• Get involved.
    We want your input!
    Apply for Membership and join the conversations about everything related to broadcasting.

    After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
    If you use a disposable or false email address, your registration will be rejected.

    After your membership is approved, please take a minute to tell us a little bit about yourself.
    https://www.radiodiscussions.com/forums/introduce-yourself.1088/

    Thanks in advance and have fun!
    RadioDiscussions Administrators

Difference in underwriting and advertising

This can be a pretty iffy subject, but I wanted to bring this up for discussion because I wondered about this in concern of a local LPFM Christian station in our area.

By the license, the station is indeed a low power FM station, but also a non-profit station as well. Now, we know that does not mean they cannot make money at all, because even non profit ventures require money to pay bills. But the understanding I got was that they could "underwrite" the programs with businesses.

But where do you draw the line in "underwriting" and "advertising". There clearly is a difference that the FCC will allow, which means there are guidelines of what you can and can't do when it comes to "underwriting" time on a non profit radio station.

Generally speaking, I was under the impression that if a business wanted to sponsor, or "underwrite" a show on radio, only the very basics of information should be given. Any more than that, can constitute advertising, especially if there is any mention about the service or product. Let me share an example and see if I can get some response on this:

Lets say a radio station that is supposed to be non-profit gets funded by "Charlie's Tires and Brakes". (ficticious). To me, the right way to mention the underwriting would be like this:

"Today's program was underwritten by Charlie's Tires and Brakes, located on 123 Main Street"

Now if a phone number was given for the business, I would not get bent out of shape but I am not sure if that steps into advertising. Now the wrong way to do it might be like this:

"Today's program was underwritten by Charlie's Tires and Brakes, located on 123 Main Street. If you need new tires or need to have your tires rotated, or need your brakes checked, Charlie Jones is the man to see. He's been in business for 30 years and knows everything there is to know about tires and brakes. That's Charlie's Tires and Brakes, located on 123 Main Street."

To me, the second one sound exactly like advertising, and it defeats the purpose of even saying "underwriting". It's not underwriting because you SAY it's underwriting.

So where are the lines drawn when it comes to this type of advertising. I mean in the most general of terms, underwriting IS a a form of advertising, but the FCC does have limits to what a non-profit radio station is supposed to do. What do you think?
 
Noncommercial stations can have anything but a call to action.

Your example was perfectly legal. "Charlie sells new tires at 123 Main Street is legal... "Go see Charlie at 123 Main Street for your new tires" is not legal... that's where the line is drawn.
 
Let me jump in here as something of an "expert," having done years of selling both advertising and underwriting. If you really want a fairly legalistic explanation, the FCC website does have a synopsis. I think if you google "underwriting" and "FCC" you can find a link.

The basics are that underwriting announcements are technically an acknowledgement of support--a "thank you" to companies or organizations making a contribution to a non-commercial operation.

Underwriting copy (and visuals on TV) are not supposed to contain language or images that convey ideas that are qualitative, comparative or promotional. So, nothing about "the best," "biggest," or "Halloween Sale." That last notion--promotional--is where a "call to action" is prohibited. But "calls to action" are not the only things that are no-no's.

Are these rules followed? Oh......... sometimes. Are they ignored. Uh.... yeah. Does the FCC every once in awhile slap a fine on some little non-commercial station just to get everybody's attention? Yup.

Truth is, there are thousands of instances every day across the country of underwriting announcements that would seem to be crossing these lines. And there are hundreds of non-commercial operations across the country that are actively selling commercials because they either don't understand the rules or they don't care and/or don't figure they'll ever get caught.

Then again, major commercial radio group owners have been flouting the ownership caps for a dozen years by having shell companies own and operate their "extra" stations in markets all over America--even within a short drive of the FCC's front door in downtown DC.

We're in the De-Regulated World, now. Forget about the rules. Just do whatever you want!
 
Something most people don't know about underwriting is that there are no limits on length. There is nothing to stop a non-commercials station from running a 60 or 30. Public stations (and PBS and NPR) have always advocated for keeping them as short as possible, but that is mostly because they're afraid of pissing off their members, the people who send in checks during the beg-a-thons. Many of the misconceptions about underwriting have come from NPR & PBS, which would prefer to be perceived as "non-commercial" and are very defensive about it.

