The FCC has now released a Public Notice 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!
(See the attached PDF, with yellow highlighted section, at top right of this page)
The FCC has not proffered any suggested language for an acceptable non-discrimination clause. Broadcasters should consult their legal counsel to fashion language consistent with the certification requirement.
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 place via an exchange of email, a non-discrimination clause should become a standard part of the email 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.
— John Garziglia, Womble Carlyle Sandridge & Rice, PLLC