Raising the VNR Issue at Tomorrow's House FCC Oversight Hearing

The Center for Media and Democracy and Free Press today issued the following letter to members of the House Subcommittee on Telecommunications and the Internet. All five FCC Commissioners will appear before the subcommittee tomorrow, as part of a hearing on "Oversight of the Federal Communications Commission."

House Committee on Energy and Commerce
Subcommittee on Telecommunications and the Internet
2125 Rayburn House Office Building
Washington, DC 20515

March 13, 2007

Dear Representative:

We write to you today to ask that you directly address the issue of video news releases (VNRs) with the Federal Communications Commission (FCC) at the March 14th hearing on "Oversight of the Federal Communications Commission." VNRs -- segments produced by PR firms that are designed to look like TV news stories -- are used pervasively by broadcasters across the country. The FCC has long held that "listeners and viewers are entitled to know who seeks to persuade them." Yet, nearly one year after receiving a detailed report on how television audiences are routinely presented with VNRs disguised as news, the FCC has yet to clarify disclosure requirements or sanction offending stations. We urge you to ask FCC Commissioners about the agency's apparent stonewalling on this issue.

Tomorrow's hearing before the House Subcommittee on Telecommunications and the Internet provides an important opportunity to ask FCC Commissioners why the agency has been slow to address VNRs and their impact on local TV news, the most popular news source in the United States. Most VNRs are commissioned by corporations seeking to promote products, burnish their image, or support favorable policies. TV stations then incorporate VNRs into their news programming, all too often without disclosing the source of the footage to viewers. Of the 140 VNR broadcasts captured during a two-part Center for Media and Democracy (CMD) investigation, in only two cases did TV stations offer clear disclosure. And yet the FCC has done little to correct the problem.

The FCC is fully aware of the controversy surrounding VNRs. In April 2005, the agency issued a Public Notice on VNRs (MB Docket No. 05-171), reminding broadcast and cable programmers "of their respective disclosure responsibilities under the Commission's sponsorship identification rules." The Public Notice also requested information on VNR production, distribution and broadcast. Although the comment period ended in June 2005, the FCC has yet to issue any response.

To inform the debate, CMD tracked some 200 VNRs -- roughly 1 percent of the PR industry's output over the 16-month research period. CMD identified more than 100 TV stations that had aired the VNRs, including those in New York City, Detroit, Los Angeles, Boston, Chicago, Miami and other major markets. Nearly 85 percent of the time, the aired news segment was wholly derived from the VNR. The negative impact on viewers is perhaps best illustrated by health-related VNRs, which frequently result in news segments overstating or misrepresenting the benefits of prescription drugs or over-the-counter supplements.

When the first part of CMD's study was released in April 2006, CMD and Free Press filed a formal complaint with the FCC. Nearly 40,000 citizens sent letters to the agency to express their concern about undisclosed "fake news." In May, FCC Chairman Kevin Martin's office announced the agency's intention to investigate. In August, the FCC sent letters of inquiry to the owners of the 77 TV stations named in the CMD report. Though the stations' responses were due by last October, the agency has yet to issue any findings.

The FCC's Public Notice and pending investigation are good first steps. However, without further action, the fake news problem will only worsen. The second part of CMD's study, released in November 2006, confirmed that TV stations -- including several under investigation by the FCC -- continue to air VNRs without disclosure. The current issue of Columbia Journalism Review documents yet another sector of the VNR industry: News stories produced, sometimes in their entirety, by healthcare companies (but often not disclosed as such).

Commissioners Adelstein and Copps have flagged undisclosed VNRs as a breach of broadcast and cable licensees' public interest obligations. Broadcasters have asked for clarification on the disclosure requirements for VNRs. Will the FCC honor viewers' "right to know," or will PR firms continue business as usual, playing "reporter" on behalf of their clients? We encourage you to raise this important issue with FCC Commissioners during tomorrow's hearing.

Thank you for your time and for your attention to this ongoing problem.

Sincerely,

Diane Farsetta
Senior Researcher
Center for Media and Democracy
www.prwatch.org

Frannie Wellings
Associate Policy Director
Free Press
www.freepress.net