Also, the language restrictions only apply to for-profit companies. Non-profits, including universities, hospitals, performing arts centers and even mutual insurance companies (yeah, like Mutual of Omaha) can run regular commercials on non-commercial radio and TV. No restrictions, at all.

As for the for-profit underwriters, many of the same commercials that they run on commercial radio and TV are perfectly okay to use as underwriting announcements, too. "Institutional"-type ads, for instance. If it doesn't say they're the biggest or best or mention a sale, then there's no reason it can't run, as-is.
 
Another issue is the difference between "underwriting" and "a station promotion" for the non-commercial stations.

As an example, I operate a small travel business on the side - specializing in customized group trips. This summer, I agreed to work with a small, local church, to put together a trip to Washington DC. The church couldn't come up with enough people to make it work, so I did a mailing to my regulars, and did some underwriting on a non-commercial, FM in the Winston-Salem area to promote this "family-friendly" trip.

My announcement met all the guidelines and there was no call to action.

Meanwhile, the station was promoting a bus trip to a gospel convention. My dull and drab "underwriting" announcement would often be followed by the station's promotion using all of the standard advertising techniques - "this is the the biggest, best bargain you will ever find, we'll have more fun than a barrel of monkees, call today and reserve your space before all the seats are gone" - I got one phone call, and no bookings. The station sold out their trip.

Needless to say, I won't be doing any "underwriting" in the future.
 
The difference between commercial and non-com advertising is qualified by three basic rules. In non-com ads you CANNOT:

1)Compare price-"only 19.95" or "best prices anywhere"

2)Compare quality-"Best seafood in town" or "Best gas mileage"

3)Call to action-"Come on down to Joe's used cars today"
"Come in for a test drive" or "Call today"

You can say "This is brought to you by Joe Alcoke Lincoln Mercury, HWY 17 South in New Bern where service is our specialty and fine Lincoln cars are sold"
 
ALOT of Non Coms push the envelope on this too!

There is a non commercial FM, WOWL 91.9 Burnsville/Corinth, MS whos board are the same folks that operate WADI-FM, a commercial station in the same town. WOWL and WADI are in the same building, and WOWL has a very commercial sounding AC/Oldies format.

I also know a Non Commercial Community station up in New England that is well known for REALLLLY pushing the envelope on underwriting and actually got fined when someone submitted a recording of a spot that crossed the line... fined $2000, but reduced to $1000.
 
There are certainly some stations in Eastern NC pushing the envelope...Great information guys..I learned alot in this post..but of course I don't know too much either....I've heard several GM's over the years question one station in particular..I used to hear "I'm gonna tape them and send it to the FCC". I don't know if anyone ever has or not...I like this station because I love the reverb in the processing....

Allen
 
If anyone ever gets the chance, listen to WUBN 106.9 and see if their spots are over the line or legitimate. I know they carried the Carolina Mudcats last summer and the spots inside those games seemed to clearly be across the line. Still don't know how they got the Mudcats to provide games on a station that barely covers the town. From what I understood, they used to do games on WLLY and left because they wanted larger coverage.
 
Actually WUBN-LP ran Wilson Tobs Baseball this past summer, not the Carolina Mudcats.

And yes, the in-game spots were not really 'non-com' in nature.

I think that the FCC would be more interested in call-to-action ads during WUBN's main programming than the play-by-play guy's ignorance of the rules. If you've ever heard Pastor/Prophet/President Cavin Suggs tout his own bookstore or church on the air, then you've heard a commercial. It doesn't matter if they are themselves 'not-for-profit', you can't run ads!
 
ToddJenkins said:
Actually WUBN-LP ran Wilson Tobs Baseball this past summer, not the Carolina Mudcats.

And yes, the in-game spots were not really 'non-com' in nature.

I think that the FCC would be more interested in call-to-action ads during WUBN's main programming than the play-by-play guy's ignorance of the rules. If you've ever heard Pastor/Prophet/President Cavin Suggs tout his own bookstore or church on the air, then you've heard a commercial. It doesn't matter if they are themselves 'not-for-profit', you can't run ads!

