Advertising Agreement Nondiscrimination Clause
March 22, 2011
The FCC has now released a Public Notice (copy attached - see highlighted section) clarifying its advertising agreement non-discrimination certification requirements.
Most importantly, the time period to which the certification will apply has now been set, and it is immediate, beginning (March 14, 2011) going forward.
Therefore, you should review all sales agreements to make certain that they contain non-discrimination clauses!
The FCC has not proffered any suggested language for an acceptable non-discrimination clause. The following language, however should be acceptable to meet the FCC’s requirements detailed below:
“The parties to this advertising agreement affirm that nothing in this agreement, or any of the actions, benefits and obligations relating to it, discriminate in any way on the basis of race or ethnicity.”
The FCC is at the beginning of a new round of license renewals. The license renewal application itself contains this certification that will be required of each licensee:
Non-Discriminatory Advertising Sales Agreements. Licensee certifies that its advertising sales agreements do not discriminate on the basis of race or ethnicity and that all such agreements held by the licensee contain nondiscrimination clauses.
The instructions to the License Renewal Application (Form 303-S ) state the following:
Item 7: Non-Discriminatory Advertising Sales Agreements. Applicants for renewal of commercial stations are required to complete the certification that their advertising agreements do not discriminate on the basis of race or ethnicity and that all such agreements contain nondiscrimination clauses. See Promoting Diversification of Ownership in the Broadcasting Services, Report and Order and Third Further Notice of Proposed Rulemaking, 23 FCC Rcd 5922, 5941-42 (2008); see also Third Erratum, 75 FR 27199 (May 14, 2010). Prohibited discriminatory practices include “no Urban/no Spanish” dictates. Broadcasters must have a reasonable basis for making this certification. If the response to Item 7 is “no,” please attach an exhibit explaining the persons and matters involved and why the matter is not an impediment to a grant of this application.
The FCC’s prior pronouncements had been unclear about when the requirement for including a nondiscrimination clause in advertising agreements would commence. This Public Notice has now set that issue to rest.
Further, the FCC’s requirement applies to all advertising sales agreements, whether local or agency buys. Stations should contact their agencies to receive assurances and sample agreements to be certain that appropriate language is now a part of each and all agreements, or any other understanding, broadcast advertising purchases on their stations. If orders are placed via an exchange of e-mail, a non-discrimination clause should become a standard part of the e-mail exchange. If orders are placed over the phone or orally, some written exchange between the station and the advertiser should occur as a confirmation of the order with the non-discrimination clause included.
This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.