FCC underwriting rules challenged

Television Digest with Consumer Electronics, Jan 12, 1998

WTTW Senior Vp-Gen. Counsel Katherine Lauderdale wrote that FCC decision-making wasn't consistent with previous cases before Commission. NAL is "novel ruling," station said, "and public broadcasters were not adequately on notice" of new standards. "If not modified," filing said, "those findings will require significant changes in national and local station underwriting practices which will likely reduce funding of critical importance."

Station has reputation in PTV industry for skating near edge of fund-raising boundaries, and was chastised by FCC in 1995 for improper on-air fund-raising campaign. Recently, it was one of few PTV stations receptive to former PBS Pres. Lawrence Grossman's proposed "PTV Weekend" of 2 nights of weekly prime-time programining with commercials, proposal criticized by former FCC Chmn. Hundt last summer (TVD June 16 p7).

Perhaps greatest concern in industry is fact that one of 4 spots in question - for Prudential Securities - was fed by PBS. Bureau as result declined to include spot in its forfeiture decision, but stations remain liable for all underwriting they air. Despite fact that spot wasn't included In fine, WTTW devote(t nearly 3 pages of 9-page filing to defend it, which FCC found to be "call to action." PBS had told Commission in letter that language was instead "value-neutral" description of services. WTTW contended that "the Prudential announcement is similar to a wide variety of acknowledgments which have been broadcast nationally and locally for many years throughout the public broadcasting system."

PBS declined to file comments on Bureau's NAL, and Pres. Ervin Duggan said he's reluctant to discuss details of Prudential spot because FCC could take further action. Duggan, former FCC commissioner, did say Commission's underwriting guidelines "are less sharp and clear" than those of PBS. In its defense of PBS spot, WTTW took unconventional approach of comparing it with another PBS spot for Sprint: Business, claiming both make only "descriptive statement."

Some in PTV industry feel FCC action might be beneficial. "Within our system, we've been having an internal debate over underwriting for a year ad a half," Twin Cities PTV Pres.-CEO Jim Pagliarini told us, but FCC's forcing issue could be "a good thing." He suggested Forum of PTV CEOs created last fall (TVD Nov 10 p5) could take up issue at its first meeting' in March, and topic is "certain" to be on PBS board agenda at retreal Jan. 31-Feb. 1.

Many expressed surprise at what one general manager called Bureau's "hair-splitting." In filing WTTW quoted 1982 Commission Policy Concerning the Noncommercial Nature of Educational Broadcasting Stations as saying: "It may be difficult to distinguish at times between announcements that promote and those that identify. We only expect our public broadcast licensees to exercise their reasonable, good faith judgments in this regard."