The baseball spots are one thing, the preacher's pitch is another. "Non-profit" isn't just a casual description you can tag yourself with if you feel so inclined, it's a legal designation relating to the IRS Tax Code. Churches are all NP's, and therefore they can run flat-out commercials or program-length pitches all they want on non-commercial radio.

"For-profit" entities are not allowed to run commercials on non-comms--they are limited to "underwriting" announcements. But "non-profit" entities are not bound by those same rules. They CAN run ads, and they do--legally.
 
amfmxm said:
ToddJenkins said:
Actually WUBN-LP ran Wilson Tobs Baseball this past summer, not the Carolina Mudcats.

And yes, the in-game spots were not really 'non-com' in nature.

I think that the FCC would be more interested in call-to-action ads during WUBN's main programming than the play-by-play guy's ignorance of the rules. If you've ever heard Pastor/Prophet/President Cavin Suggs tout his own bookstore or church on the air, then you've heard a commercial. It doesn't matter if they are themselves 'not-for-profit', you can't run ads!

The baseball spots are one thing, the preacher's pitch is another. "Non-profit" isn't just a casual description you can tag yourself with if you feel so inclined, it's a legal designation relating to the IRS Tax Code. Churches are all NP's, and therefore they can run flat-out commercials or program-length pitches all they want on non-commercial radio.

"For-profit" entities are not allowed to run commercials on non-comms--they are limited to "underwriting" announcements. But "non-profit" entities are not bound by those same rules. They CAN run ads, and they do--legally.

Uh, churches can't run commercials or program length pitches on non commercial radio at all... non commercial radio is that, NO COMMERCIALS.
 
I did some reading on this topic recently and I was struck that in some sources, there was a new term introduced: "enhanced underwriting". I don't know if this was simply some verbiage that the groups promoting LPFMs came up with on their own, or if the FCC actually introduced the idea of Enhanced Underwriting.

Several years ago there was a real push by those (conservatives?... others?) who are opposed to any tax money going into public broadcasting that Public Radio should learn to become self supporting. There have been reductions in the amount of tax money going to the overall public broadcasting apparatus, and NPR in particular has become rather innovative and bold is merchandising CDs and some other fund raising mechanisms.

I haven't found the documentation to back this up, but I get the feeling that some kind of new understanding (official or possible off-the-cuff) was worked out that the restraints would be relaxed a bit, and not-for-profits would be given a little more wiggle room. Is there anything to back up this wiggle room idea? Does Enhanced Underwriting tie into that transition?

Realizing there is not enough money in my retirement monies to fund the purchase of a traditional station, this year I decided to look at the world of LPFM. Do I want to be ready if they open up the Application Window?

If I do, I have a concept for dealing with local merchants that would probably result in some FCC correspondence and maybe a hearing before the FCC. As one of my employees once told me: "Boss, there is more than one way to skin a cat. /insert pause here/ But however you do it, the cat ain't gonna like it."
 
There appears to be some confusion over "non-com" and "non-profit".

Non-Com or more clearly Non-Commercial refers to those stations on frequency 88mhz-
92mhz,the allocation for "educational" channels. They have the aforescribed limitations
on ad content but have more lax restrictions on things such as studio rules etc. The presumption is no one makes a profit such as a shareholder so relaxing some rules like studio location won't materially effect the commercial stations.But the restrictions on ad content prevent "on the street" compettion for sales dollars since those of us on 92mhz-
107mhz are feeding our families or paying shareholders. There are some exceptions. If a non-profit owns a station in the commercial band they may elect to ask the FCC to classify that station as a "non-com" for adminisrtative reasons. They will have the ad resrictions as a non com but the advantage of more lenient studio location rules.
If they don't want to be an adminstrative non com, since they are in the commercial band they can act like the rest of us.

Non-Profit ,on the other hand is an organizational type whereby there is no specific ownership of the organization. There are Board Members who control but no shareholders. When it dissolves, the assets must go into another non-profit.
The net proceeds of operations are not taxable as long as they come from activities stated in its charter and are used for "charitable" purposes ie education(churches), feeding the hungry, grants for community projects,etc. Non-profits can own commercal or non-commercial stations.
They can make a profit and run a commercial station the same as anyone else and they will not be taxed as long as they use the proceeds for charitable works. However, by virtue of the fact that they have no shareholder and they are not owned by anyone and by law they must use their profits for charitable work, only they are allowed to own stations in the non-com allocation of 88-92mhz.

