9 FCC Red No. 3 Federal Communications Commission Record DA 94-83

five days preceding election day. You also limited the Before the purchase of daytime rotator spots to no more than six Federal Communications Commission per day. Washington, D.C. 20554 2. The station did not appear to disclose to can didates, as required by Section 73.1942(b)( 1-4) of the Commission's rules: a) a description and definition of LETTER each class of time made available to commercial Janaury 24, 1994 advertisers; b) privileges related to lowest unit charge such as"priorities against preemption and make goods; c) the likelihood of preemption; and d) a Released: January 27,1994 description of time sold on a demand-generated basis. 1 CERTIFIED MAIL - RETURN RECEIPT REQUESTED Regarding KZTV's apparent limit on the number of K-Six Television, Inc. 1800C3-M spots purchased by federal candidates, you explained that Licensee of Television Station KZTV the purpose of the limitation was not to deny access but to 310 Artesian St. guarantee reasonable access. You argued that a first-come, Corpus Christi, TX 78401 first-served policy would not enable a station to provide reasonable access, and that the limitation was the fairest way to provide access and to prevent block booking by Dear Licensee: opponents. You also asserted that the proposed allocation of spots was never put into effect, and that the station This letter constitutes an admonishment for your failure never received a complaint about the limitation from a to comply with Section 312(a)(7) of the Communications political advertiser. Act (47 U.S.C. Section 312(a)(7)), as interpreted in Com With respect to KZTV's apparent failure to describe and mission Poticv in Enforcing Section 3l2(ai(7) of the Commu define all classes of time offered to commercial advertisers, nications Act, 68 FCC 2d 1079 (1978)("/97S Policy you asserted that the agencies placing orders for candidates Statement") and Section 73.1942(b)(l-4) of the Commis were "well acquainted with station rates and policies" and sion's rules (47 C.F.R Section 73.1942(b)(l-4)). that local agencies "have access to current prevailing rates," presumably eliminating the need for complete disclosure. You also stated that the political rate card "was designed BACKGROUND for the convenience of local candidates" so that they would This action results from the audit of KZTV. commenced not become confused by a "myriad of fixed, preemptible or June 10. 1992, to ascertain your compliance with the po multiple classes of time." litical programming laws. On that date, an FCC field in Regarding an apparent lack of disclosure of the likeli spector arrived at your station to obtain a copy of your hood of preemption, you responded that because the sta disclosure statement, if written, and your political file. tion had a policy of not preempting candidates, there was Based on the materials provided during the audit and your no likelihood of preemption to disclose. Similarly, regard September 30. 1992, response to our September 24. 1992. ing disclosure of the station's make-good policy and other letter of inquiry, we find that KZTV apparently imposed a priorities against preemption, you argued that candidates flat ban on the number of spots that could be purchased by could be preempted only for technical difficulties and that federal candidates, in violation of Section 312(a)(7) of the in such instances, candidates would be offered timely make Act. fn addition, we find that KZTV apparently failed to goods. Finally, concerning KZTV's apparent lack of disclo disclose to candidates information regarding its selling sure of demand-generated rates, you stated merely that practices in violation of Section 73.1942(b)( 1-4) of the "any so-called demand-generated rates can not be applied Commission's rules. You provided the inspector with a to political advertisers who are to receive only the lowest written disclosure statement entitled "Political Rate Card unit charge." Effective 1/25/92," and your political file. In our September 24. letter of inquiry, we posed several questions raised by our review of the materials provided by KZTV. We asked DISCUSSION you to explain how the following practices were consistent with the Communications Act and the Commission's rules and policies: Flat Bans on Spots Purchased by Federal Candidates Section 312(a)(7) of the Communications Act requires broadcasters to afford federal candidates reasonable access 1. Your political rate card limited all candidates, to their facilities or to permit the purchase of reasonable including federal candidates, to no more than two amounts of time. 47 U.S.C. Section 312(a)(7). In the /9~S' 30-second announcements in prime time during the Policy Statement, the Commission clarified its policy fn enforcing Section 312(a)(7). The Commission stated:

