Underwriting Compliance Guide: 4. Other Prohibited Acts
4. Other prohibited acts
a. Requests from political campaigns
Section 399b of the Communications Act considers any message to support or oppose any candidate for political office as an advertisement. Therefore, noncommercial stations may not carry paid messages from candidates or in respect to ballot initiatives or referenda. These requests should be declined and the details of the request must be placed in your station’s political file and retained for at least 2 years. Section 399 of the Communications Act prohibits noncommercial stations from endorsing for or against any candidate for public office (regardless of whether they receive consideration or not). This also violates other federal and state laws.
b. Payola and plugola
Payola and Plugola goes back to the 1950s when record companies would pay disc jockeys or other station staff directly for the play of certain records. “Payment” was not always in cash but in other tangible items or non-tangible “services”. In these cases, it was never disclosed on the air that the record company was actually paying the radio station or a staff member in connection with the play of that recording.
Section 317(a)(1) of the Communications Act requires that:
All matter broadcast by any radio station for which any money, service or other valuable consideration is directly or indirectly paid, or promised to or charged or accepted by, the station so broadcasting, from any person, shall, at the time the same is so broadcast, be announced as paid for or furnished, as the case may be, by such person: Provided, That “service or other valuable consideration” shall not include any service or property furnished without charge or at a nominal charge for use on, or in connection with, a broadcast unless it is so furnished in consideration for an identification in a broadcast of any person, product, service, trademark, or brand name beyond an identification which is reasonably related to the use of such service or property on the broadcast.
In other words, if a station or a staff member receives any consideration as described above in connection with the playing of a record or for advertising an upcoming gig (plugola), then the sponsorship must be disclosed.
This is why it is important that all incoming consideration to a station goes through the proper channels so the station’s entire compliance plan can be properly applied.
c. Certain types of businesses with restrictions on messages
Stations should be aware of any state or federal laws outside of the FCC as well as any accepted guidelines within trade industries that may apply to acknowledgements involving certain businesses and products that may be otherwise controlled by such laws and regulations. This may include alcoholic beverages, smoking, gambling, adult oriented businesses, medical products. These laws and regulations may not necessarily differentiate between commercial advertisements and “acknowledgements” by noncommercial entities.
One of the recent issues is the controversy around medical and recreational marijuana due to the federal categorization of THC, regardless of the legal status of such products in specific states. There may also be controversies around CBD products, despite recent legislation that modified the product’s legal status. There are also controversies around the use of “vape” or e-cigarettes and the advertising of these products.
Because of the ongoing changes in laws and the “uncharted territory” where it comes in connection to these products, REC is not prepared at this time to provide any advice on underwriting announcements for dispensaries, pharmacies, smoking supply shops, head shops, cultivators, growers or distributors of THC and/or CBD products. Stations should consult with an attorney in respect to these lines of business prior to carrying underwriting announcements.
DISCLAIMER: THIS MANUAL WAS NOT WRITTEN BY AN ATTORNEY AND THEREFORE SHOULD NOT BE CONSTRUED AS LEGAL ADVICE. REC NETWORKS IS NOT RESPONSIBLE FOR ANY CONSEQUENTIAL DAMAGES THAT MAY ARISE FROM THE USE OF THIS MANUAL. THIS GUIDE IS BASED ON 20 YEARS OF KNOWLEDGE OF THE NON-COMMERCIAL (INCLUDING LPFM) BROADCAST SERVICE.