FCC Proposes Changes to Sponsorship Identification Rules

Date: Jul 02, 2008

On June 26, 2008, the Federal Communications Commission ("FCC" or "Commission") released a Notice of Inquiry (NOI) and Notice of Proposed Rulemaking (NPRM) seeking comment on the relationship between the sponsorship identification rules and "embedded advertising." The NOI portion focuses on developing facts and information to determine if an additional rulemaking proceeding is warranted, and the NPRM formally initiates a rulemaking proceeding. Comments will be due 60 days after publication of the Notice in the Federal Register, and Reply Comments will be due 90 days after publication, which has not yet occurred.

Background: FCC Sponsorship Identification Rules

The current sponsorship identification rules require broadcasters to make sponsorship announcements in any programming for which "consideration" has been received, unless the sponsor's identity and the fact of sponsorship is obvious. With the exception of political broadcasts and matters involving a "controversial issue of public importance," the announcement must be made once during the program, and must remain on the screen long enough to be read or heard by the average viewer. Sponsorship announcements for political ads must have lettering equal to or greater than four percent of the vertical picture height, and air for not less than four seconds. In addition, any political broadcast matter or matter involving a "controversial issue of public importance" longer than five minutes for which any inducement is made for broadcasting the matter must include a sponsorship announcement at the beginning and the end of the program.

Issues for Comment

The NOI seeks comment on the following issues:

  • Current trends in embedded advertising, and whether any amendments to the sponsorship identification rules are necessary in light of new trends;
  • The First Amendment implications of any rule changes; and
  • Whether the rules should be extended to feature films aired by broadcast licensees and cable operators.

Through the NPRM, the FCC seeks comment on several important issues:

  • Whether sponsorship announcements should include a particular size lettering and air for a specified time period;
  • Whether existing rules and policies governing commercials in children's programming adequately address embedded advertising, or whether they should be revised to explicitly prohibit embedded advertising in children's programming due to a lack of "bumpers" between commercials and programs;
  • The application of product integration rules to cable television; and
  • Issues raised by radio hosts' personal on-air endorsements.