1 The Bureau's letter also asked about the 1991 and 1992 files had been removed to the Commercial Manager's office to political files which were not in the public file when the FCC update agency addresses and note that the files were provided field inspector arrived at the station. The 1992 files were pro promptly upon request. We find your explanation adequate, and vided to the inspector shortly after his arrival and the 1'Wl files will take no further action regarding this issue. were provided about five minutes later. You responded that the

599 DA 94-83 Federal Communications Commission Record 9 FCC Red No. 3

We believe it to be generally unreasonable for a cerning the lowest unit charges made available to licensee to follow a policy of flatly banning access by commercial advertisers, together with discount privi a Federal candidate to any of the classes and lengths leges associated by the broadcaster with those rates.6 of program or spot time in the same periods which the station offers to commercial advertisers.2 The pertinent disclosure requirements are codified in Section 73.1942(b)(l-4) of the Commission's rules, which Instead, all requests for time by federal candidates must require, at a minimum, disclosure of the following in be considered on an individualized basis. formation: KZTV's policy of prohibiting federal candidates from purchasing more than two 30-second announcements in (1) A description and definition of each class of time prime time during the five days immediately preceding the available to commercial advertisers sufficiently com election, and from purchasing more than six rotator spots plete to allow candidates to identify and understand per day, apparently violates Section 312(a)(7). As noted what specific attributes differentiate each class: above, the Commission has repeatedly emphasized in inter preting Section 312(a)(7) that a station cannot decide in (2) A description of the lowest unit charge and re advance how much time it will sell to federal candidates. lated privileges (such as priorities against preemption Rather, each request must be considered individually, tak and make goods prior to specific deadlines) for each ing into account the particular needs of each candidate. class of time offered to commercial advertisers; The pre-set limits adopted by KZTV thus appear to have (3) A description of the station's method of selling denied federal candidates the opportunity to purchase rea preemptible time based upon advertiser demand, sonable amounts of time in violation of the statutory access commonly known as the "current selling level," with provision.3 the stipulation that candidates will be able to pur Your assertion that no candidate complained about the chase at these demand-generated rates in the same limits does not establish that candidates were not denied manner as commercial advertisers; and their right to purchase reasonable amounts of time. Due to (4) An approximation of the likelihood of preemp your policy, a candidate who wished to purchase additional tion for each kind of preemptible time.' time during the days immediately preceding the election would have been deterred from making such a request. KZTV apparently did not disclose to candidates a substan Having read the limitation, candidates may not have tial portion of the required information. Your response known that they were entitled to ask for additional time, indicated that KZTV offered commercial advertisers three instead choosing to purchase other time periods for which classes of time: fixed, preemptible, and run-of-schedule. no limitation was imposed. 4 These classes of time were apparently not disclosed to candidates as required by Section 73.1942(b)(l). You ar Failure to Disclose gued, instead, that it was not necessary to disclose informa The Commission's 1991 Report and Order codifying the tion regarding the various classes of time offered to political programming laws specifically imposed affirmative commercial advertisers because the rate on the rate card disclosure obligations upon broadcast stations.5 The Com reflected the station's lowest unit charge for each time mission stated that: period available, and because the agencies representing candidates were either experienced or had access to the Political broadcasting obligations are imposed upon station's commercial rates. You also claimed that a rate station licensees, not on candidates and their repre card showing ail the rates would only have confused can sentatives. The representatives' or candidates' knowl didates. edge, or lack thereof, does not replace the As discussed above, however, the lowest unit charge broadcaster's obligation to offer candidates the bene obligations are imposed on stations, not on candidates, and fits of lowest rates and any associated discount privi a station may not tailor its disclosure to what it considers leges for the various classes and lengths of time and to be the relative expertise of the buyer.8 As a result, time periods. It is thus incumbent upon the broad KZTV's failure to disclose a description and definition of caster to disclose to candidates all information con all classes of time offered by the station, including the class

