FCC Fines Fox $4,000 Over 2006 Video News Release

States VNR a violation of sponsorship rules

By John Eggerton -- Broadcasting & Cable, 3/25/2011 1:11:41 PM

Dismissing First Amendment and other arguments, the FCC Friday proposed fining Fox's KMSP-TV Minneapolis $4,000 for failing to identify a video news release it used in a June 2006 news story.

The FCC said that the station should have identified the GM VNR, in a story about new cars, and that failure to do so violated its sponsorship violation rules.

While Fox did not dispute that it had aired the VNR, it objected to the whole inquiry as an encroachment on its editorial discretion, which in this case was that no ID was required since Fox said that the station did not get or receive any consideration in exchange for the VNR and that using it was no different than using a press release, which the FCC has recognized does not necessarily require disclosure.

FCC rules require disclosure when anything is broadcast in exchange for "valuable consideration," but has interpreted that in the recent past as meaning that the VNR itself can be that valuable consideration being provided to the station (it takes the place of a story or segment that would have to be staffed and produced).

The commission also advised licensees back in 2005 - during controversy over the Bush administration use of VNR's to push its agenda - that the FCC rules "generally require them to clearly disclose the nature, source and sponsorship of program matter that they air, including VNRs."

The FCC's fining came down to the interpretation of the FCC's ID rules, which do allow for the use of VNRs without sponsorship ID's if "the company's products or services are clearly identifiable and shown fleetingly in a manner reasonably related" to the subject matter of the film." Sponsorship is required if "the company's products or services are 'shown to an extent disproportionate to the subject matter of the film.' Fox argued the former, while the FCC concluded the latter, dismissing the First Amendment argument about interfering with Fox's editorial judgment.  

"Although the Commission must avoid intrusion on a broadcaster's editorial judgments, it cannot abrogate its responsibility to administer statutes within its jurisdiction....The FCC said. "In sum, Fox has failed to demonstrate how the burden of responding to inquiries concerning whether Station KMSP-TV's aired sponsorship announcements can be credibly deemed to chill the Station's speech."

The complaint was filed by Free Press and the Center for Media and Democracy.

"We are reviewing the decision and will respond at the appropriate time to the FCC," said a Fox spokeswoman.