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Texas case shows FCC is very serious about cigarette ad and sponsorship rules

An El Paso radio station cluster is paying a $15,000 “voluntary contribution” to the U.S. Treasury to settle a three-year long FCC investigation into tobacco product related advertising on two stations.

Townsquare Media admits no wrongdoing, but will be subject to a three-year compliance plan regarding the FCC’s sponsorship ID rules in addition to the “contribution.”

According to FCC documents, the FCC’s Enforcement Bureau received complaints alleging that KLAQ-FM aired advertisements that failed to identify the sponsor of the advertisement and the product advertised.

The complaints alleged that the advertisements were sponsored by The Cigarette Outlet, and that the station “intentionally omitted the sponsor of the announcements, whose name contains the word ‘cigarette,’ from the advertisements in order to avoid violating Section 73.4055 of the Commission's Rules and 15 U.S.C 1335, both of which prohibit the broadcast of cigarette advertisements.”

The then licensee, Regent Communications of El Paso, responded to an FCC letter of inquiry and confirmed that both KLAQ and KROD-AM had received money from The Cigarette Outlet as payment for the stations' broadcast of advertisements for The Cigarette Outlet store and that the stations broadcast the advertisements.

Regent further confirmed that the stations omitted both the word "cigarette" and the name "The Cigarette Outlet" from the ads.

The FCC said Regent acknowledged the applicability of the Commission's sponsorship ID laws to The Cigarette Outlet's advertisements but effectively denied violating those laws by arguing that it was unnecessary to include the advertiser's full name in the announcements because the "identity of each [a]dvertisement's sponsor and the fact of sponsorship of its business were obvious" due to the advertisements' inclusion of the address and phone number of The Cigarette Outlet, as well as directions to its only store.

The FCC disagreed and said the sponsorship ID laws establish the general obligation of a broadcast station to air sponsorship identification announcements whenever any "money, service or other valuable consideration" is paid or promised to the station for the broadcast of program material.

The FCC said the ID law also provides that in some circumstances, "when it is clear that the mention of the name of the product constitutes a sponsorship identification, the name of the product shall be deemed sufficient" to comply.

The commission said in this case, Regent failed to mention the "sponsor's corporate or trade name, or the name of the sponsor's product."

The compliance program agreed to by Townsquare requires the development of a multi-faceted plan of action meant to ensure all future ads meet the FCC’s sponsorship rules.

It includes employee training, an employee hotline to call when there are questions, management approval of spots and a checklist for employees to follow.

Click here for more about the specifics of the decision and how the FCC’s sponsorship ID rules were interpreted in this case.

Questions?  Contact TAB's Michael Schneider or call (512) 322-9944.

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