In announcing the fine last night, the FCC is sending a signal that it is close to acting on more than 100 similar complaints about broadcast stations use of these videos.
Video for natural sleep aid
The FCC's enforecement bureau said Comcast's CN8 news channel, which is seen in 20 markets, including in New York, Philadelphia, and Washington, ran a video news release on Nov. 11, 2006, produced by D.S. Simon Production for Nelson's Rescue Sleep, a herbal alternative to sleeping pills.
FCC rules require TV stations, and in some cases cable providers, to disclose whenever they air something in return for money, service or other valuable consideration. The FCC in April 2005 warned stations that even when no money changes hands, the use of video news releases to fill out news programs can amount to valuable consideration if the videos promote a particular product.
"Viewers are entitled to know who seeks to persuade them," the FCC said at the time. Broadcasters, it said, have to clearly disclose the "nature, source and sponsorship" of the material they see.
The issue turned political shortly before the 2004 election when the Department of Health and Human Services produced a video news release for a Medicare prescription drug benefit not due to take effect until 2005. Democrats charged that the video was a thinly veiled political ad for the Bush administration. Subsequently a video news release by the White House anti-drug office further fueled the controversy.
Groups file complaints
The Center for Media and Democracy along with another group, Free Press, eventually filed complaints with the FCC about 111 TV stations and cable providers running video news releases without identification, including Comcast. Last night's action was the first response by the FCC to the complaints.
The FCC said Comcast never identified the video news release as having been provided by Nelson's Rescue Sleep, and while Comcast didn't get any financial remuneration, the segment's use and the brand being mentioned amounted to compensation.
Sena Fitzmaurice, Comcast's senior director-corporate communications, said the company is "perplexed" by the action. "The relevant statute does not cover cable programming, and even if it did, CN8's programming was entirely consistent with the statute," she said. "The segments in question were chosen by journalists in the course of reporting, and Comcast received no consideration or benefit by using the material. We will reiterate these facts in our response."