In the Second Report and Order on the Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations, in response to questions during a rulemaking proceeding regarding “program related products” (86 FCC 2d 141, 151-152 (1981), paragraph 31). On that subject, the Commission stated:
With respect to announcements promoting the sale of program related goods or services (for example, transcripts of public affairs programs), the Commission stated in the First Report and Order that it believed that such announcements to be overtly commercial where the cost of the goods or services was more than nominal or where the licensee, program producer, program supplier, or on-air personality had a financial interest in the sale. Accordingly, the First Report and Order included a proposed rule prohibiting such announcements with some exceptions. Under the rule adopted today, so long as the licensee receives no consideration for an announcement promoting the sale of the particular program-related goods or services or the price of the item is only nominal, such announcements may be broadcast.
The Oxford English Dictionary defines nominal as “Not substantial; very small in relation to an expected or required amount; token.”
This was written in an era before the internet and people could send away to get a transcript of a radio or television talk program. You may have heard these in the past (“for a written transcript of today’s show, please send $3 to…”). These days, with the internet and the archiving of programs, YouTube, etc., the need for such transcripts has gone the way of the dodo.
The FCC then addressed the elephant in the room (Id. at 152):
A different issue is posed where the promotion involves a non-broadcast interest of the licensee or other broadcast personnel. The Commission has long maintained that licensees have an obligation to prevent the use of their facilities to promote unfairly their own non-broadcast business interests (see also WFLI, Inc., 13 FCC Rcd. 2d 846 (1968)) and to take extraordinary measures to insure that no program matter is presented as a result of employee outside business interests which may conflict with their station responsibilities (see also Crowell-Collier Bc. Corp., 14 FCC 2d 358 (1966)). These principels are applicable to programming broadcast by public [NCE/LPFM] licensees and apply to offerings of program-related goods and services by program producers, program supplies and on-air personalities (see also Fordham Univ., 18 FCC 2d 209 (1969)). Accordingly, we expect licensees to carefully scrutinize goods and services offered in connection with various programs to assure that these program-related materials are offered on the basis of public interest considerations and not the private economic interests of the offeror.
So with that, it boils down to a question about conflict of interest. A show host cannot use their influence on an NCE/LPFM station to use that facility to promote their book, music release, upcoming live show, etc. The show producer simply cannot benefit financially from their appearance on an NCE/LPFM radio station. This also extends to guests through other interpretations of the Communications Act.
In the 1982 Memorandum Opinion and Order on this subject, the Commission clarified that consideration may be received if there are brief fundraising announcements for the nonprofit organization that provided the program as long as those announcements do not interrupt programming. In other words, the announcement must be made in a break in the programming, such as at the beginning or end of the program or during the intermission of a stage performance (such as the Metropolitan Opera).
In that same decision, the Commission also clarified that the provision of a radio or television program by an organization for the purposes of being aired on radio or television is, in itself, considered consideration (or remuneration) to the licensee.
This is not to be confused with the policy changes that were made in 2017 with Third Party Fundraising where programming may be interrupted to hold extended fundraising (i.e. radiothons and telethons) for bona-fide §501(c)(3) nonprofit organizations with a recordkeeping requirement and a limit to no more than 1 percent of the station’s total programming on an annual basis.
We note that the 2022 application by Pacifica Foundation to renew the license for WBAI, New York, NY was met with many challenges to the renewal claiming that show hosts were using the station to promote their products and services. Because these challenges were settled through a Consent Decree, the FCC did not address the specific questions about promotion that goes beyond program related materials for a nominal cost.
Our verdict (non-attorney opinion) is that show hosts cannot use their programs to promote any products or services that would provide the show host with any kind of financial gain, such as the promotion of a book, music or live appearance. Likewise, guests on a show cannot do that either. The only thing that can be offered is program related materials that are directly related to the program, such as a written transcript of what was discussed on the show and such a charge to the listener/viewer must be nominal.