2 1978 Policy Statement, 68 FCC 2d at 1090. The Supreme 4 The two federal candidates who purchased time from the Court affirmed the Commission's prohibition against the use of station did not buy any time during either the prime time or flat bans in the sale of time to federal candidates. CBS, Inc. v. rotator time periods. FCC, 453 U.S. 387, 389 (\9K\)("CarterlMondale". Furthermore, 5 Report and Order, 1 FCC Red at 688-8^. in its recent Codification of the Commission's Political Program 6 Id. at 688. ming Policies, 1 FCC Red 678. 681. (\Wl)("Repon and Order"); 7 47 C.F.R. Section 73.l942(b)(l-4). Section 73.19.42(b)(5) re recon. denied, 1 FCC Red 4611 ( \W2)(" Memorandum Opinion quires disclosure of information about audience-delivery sales and Order"), the Commission reiterated its prohibition against practices, which are not the subject of this letter. the use of flat bans. Of course, if a candidate (or the candidate's representative) J A station is permitted, however, to consider such factors as does not wish an oral or written catalogue of available rates, it the number of candidates in a race and the potential disruption is sufficient that the station attempt to inform that candidate of to its program schedule when affording access, provided these its sales practices. In addition, after a station has once made full considerations are made on a case by case basis, and take into disclosure to a particular candidate or the candidate's repre account the needs of the candidate. For a discussion of the sentative during a given campaign, full disclosure need not various factors a station may weigh when considering a reason occur each time a buy is made, although any changes in rates or able access request, see Report and Order. 1 FCC Red 678, 6X1-2. other information that may arise subsequent to the initial dis-

600 9 FCC Red NO. 3 Federal Communications Commission Record DA 94-83 associated with the one rate listed on the political rate card, constitutes an apparent violation of Section 73.1942(b)(l) of our rules. Similarly, it appears that KZTV violated Section 73.1942(b)(2) by failing to disclose its make-good policy to candidates. This information was not contained in the rate card, nor do you assert that it was disclosed in any other manner. As set forth above, the rate card specifically states that fixed rates preempt rotation announcements. Whatever make-good policies were employed by the station in con nection with such preemption should have been disclosed to candidates and were not. in apparent violation of our rules. Regarding disclosure of the station's selling practices for demand-generated rates required under Section 73.1942(b)(3), you argue that this rule cannot "be applied to political advertisers who are to receive only the lowest unit charge." It is unclear from this statement whether the station uses a system of demand-generated preemptible time rates. However, and contrary to your assertions, can didates must be permitted to purchase at higher, intermedi ate preemptible rates, subject to rebates down to the lowest unit charge that actually clears during a particular time period. If such a demand-generated system is used, the availability of intermediate rates must be disclosed to can didates. Finally, your claim that you did not disclose the likeli hood of preemption because KZTV did not preempt political advertisers is inconsistent with the information disclosed to candidates on the political rate card. The po litical rate card specifically states that announcements placed on the station's rotation system available in prime time and daytime were subject to preemption by fixed rates. Yet, KZTV did not disclose the likelihood of preemp tion associated with the rotator class of time. If preemptible time is offered, this information must be disclosed to can didates, even if the likelihood of preemption is zero. KZTV's failure to disclose this information constitutes an apparent violation of Section 73.1942(b)(4).

CONCLUSION Based on the foregoing, we hereby ADMONISH you for the violations of Section 312(a)(7) of the Act and Section 73.1942(b)(l-4) of the Commission's rules. This matter will be made part of our permanent records. You should place this letter in the public inspection file required to be maintained by Section 73.3526 of the rules.

Sincerely,

Roy J. Stewart Chief. Mass Media Bureau

closure (or subsequent candidate transactions) must be disclosed during each succeeding negotiation. See Report and Order, 7 FCC Red at 68Q.

601