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FCC seeks comments on rules for ‘embedded advertising’

The Federal Communications Commission released notices of inquiry and proposed rule making June 26 regarding how its existing sponsorship identification rules may need to change to deal with the increased use of embedded advertising techniques in television.

In issuing the notices, the commission noted that the use of technology, such as DVRs, by consumers to bypass commercials in programming has led content producers to find “more subtle and sophisticated means” of inserting commercial messaging into programming. Existing commission rules require sponsor identification to “protect the public’s right to know who is paying to air commercials or other program matter,” the notices said.

At the heart of issue is the commission’s desire to balance the right of the public to know who is sponsoring a message with the First Amendment and artistic rights of programmers.

The commission noted that an FCC public notice released in 1960 requires sponsorship identification of “hidden” commercials embedded in interview programs. The FCC is seeking comment on how often embedded advertising is happening and in what forms.

The commission also seeks comment on several issues, including:

  • the effectiveness of existing rules in informing the public of product placement and integration in programming;
  • fulfillment of the obligation to inform by those preparing programming for broadcast;
  • whether or not broadcasters and cable operators are meeting their obligation;
  • whether embedded advertising fits into an exception from the sponsorship disclosure rule for instances in which “the sponsor is obvious;”
  • whether imposition of disclosure infringes on the artistic integrity of entertainment programming; and
  • whether disclosure requirements should apply to feature films.

The FCC also is looking for comments about how long and often sponsorship disclosure should be. The existing rule requires the sponsorship announcement happen once during a program and remain on screen long enough to be read by an average viewer. The commission wants comment on a proposed rule change requiring sponsorship ID announcements to have lettering of a certain size and to air for a specific amount of time. It also is seeking comment on whether sponsorship identification requirements for all paid announcements should be similar to the more stringent standards required for political ads.

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