Originally published in Current, Jan. 28, 2002
By Mike Janssen

Managers at public radio stations are scrutinizing their partnerships with for-profit companies in the wake of a confusing FCC ruling against a North Carolina station.

The ruling, which slapped Spindale station WNCW for promoting a for-profit music festival on its air, also prompted a petition for reconsideration from NPR, the Development Exchange and the National Federation of Community Broadcasters (NFCB).

In its Dec. 5 [2001] decision, the FCC admonished WNCW for airing promos for the WNCW Mountain Oasis Music Festival, staged by the for-profit promoter A.C. Entertainment.

Because WNCW had received free tickets from A.C. Entertainment in exchange for the promotion, the FCC said the promotion amounted to illegal paid advertising. The commission was not moved by the station's argument that it gave away the tickets as donor premiums and listener prizes.

The FCC went even further, however, by venturing into a hypothetical situation. That's where some public radio observers say it went too far.

The agency ruled that even if WNCW had not accepted tickets, it intended to gain members by lending its name to the festival. Therefore, the agency said, the station was benefiting from promoting the festival rather than selflessly announcing an event its listeners might want to attend.

The decision clouds several matters for stations:

Acceptable underwriting. As everyone knows, public radio stations can't air advertisements--that is, promote businesses or events in exchange for economic consideration. But in their petition for reconsideration, the national groups say the FCC blurred that rule by suggesting some promotion could be illegal even in the absence of consideration.

". . .[A]bsent consideration, and contrary to the guidance set forth in the [Dec. 5] Order, there is no prohibition against the explicit promotion of transitory events sponsored by for-profit entities," the petition says.

Ticket giveaways. The FCC's ruling suggests that on-air hosts giving away event tickets must avoid promotional language, says NFCB President Carol Pierson. Otherwise, the host would be guilty of promoting an event for which they've received economic consideration in the form of tickets.

"Often, somebody from the festival or concert is on the show," she says. "If your language is restricted to underwriting language just by virtue of having received tickets to give away, that's pretty tricky."

Partnering with for-profits. Before the FCC's ruling, Dennis Green, g.m. at KCCK in Cedar Rapids, Iowa, was planning his station's first-ever jazz cruise. KCCK would benefit from treating its listeners and donors and would get a donation from the sponsoring cruise company for each cabin sold. But the cruise company hopes to profit as well, Green says.

"The wording of the FCC ruling is vague enough to make me wonder if we can do that," he says. "It's difficult with the WNCW case to tell what the crime was. Was the crime putting the public radio station's call letters--the nonprofit stamp of approval--on an event that was mainly a for-profit engagement by another company? Or was the problem having a relationship with a for-profit company that benefits both the company and the radio station?"

"If it's the second, then I think it calls into question practically everything we do in public radio," he says. "Everyone gets involved in activities because they hope to see some benefits." Even accepting promotional CDs from labels could be illegal, he says, since labels hope to profit by getting their music on the air.

For now, Green is forging ahead with the cruise, but promoting it only off-air. "It does seem a shame not to be able to use our primary method of communication," he says.

One fear is that the ruling could jeopardize all partnerships between noncommercial stations and for-profit entities. If a station has a presence at a for-profit event--a booth, for example--it might not be allowed to promote that event, since it stands to realize profit from hyping it.

"Clearly, the ruling goes exactly against a lot of the basic principles in community radio of involvement with the community," says NFCB's Pierson.

In the petition for consideration, the three national organizations asked the FCC either to clarify or retract its confusing statements.

In the meantime, managers at stations are, like Green, reconsidering their partnerships. Dana Davis Rehm, NPR's v.p. for member and program services, says the WNCW case was a hot topic at every regional public radio meeting she visited over the past month.

"The fact that stations are confused," she says, "has a chilling effect on what they do."

	To Current's home page
	Later news: Stations sponsor festivals in Kent, Austin, Buffalo.
	Outside link: FCC's December 2001 admonition to WNCW.

Web page posted Dec. 31, 2002
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