FCC Commissioner Jonathan Adelstein: Adamant About Ads

Adelstein Also Discusses DTV Transition, Minority Ownership

Democratic Federal Communications Commission member Jonathan Adelstein has made cracking down on deceptive advertising practices a key issue in his second term at the commission.

Since May 2005, when he made a speech accusing the media of “marinating children’s brains in advertising,” he has been committed to wiping out unlawful practices. As more than 100 TV stations and some cable operators face potential fines for unidentified video-news releases, Adelstein said disclosure remains the answer.

Adelstein fielded questions from B&C’s John Eggerton recently on a range of topics. He said he’s worried that mishandling of the digital-TV transition may result in a “tsunami of complaints,” and he addressed concerns about localism and minority ownership.

Q: A third complaint was just filed over an unidentified VNR. Why should broadcasters have to identify the sources of nonpolitical VNRs they don’t pay for?

A: Somebody did, in fact, pay for it, and they didn’t pay the production bills out of the goodness of their hearts.

Under the law, any valuable consideration up or down the chain of production requires disclosure. Even nonpolitical VNRs can be deceptive if they lead consumers to believe a segment to be honestly researched when, in fact, it was produced by a third party with a commercial or governmental self-interest.

It is unfortunate if some broadcasters and cable operators are unwilling to disclose when segments are produced by an outside party, even though disclosure is standard ethics practice, according to the Radio-Television News Directors Association. What are they trying to hide? Disclosure is the best policy.

Q: Does the FCC need to change its rules about product placement, and what are they, by the way?

A: Yes, we must review, and possibly update, our rules to reflect the realities of the marketplace. We may need to flesh out our rules. We need to have clear rules in place on the nature and duration of the on-air announcement, and the announcement needs to provide a meaningful disclosure, such as identifying the sponsor’s name in a manner that the average American will recognize.

Q: Sen. Herb Kohl (D-Wis.) introduced a bill to establish a task force, similar to one you suggested, to coordinate the DTV-transition-education campaign.

A: I applaud Sen. Kohl for taking leadership and looking out for the millions of American seniors who are affected by the DTV transition.

We only have one chance to do this right, and it is a mistake not to establish direct, coordinated federal leadership of this huge education effort.

The Government Accountability Office has bemoaned that nobody is in charge. The private sector has set up a coordinating body. Why shouldn’t the federal government do the same for the many federal agencies involved? A task force could help to coordinate and vet effective messages. It could help to prevent a tsunami of complaints from dumping down upon Congress, the FCC, the NTIA [National Telecommunications & Information Administration], broadcasters and cable operators.

Q: What should the FCC be doing that it isn’t to spur minority ownership?

A: The FCC should be doing everything in its power to spur minority ownership, which is at tragically low levels. Recently, I called for an independent, bipartisan task force on minority ownership. [That] would evaluate the many proposals that have been collecting dust at the FCC, some as far back as 1992. It would also explore new ideas, including leasing, that would ensure that a diverse group of voices reach American viewers.

The commission should focus on a truly comprehensive set of regulatory changes that would specifically -- not tangentially -- empower a diverse ownership of broadcast outlets.

Q: We have long heard complaints about the slow pace of the media ownership review. Now your colleague, Michael Copps, is concerned that it might be proceeding too fast to get out in front of the Tribune deal. What is your take on it?

A: It appears that the media-ownership proceeding is now moving on the fast track. There is no reason not to move expeditiously, so long as basic concerns are addressed in the order. Obviously, we need to address the lack of women and minority ownership before we consider allowing further media consolidation. And we need to implement meaningful steps to promote localism -- including any useful steps we hope will be recommended by the Localism Task Force -- before moving on this. In order to get this done, we need to move fast to constitute the independent panel I’ve suggested to review the 40-plus proposals by the FCC’s Diversity Committee, MMTC [the Minority Media & Telecommunications Council] and NABOB [the National Association of Black Owned Broadcasters] that have been sitting on the shelf for years. It is essential that we get our priorities straight and implement policies to address these major issues first.

Q: The chairman said last week that multicast must-carry may be crucial to Hispanics’ DTV future. Do you agree and do you support multicast must-carry?

A: I think that television programming that reflects any minority community is crucial, which is why diverse media ownership is important. It is not clear to me how this linkage works. Hispanic programming has perhaps the fastest growth of any segment in TV and radio. I think their future is very strong, and we need to take all appropriate steps to strengthen them further, and to enhance ownership opportunities by Hispanics.

Q: What do you make of this GAO study saying that the FCC is giving some lobbyists an advantage?

A: It is of great concern to me. The FCC must have an open and transparent process. The stakes are too high to let some parties have access to better information than others. The sad reality is that the biggest companies with the fattest lobbying budgets tend to get the best information.