FCC Revises Contest Disclosure Rules; Music and Sports Payola Next?

Last week, the FCC announced changes to its contest disclosure regulations, first crafted in 1976. The changes allow stations to disclose contest rules either on the air or online.
This is the culmination of a Petition for Rulemaking first filed by Entercom in 2012, which the FCC didn’t officially start ruminating on until last December. The proposal attracted fewer than 20 comments, most of them being broadcast companies and state broadcasters’ associations (although NPR was also in the mix) and all of whom supported the proposal.
In practice, instead of hearing a regularly-scheduled announcement of contest rules over the air (typically done once per day while a contest is ongoing), stations will only have to announce where the contest rules are online “periodically,” and maintain the online disclosure for at least 30 days after the contest has ended. The Report and Order gives broadcasters great latitude as to where the contest rules may reside online: they can be put on the station’s own website, the website of its licensee (i.e., corporate parent), or “any Internet website that is readily accessible to the public,” which could mean just anywhere, and they don’t have to give out the specific URL on the air.
FCC Chairman Tom Wheeler lauded the Media Bureau’s effort as “meeting consumer expectations about how to obtain important contest information and capitalizes on the Internet’s ability to efficiently disseminate information to the public.” Commissioner Mignon Clyburn cited “consensus in the record” as justification for the “reasonable guidelines” they’ve adopted.
And the two Republican Commissioners, Ajit Pai and Mike O’Rielly, also concurred: Pai made reference to Saved By the Bell and the fictional contest-rigging featured in one episode, while O’Rielly cited a blog post he wrote about the issue in June of last year as spurring the FCC to move on Entercom’s proposal.
The newsworthiness of this rule change is not particularly about contests themselves, but the policy precedent it sets for broadcasters to chip away at other disclosure requirements they curently must abide by. In March several broadcasters (including Entercom) filed another petition for rulemaking asking the FCC to adopt similar loose and online-only disclosure requirements for sponsored music and sports programming.
Just like the contest proposal, stations would only have to post disclosures about sponsored content online, and announce over-the-air that these disclosures exist in a similarly periodic fashion. Unlike the contest proposal, the music/sports payola proposal has attracted more than 200 comments, the vast majority from listeners and musicians who think this is a terrible idea.
That opposition may matter a little less now that a regulatory precedent has been set. You start with an innocuous step where there’s not all that much at stake: contests are far from money-makers like sponsored programming is. We’re highly unlikely to see a dramatic increase in the number of contests because of this disclosure rule-change, but the same can’t be said if a similar revision is made for music and sports payola. The only real difference between the two proposals at this point is the level of public scrutiny that they’ve attracted. That may or may not slow down the FCC’s consideration of changes to sponsored programming disclosure, but further vigilance is definitely warranted.