Thursday, May 25, 2006

FCC's Martin Orders Probe of TV Stations That Air Ads as News

May 25 (Bloomberg) -- Federal Communications Commission Chairman Kevin Martin ordered a probe of dozens of television stations after a report found they aired advertisements as if they were news reports, people familiar with the inquiry said. The April report by the non-profit Center for Media and Democracy found at least 77 stations, including 23 affiliates of Walt Disney Co.'s ABC network and seven Sinclair Broadcast Group Inc. stations, ignored an FCC warning to disclose sponsors. The maximum fine for each violation is $32,500, rising to $325,000 for multiple infractions, said FCC spokesman Clyde Ensslin.

``If the investigation leads to significant fines, the FCC could cause stations to put disclosures in place that make clearer the corporate role in local news,'' said analyst Blair Levin of Stifel Nicolaus & Co. in Washington. ``It depends how hard Martin wants to push it.''

The FCC warned TV stations in April 2005 they may be fined for airing news stories provided by the government and companies without disclosing who made them. The agency had received complaints about the use of videos provided by the Bush administration about topics including military success in Iraq.


A Sinclair-owned station in Oklahoma City, for example, aired five video releases exactly as prepared by their corporate publicist as if they were news reports, the research group said. . . While the companies properly disclosed their sponsorships, the stations stripped the disclosures before airing them, the report said.

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