Act
|
Identified
by an interviewee as having produced at least one radio advertisement
opposing the Performance Rights Act.
|
|
CTIA—The
Wireless
Association
|
Spectrum allocation
Radio-enabled mobile phones
|
Identified by an interviewee as
having run advertisements on spectrum allocation.
GAO research identified CTIA as having been involved in the
debate about radio-enabled mobile phones.
|
|
Consumer
Electronics Association
|
Radio-enabled mobile phones
|
GAO research identified Consumers Electronics Association
as a key organization in the debate about radio-enabled mobile phones.
|
|
American
Television Alliance
|
Retransmission consent
|
Identified by interviewees as likely to have run
advertisements on retransmission consent.
GAO research identified the American Television Alliance as
a key organization in the debate about retransmission consent.
|
|
CBS
|
Retransmission consent
|
Identified
by an interviewee as having run advertisements on retransmission consent.
|
|
|
Appendix
I: Objectives, Scope, and
Methodology
|
|
|
Organization
|
Relevant
issues
|
Rationale
for inclusion
|
|
Clear
Channel
|
Performance Rights Act
Retransmission consent
|
Identified by an interviewee as having run advertisements on
retransmission consent.
GAO research identified Clear Channel as being involved in
the debates about the Performance Rights Act and retransmission consent.
|
|
Sinclair
Broadcasting Group
|
Retransmission consent
|
Identified
by an interviewee as having run advertisements on retransmission consent.
|
Source: GAO. | GAO-14-738
Using the list of potential sponsors we provided, CMAG
identified advertisements aired by these sponsors from 2007 through 2012 and
provided us with the audio/visual content of the advertisements. We reviewed
these advertisements and selected those advertisements that were potentially
relevant to our study. CMAG then provided occurrence information, such as date
aired, time aired, station, market, and program, for the selected
advertisements.[52] In
addition, CMAG’s television data include cost estimates for each advertisement
occurrence. CMAG estimates costs using information from a quarterly poll of
media firms and agency sources, together with historical program averages,
information about the market, station, and daypart,[53] and information from the
national broadcasting industry survey conducted each month by the
Television Bureau of Advertising. The radio data we
purchased from CMAG provide occurrence information—market, station, and time of
day, among other data points—for advertisements by selected sponsors on almost
600 stations in 35 radio markets. The radio data do not include cost estimates.
To assess the reliability of CMAG’s television and radio
data prior to our purchase, we conducted a review of relevant academic
literature, reviewed CMAG’s methodology for obtaining the data, interviewed
CMAG representatives and other data vendors, and interviewed academic experts
who have used CMAG’s television data in their research, as mentioned above. We
subsequently determined that the data were sufficiently reliable for our
purposes and purchased the right to use both the television and radio data.
After receiving and reviewing the television
Appendix I:
Objectives, Scope, and
Methodology
data, we found no anomalies and concluded that they were
sufficiently reliable for our purpose of determining the number of television
advertisements on particular issues provided by selected sponsors, as well as
an estimate of their fair market value. After receiving and reviewing the radio
data, we determined the data were not comprehensive enough for us to assess the
number and fair market value of relevant radio advertisements because these
data cover fewer stations in fewer markets than the television data and do not
include cost estimates, among other reasons.
We conducted our work from April 2013 through September
2014 in accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.
Appendix II: GAO Contact and Staff
Appendix II: GAO Contact and Staff Acknowledgments
Acknowledgments
GAO Contact
Mark Goldstein, (202)
512-2834 or goldsteinm@gao.gov
Staff In addition to the individual named
above, Ray Sendejas (Assistant Director); Namita Bhatia-Sabharwal; Melissa
Bodeau; Owen Bruce; Jean
Acknowledgments
Cook; Bert Japikse; SaraAnn
Moessbauer; Rebecca Rygg; and Nancy
Santucci
made key contributions to this report.
(543322)
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[1] Fair market value can be
defined as the price that a product or service would sell for on the open
market.
[2] We randomly selected a
sample of 10 television and 10 radio stations in the top 10 media markets to
interview—these markets included New York, NY; Los Angeles, CA; Chicago, IL;
Philadelphia, PA; Dallas-Ft. Worth, TX; San Francisco, CA; Boston, MA; Washington,
DC; Atlanta, GA; and Houston, TX. Representatives from one radio station and
one broadcast television station—both in the Washington, DC media market—agreed
to speak with us. One radio station located in the Boston media market provided
written responses to our questions. Some stations we contacted directed us to
speak with their parent companies—as such, we also spoke with representatives
from a major television network and a radio-broadcasting corporation.
