FCC fines Comcast $4,000 for airing 'fake news' reports Greg Wasserstrom

Published: Monday September 24, 2007





Print This Email This Cable giant Comcast violated the law by broadcasting video news releases without identifying them as sponsored programming, the Federal Communications Commission announced today. The ruling came in response to a complaint from Free Press and the Center for Media and Democracy, a media watchdog group focusing on VNRs. "In this Notice of Apparent Liability for Forfeiture (NAL), we find that Comcast Corporation (Comcast), which operates an affiliated regional cable network, CN8, is apparently liable for a forfeiture in the amount of four thousand dollars ($4,000) for violating Section 76.1615 of the Commissions rules," the FCC ruled (word doc link). The FCC ruling continued, "This rule generally requires cable operators engaged in origination cablecasting to make sponsorship identification announcements when presenting matter in return for money, service, or other valuable consideration. We find that Comcast cablecast portions of a video news release (VNR) produced on behalf of Nelsons Rescue Sleep without also airing required sponsorship identification announcements." "We're pleased to see the FCC is finally waking up to the issue of fake news," said Craig Aaron, communications director of Free Press. "But the fine levied against Comcast is just the tip of the tip of the iceberg. Video news releases dressed up as real news were uncovered at more than 100 stations. We hope the FCC will soon fine those stations and issue clear guidelines to end the epidemic of fake news once and for all." Rulings such at these by the FCC have become increasingly less frequent over the past seven years. At the same time, the use of VNRs has become more wide spread. General Motors, Intel, Pfizer and Capital One are among the companies who produced VNRs with the help of three PR firms, and "[m]ore than one-third of the time, stations aired the pre-packaged VNR in its entirety," according to Free Press. In April of 2006, RAW STORY reported on a study by a group that monitors the media which revealed that, over a ten month span, 77 television stations from all across the nation aired video news releases without informing their viewers even once that the reports were actually sponsored content. STORY AT THIS LINK. Excerpts from the press release: # Comcast's CN8 news channel -- which airs in 20 TV markets, including New York, Philadelphia and Washington, D.C. -- was caught by the Center for Media and Democracy airing at least four more VNRs without disclosure. However, today's announcement by the FCC contains no mention of those instances -- or the two broadcast stations caught airing the exact same VNR without disclosure. "The Commission's action against CN8 is precedent setting. It rejects the PR industry's argument that no disclosure is needed if the television station has not received direct payment to air a VNR," said Diane Farsetta of the Center for Media and Democracy, who conducted the group's extensive investigation on fake news. "The Nelson's Rescue Sleep VNR was remarkable for its shameless product promotion. But the FCC must require disclosure in all cases when a VNR is used, whether it's for a new product or a government policy. Viewers have a right to know who's trying to persuade them." # THE ENTIRE PRESS RELEASE IS AVAILABLE AT THIS LINK. Further excerpts from FCC ruling: # Under Section 503(b)(1) of the Act, any person who is determined by the Commission to have willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order issued by the Commission shall be liable to the United States for a monetary forfeiture penalty. To impose such a forfeiture penalty, the Commission must issue a notice of apparent liability, and the person against whom the notice has been issued must have an opportunity to show, in writing, why no such forfeiture penalty should be imposed. The Commission will then issue a forfeiture if it finds by a preponderance of the evidence that the person has violated the Act or a Commission rule. We conclude under this standard that Comcast is apparently liable for a forfeiture for its apparent willful violation of Section 76.1615 of the Commission's rules. Section 76.1615(a) of the Commissions rules makes clear that when a cable television system operator engages in origination cablecasting, it must identify the sponsor of a material whenever that operator accepts money, service or other valuable consideration to air that material. The phrase service or other valuable consideration, however, does not include service or property furnished without charge or at a nominal charge for use on, or in connection with a broadcast, unless such service or property is 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. Thus, while the proviso to the rule exempts service or property furnished without charge from the duty to announce the sponsor or source of such material, the exception to that proviso reinstates the duty when there is too much focus on a product or brand name in the programming. CN8s cablecast featuring Nelsons Rescue Sleep was part of a daily segment on Art Fennell Reports focusing on consumer issues. On September 21, 2006, the consumer-issues segment concerned non-prescription sleep aids. The segment featured only Nelsons Rescue Sleep, a commercial, natural sleep-aid product, and included portions of a VNR produced by D.S. Simon Productions on behalf of Nelsons Rescue Sleep. The VNR material used in this consumer-issues segment contains extensive images and mentions of the product and includes the statement that If you are one of the estimated 70 million Americans who have trouble sleeping - Rescue Sleep may be what youre looking for. We do not believe that this type of promotional material, furnished by a product manufacturer, can or should be considered within the scope of the proviso, which is directed to material that contains only fleeting or transient references to products or brand names. We conclude that even though CN8 received this material at no charge, it falls within the exception specifically set forth in the rule and that a sponsorship announcement was thus required. We therefore find that Comcast violated Section 76.1615(a) of the Commissions rules by willfully airing the VNR material at issue without proper sponsorship identification. The Commissions Forfeiture Policy Statement sets a base forfeiture amount of $4,000 for sponsorship identification violations. After considering the record and all of the factors contained in Section 503(b)(2)(D) of the Act, 47 U.S.C. § 503(b)(2)(D), and the Forfeiture Policy Statement, we believe a $4,000 forfeiture is appropriate in this case, which represents the base amount for the cablecast transmitted by CN8 on September 21, 2006.