So, non-coms can own stations in the commercial and non commercial bands and they have all the rights and rules as anyone else within those same bands unless they want to voluntarily restrict themselves on the commercial band and "act" like a non commercial station in exchange for studio flexibility. Think a Raleigh non profit owning a commercil FM in New Bern. If they choose to request special status they can put their studio in Raleigh but they will have to abide by non profit rules on ad content.

Finally, you are required to be a non profit in order to own an LPFM but if the LPFM is in the commercial band (92-107) you have the same rights including ad content as all other
commercial stations!
 
papadoc said:
Finally, you are required to be a non profit in order to own an LPFM but if the LPFM is in the commercial band (92-107) you have the same rights including ad content as all other
commercial stations!

I question the correctness of this statement. LPFM cannot carry typical commercial-radio-style commercials, no matter WHERE on the dial they are located.... if I have done my research correctly.

For all practical purposes there are no LPFMs in the educational band (88.7 - 91.9 Mhz). Maybe 8 out of over 900 LPFMs.
 
Goat Rodeo Cowboy said:
papadoc said:
Finally, you are required to be a non profit in order to own an LPFM but if the LPFM is in the commercial band (92-107) you have the same rights including ad content as all other
commercial stations!

I question the correctness of this statement. LPFM cannot carry typical commercial-radio-style commercials, no matter WHERE on the dial they are located.... if I have done my research correctly.

For all practical purposes there are no LPFMs in the educational band (88.7 - 91.9 Mhz). Maybe 8 out of over 900 LPFMs.

LPFM's are NON COMMERCIAL, NO MATTER who owns them or what frequency they are on.. commercial band or not!

Not only can a non profit own them, but so can a governmental agency.
 
Calvin Suggs' name was mentioned in a previous post..Now there is a name I haven't heard in years...Quite a guy...Quite a guy...

Allen
 
Let me chime in on the non-comm language.

In my research for a non-comm station, I read through all of the case documents that the FCC has released on this topic. The big four rules, call to action, qualitative (best in town), comparative (better than Joe's), and price, are upheld by the FCC in each of the cases.

However, the "promotional" language is where it gets tricky. In the case documents it lists the lyrics of each of the "underwriting mentions". Many times I found that the FCC's definition of "promotional" is different with each FCC agent. You can download the documents from differing cases and cross compare them and find "underwriting mentions" that were not tagged as illegal, that would be illegal using another case's rules. (case and point, it's ok to mention that someone is a CPA or MD, but not a registered real estate broker (one's a government issued office))(most of the time the FCC will bold or underline the offending passages in the case documents) There have been several times where the language of an "underwriting mention" was not bad, but the implication was cited as "promotional." However, this does not hold true for all of the cases throughout the years.

I have made a list of things not to say or do. Most of it is right out of the offending "underwriting mentions":

calls to action
qualitative / comparative language
price information
persuasive language
expressions or viewpoints
favorable
beginning questions
implied value
giveaways
descriptions of staff personnel
“convenient”
certified / authorized / endorsements
“state of the art”
“free”
#1 for the area
“fresh”
“friendliest” / “friendly”
“quality”
warranty descriptions
“fine”
“help you out”
“match price”
“very experienced” / “a lot of experience”
rebates / discounts
“dependable”
“fast”
“offer ends”
“successful”
“effective”
“fixed rates” / IRP rates
specials
“delicious”
“terrific”
“oldest in the area”
specific models
menu listing (more than 3 items)

Here's a list of proper terms I've compiled"

organization and company name
name of subsidiary, or operating division
address
phone number
website
hours of operation
number of years of operation
value-neutral description of products, goods, and services
products or services offered or sold
brand names of products
product line without adjectives
slogan / logo phrase (non qualitative)
“ten area locations”
identify inventory or services
“transitory” entertainment events
CPA / MD

This is what I came up with after a full Saturday of work, with a highlighter and a laser printer.
Let me know if this helps.
 
Status
This thread has been closed due to inactivity. You can create a new thread to discuss this topic.


Back
Top Bottom