[3] With regard to determining
the number and fair market value of relevant advertisements, we are referring
to advertisements that have been provided or sponsored by another entity in
exchange for payment or other consideration. Consideration may include money,
services, or something else of value. Information on the number and fair market
value of advertisements or other programming that has not been provided to
broadcasters by another entity is not included in the scope of this
objective.
[4]
We chose to assess what is known about relevant advertisements aired from 2007
through 2012 because after speaking to industry stakeholders we determined that
broadcasters and others were likely to have run advertisements on relevant
issues during this time frame, and therefore, information may be available to make
an assessment. In addition, we determined that it was unlikely that information
was available on other types of potentially relevant programming, such as
editorials on relevant issues. Information from 2012 was the most current data
available when we conducted our review.
[5]
CMAG, a subsidiary of Kantar Media, provides cost and content analysis for
political, public affairs and issue advocacy advertising.
[6]
Other types of content, such as commercial and political candidate advertising,
are not included in our scope.
[7]
Section 317(a)(2) of the Communications Act permits FCC to require a
sponsorship announcement for political and controversial issue programming
provided to a broadcaster without charge or at a nominal charge even if no
other consideration is provided. 47 U.S.C. § 317(a)(2). See, also, FCC’s rules
at 47 C.F.R. § 73.1212(d). FCC’s rules do not explicitly define what
constitutes a “controversial issue of public importance;” however, FCC has
defined it in the past as an issue “subject to vigorous debate with substantial
elements of the community in opposition to one another.” In re Complaint of Joint Council v. ABC, 94 FCC2d 734 (1983); see, also, Healey v. FCC, 460 F.2d 917, 922 (D.C. Cir. 1972). 10
These files give the public access to information about
stations’ operations and are intended to enable the public to play an active
role in the continuing dialogue with broadcast licensees regarding whether
broadcasters are fulfilling their obligation to air programming responsive to
the needs and interests of their communities. Public files must be maintained
by broadcasters. 47 C.F.R. §§ 73.3526 (commercial), 73.3527 (noncommercial).
[8]
Standardized and Enhanced Disclosure
Requirements for Television Broadcast Licensee Public Interest Obligations,
27 FCC Rcd. 4535 (2012).
[9]
In May 2012, the National Association of Broadcasters (NAB) filed a petition
with a US Court of Appeals for the DC Circuit seeking relief from the FCC
requirement for broadcasters to file political advertising information online
in their public files. Nat’l Assoc. of Broadcasters v. FCC, filed May 21, 2012
(DC Dir. No. 12-1225). An NAB request for a stay delaying the implementation of
the requirements was denied. Nat’l Assoc. of Broadcasters v. FCC (D.C. Cir. No.
12-1225, July 27, 2012). On September 18, 2012, the court granted NAB’s request
to defer the briefing schedule for its petition for review, and on January 18,
2013, NAB filed a further motion to hold its case in abeyance pending
resolution of its request for reconsideration at FCC. As of the issuance of
this report, this matter remained in abeyance. The public file and political
file data are available on the FCC hosted website at https://stations.fcc.gov/.
[10]
Standardized and Enhanced Disclosure
Requirements for Television Broadcast Licensee Public Interest Obligations,
27 FCC Rcd. 4535, 4537(2012).
[11]
Media Bureau Seeks Comment on Petition
for Rulemaking Filed by the Campaign Legal
Center,
Common Cause and the Sunlight Foundation Seeking Expansion of Online Public
File Obligations to Cable and Satellite TV Operators, Public Notice, DA
14-1149, 2014 WL 3887525 (Aug. 7, 2014).
[12]
NAB is a national trade association that represents television and radio
broadcasters and advocates for stations’ interests before Congress and the FCC.
[13]
H.R. 848, 111th Cong., as marked up by the House Committee on the Judiciary
(2009). The Senate had a companion bill—S. 379, 111th Cong. (2009).
[14]
See GAO, Telecommunications: The Proposed
Performance Rights Act Would Result in Additional Costs for Broadcast Radio
Stations and Additional Revenue for Record Companies, Musicians, and Performers,
GAO-10-826 (Washington, D.C.: Aug. 4,
2010).
