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New language for advertising contracts
Effective July 15 the FCC amended some of its rules, policies and application forms in an effort to expand the participation of minorities and women in broadcasting, and to bar race and gender discrimination in certain commercial practices.
One of the new policies requires broadcasters to add nondiscrimination clauses to their advertising contracts. At renewal time, a certification will have to be made in Form 303-S that all advertising contracts contain such clauses. Not complying with this new requirement could result in delays, fines or worse at renewal time.
Each broadcaster will be asked to certify in its next license renewal application that: (a) the broadcaster's advertising contracts do not discriminate on the basis of race or gender; and (b) such contracts contain nondiscrimination clauses. Its purpose is to combat long-rumored practices in the advertising business regarding “no urban/no Spanish” provisions which specify that commercials will not be run on stations that feature such formats. While the existence of such practices has not been conclusively established, anecdotal evidence has fueled concern for decades about the adverse effects such practices could be having on minority broadcasters.
Unfortunately, the Commission declined to provide, even for purposes of illustration, the text of an acceptable nondiscrimination clause. So exactly what language the FCC has in mind is not clear. At least one public interest organization has circulated a model clause that, in the organization's view, satisfies the new FCC policy. The suggested contract language provides, in the placement and scheduling of ads, and in compensating advertisers, there will be no discrimination on the basis of race, color, religion, sex, national origin, or on account of the language used on the air. It also includes a separate clause committing the broadcaster to periodic reports, notices to employees and training in nondiscriminatory policy compliance.
This type of clause is unnecessarily broad and could potentially open the door to claims against broadcasters who agree to the standards, and put them in their advertising contracts, but subsequently fail to follow through in implementing them. The following sample notice appears to comply with the new rule, although any specific language stations decide to adopt should be cleared with their own legal counsel:
Nondiscrimination Policy: [Broadcaster company name] and its Station[s] ___________ do not discriminate in advertising contracts on the basis of race or gender. Any provision in any order or agreement for advertising that purports to discriminate, or has the effect of discriminating, on the basis of race, gender or any particular language being broadcast, whether handwritten, typed or otherwise made a part of any such advertising contract, is hereby declared null and void.
In addition to adding such a nondiscrimination clause to all new contracts, radio stations should consider sending a mailing to existing advertisers, ad agencies and rep firms, explaining the need to amend current contracts to include the new clause.
Dec. 1 is the deadline for submission of biennial ownership reports by radio stations in Colorado, Minnesota, Montana, North Dakota and South Dakota.
On Dec. 1, radio stations with more than 10 full-time employees located in Colorado, Minnesota, Montana, North Dakota and South Dakota must electronically file their Broadcast EEO Mid-Term Reports (Form 397) with the FCC.
Also on or before Dec. 1, radio stations licensed in the following states must place their annual EEO Reports in their public files: Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, South Dakota, Vermont and Rhode Island.
Martin is a past president of the Federal Communications Bar Association and a member of Fletcher, Heald & Hildreth, Arlington, VA. E-mail email@example.com.
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