[15]
The radio frequency spectrum is a natural resource used to provide all wireless
communications services, such as television broadcasting. See GAO, Spectrum
Management: Federal Relocation Costs and
Auction Revenues, GAO-13-472 (Washington,
D.C.: May 22, 2013).
[16]
The Cable Television Consumer Protection and Competition Act of 1992, Pub. L.
No.
[18]
More specifically, this is the price at which an actual willing buyer or seller
would agree upon, both being reasonably conversant with the facts and neither
being under any compulsion to buy or sell.
[19]
For example, during the 2007 through 2012 timeframe, NAB provided
advertisements to television and radio stations on specific policy issues that
advocated on broadcasters’ behalf, namely advertisements related to the Performance
Rights Act, spectrum allocation, and radio-enabled mobile phones. NAB did not
purchase air time and broadcast stations could choose whether or not to air
these advertisements.
[20] In addition, the
announcement must state by whom or on whose behalf the consideration was paid,
furnished, or promised. 47 C.F.R. § 73.1212(a).
[21] More specifically,
broadcast stations are required make an on-air announcement at the beginning or
end of the programming, if five minutes or less, and in both places, if more
than five minutes. 47 C.F.R. § 73.1212(d)
[23]
C.F.R. § 73.1212(e).
[24] Pub. L. No. 107-155, 116
Stat. 81 (2002), codified at 47 U.S.C. § 315(e).
[25]
Under the Fairness Doctrine, stations were generally given discretion in
deciding how they would present contrasting views. For example, a station might
air segments during news or public affairs programs or broadcast distinct
editorials. Anyone who believed that
a
station had failed to fulfill this obligation could file a complaint with the
FCC. Steve Waldman and the Working Group on the Information Needs of
Communities, The Information Needs of
Communities at 277 – 278 (2011).
[26]
Syracuse Peace Council v. WTVH, 2 FCC Rcd. 5043
(1987) (Memorandum Opinion and Order), recon. denied, 3 FCC Rcd. 2035
(1988).
[27]
Bodorff and Wilson, 2014 Westlaw 1871102 (Media Bureau May 8, 2014) (Letter
Opinion); In the Matter of Amendments of Parts 1, 73
& 76 of the Commission’s Rules, 26 FCC Rcd. 11422 (2011). The Fairness
Doctrine is distinct from what is known as the equal opportunity provision of
the Communications Act, which requires broadcasters to grant equal time to
qualified candidates for public office. See 47 U.S.C. § 315(a); see, also, 47
C.F.R. § 73.1941.
[28] As previously discussed,
when television or radio stations produce and air their own content—whether
advertisements, editorial content, or other programming—no disclosure
requirements apply.
[30]
C.F.R. § 73.1212(e).
[31] As previously discussed,
public file requirements generally apply to any sponsored program material
addressing certain political or controversial issues.
[32] While applicable
regulations do not require broadcasters’ public file records to include
information such as time aired that would enable an assessment of fair market
value when advertisements are to be aired free of charge, broadcasters may opt
to include such information. For example, NAB officials stated that, when they
provided advertisements to broadcasters to be aired free of charge, they also
provided pre-filled forms to be included in broadcasters’ public files. These
forms have spaces for broadcasters to provide information required by BCRA,
including information such as when the advertisements aired.
[33] CMAG focuses on
television political advertising and maintains archives of television
advertising information, including content, when and where the advertisements
aired, and cost estimates for the advertisements.
[34] CMAG’s data capture those
advertisements provided to broadcasters by other entities; advertisements or
other programming produced by broadcast stations are not included in CMAG’s
data.
[35] CTIA-The Wireless
Association is an international nonprofit membership organization that has
represented the wireless communications industry since 1984. Membership in the
association includes wireless
carriers and their suppliers, as well as providers and manufacturers of
wireless data services and products.
[36] NAB’s advertisements were
provided to television stations and aired free of charge.
[37] CMAG uses market
designations provided by Nielsen, a media research company. FCC uses these same
designations for a variety of purposes, including determining which stations
are in the top 50 markets for purposes of applying their online public file
rules.
[38] “Dayparts” are the time
segments that divide the day for advertisement scheduling purposes, and daypart
designations may vary by market, station, and affiliation. Examples of commonly
used dayparts include early morning, daytime, and prime access.
[39] As previously discussed,
spots are individual airings of an advertisement.
[40] CMAG estimates
advertisement costs using information from a quarterly poll of media firms and
agency sources, together with historical program averages, information about
the market, station, and daypart, and information from the national
broadcasting industry survey conducted each month by the Television Bureau of
Advertising. Academic experts on political advertising that we spoke with who
are familiar with CMAG’s data on advertising cost estimates generally agree
that these estimates are reliable enough for our purposes.
[41] Moreover, NAB
advertisements aired at all times of the day, including 154 airings during
prime time or prime access (the time slot immediately preceding prime time). In
comparison, CTIA advertisements aired 83 times during prime time or prime
access. However, NAB advertisements also aired more often at times that may be
more likely to go unsold. For example, NAB advertisements aired 249 times
overnight, whereas CTIA advertisements aired only 9 times overnight.
[42] Other companies may have
been able to provide cost estimates for radio advertisements identified, but
since data on the number of advertisements aired were not comprehensive enough
for our purposes, we did not purchase cost estimate data from these other
sources.
[43] Standardized and Enhanced Disclosure Requirements for Television
Broadcast Licensee Public Interest Obligations, 27 FCC Rcd. 4535 (2012).
[44] Media Bureau Seeks Comment on Petition for Rulemaking Filed by the
Campaign Legal Center, Common Cause and the Sunlight Foundation Seeking
Expansion of Online Public File Obligations to Cable and Satellite TV
Operators, Public Notice, DA 14-1149, 2014 WL 3887525 (Aug. 7, 2014).
[45] Fair market value can be
defined as the price that a product or service would sell for on the open
market, We chose to assess what is known about relevant advertisements aired
from 2007 through 2012 because after speaking to industry stakeholders we
determined that broadcasters and others were likely to have run advertisements
on relevant issues during this time frame and that therefore, information may
be available to make an assessment. In addition, we determined that it was
unlikely that information was available on other types of potentially relevant
programming, such as editorials on relevant issues. Information from 2012 was
the most current data available when we conducted our review. 2
As previously
discussed, broadcast stations are required to keep certain information about
sponsored advertisements in their files for public inspection (called the
“public inspection file” or “public file”).
[46] We randomly selected a
sample of 10 television and 10 radio stations in the top 10 media markets to
interview—these markets included New York, NY; Los Angeles, CA; Chicago, IL;
Philadelphia, PA; Dallas-Ft. Worth, TX; San Francisco, CA; Boston, MA;
Washington, DC; Atlanta, GA; and Houston, TX. Representatives from one radio
station and one broadcast television station, both in the Washington, DC media
market, agreed to speak with us. One radio station located in the Boston media
market provided written responses to our questions. Some stations we contacted
directed us to speak with their parent companies—as such, we also spoke with
representatives from a major television network and a radio-broadcasting
corporation.
[47] NAB is a national trade
association that represents television and radio broadcasters and advocates for
stations’ interests before Congress and the FCC.
[48] Specifically, broadcast
stations are required to keep information on certain political or controversial
issue advertisements in their public files for only 2 years, so it is not
possible to use public file records to conduct comprehensive historical
research on the number or fair market value of these advertisements beyond a
2-year period. Moreover, while the public file must contain certain information
about these types of sponsored advertisements, public file records for these
types of advertisements may not include information on value if air time was
not purchased. Thus, in cases where an entity provides advertisements to
broadcasters to be aired free of charge, broadcasters’ public files would not
necessarily provide information that would enable an assessment of the fair
market value of these advertisements.
[49] We spoke with
representatives from Competitrack, Kantar Media, Media Monitors, Nielsen,
ShadowTV, Spot, Quotations, and Data, Inc. (SQAD), and the Wisconsin
Advertising Project, as well as its successor, the Wesleyan Media Project.
[50] CMAG, a subsidiary of
Kantar Media, provides cost and content analysis for political, public affairs
and issue advocacy advertising. CMAG’s data capture those advertisements
provided to broadcasters by other entities; broadcaster-produced advertisements
or other programming are not included in CMAG’s data.
[51] These organizations
included the American Cable Association, CTIA—the Wireless Association, Free
Press, Future of Music Coalition, Music First Coalition, National Alliance of
State Broadcasters Associations, NAB, National Cable and Telecommunications
Association, National Religious Broadcasters, and the Recording Industry
Association of America.
[52] CMAG uses market
designations provided by Nielsen, a media research company.
[53] Dayparts are the time
segments that divide the day for advertisement scheduling purposes, and daypart
designations may vary by market, station, and affiliation. Examples of commonly
used dayparts include early morning, daytime, and prime access.
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