The Washington Post Comments on Broadcast Indecency Fines

Six-Figure Fines For Four-Letter Words Worry Broadcasters
By Frank Ahrens
Washington Post Staff WriterTuesday, July 11, 2006; A01

Last month's tenfold increase in broadcast indecency fines has sent radio and television stations and media giants scurrying to protect themselves, as the cost of uttering a dirty word over the air has turned a minor annoyance into a major business expense.

The new law is a boon for companies that make time-delay machines for broadcasters, which are designed to catch offensive language before it hits the airwaves, and a potentially powerful reason for performers, directors and producers to take their talent to cable and satellite outlets, where federal decency standards do not apply.

Since President Bush signed a law in June upping the maximum Federal Communications Commission indecency fine to $325,000, business has spiked at California-based Prime Image Inc., which makes an electronic box that lets television stations edit out offensive language. Orders for the device have jumped to nearly three dozen from an average of less than one per day, and the company has increased production to keep up.

Other repercussions from the escalating crackdown on broadcast indecency: On-air personalities at one radio giant are contractually obligated to pay indecency fines if they say anything that causes their stations to be penalized. Lawyers at another radio company are advising superstar deejays on what material to avoid on air. Public television, still puzzling over a March fine for a Martin Scorsese-produced documentary, is sending periodic legal advice to its member stations.

One stand-up comedian took out an indecency-liability policy on himself. Another said he was forced to sign a waiver before he went on the air at a radio station, promising to pay any indecency fine that might result from his appearance.

Parent groups pressured Congress to do something after the brief exposure of singer Janet Jackson's right breast during the 2004 Super Bowl halftime show. Members of Congress quickly drafted bills to raise the amount the FCC could fine radio and television stations for broadcasting indecent material.

But bills in both houses stalled in 2004 and 2005. This May, Majority Leader Bill Frist (R-Tenn.) picked up one version of the legislation and sped it through the Senate. The House passed it soon after, and on June 15, Bush signed it into law, raising the ceiling on indecency fines from $32,500.

Under the law, cable channels such as MTV and HBO and satellite radio companies such as Sirius and XM remain unpoliced by the federal government.

Advocates of the higher penalties said small fines had not deterred big broadcast companies, such as CBS and Fox, from airing indecent material. In addition to raising the ceiling for a single instance of indecency, the law allows the FCC to fine a broadcaster as much as $3 million a day for multiple violations.

"This is like a blessing for us," said Prime Image chief executive Peter J. Jegou. The company's devices, which provide a time delay and a "dump button" to zap offensive language and images, cost $9,000 for standard-definition television and $12,000 for a high-definition version. "People are saying, 'Oh, for $12,000, we can avoid a $325,000 fine?' You don't have to be a rocket scientist to figure that out."

The same is true at Symetrix Inc., which makes a $2,399 device that allows radio stations to delay their broadcasts to catch objectionable material. "We'd been wondering what was going on," said Dan Gallagher, executive vice president of global sales and marketing for the Mountlake Terrace, Wash., company. "Sales have been skyrocketing."

Broadcast companies are taking further measures protect themselves by training their talent and cutting them loose at the first sign of trouble. Radio giants such as Clear Channel Communications Inc. have adopted "zero-tolerance" policies for on-air personalities, meaning that they can be fired for offensive language even before an FCC fine is levied.

Further, Clear Channel -- the industry's largest radio chain with more than 1,200 stations -- has reworked its talent contracts to include "indemnification language," said Andy Levin, executive vice president for government affairs. Translation: If a Clear Channel host says anything that prompts an FCC fine, that host -- not Clear Channel -- is responsible for paying.

Indianapolis-based Emmis Communications Corp. worked to contain further damage after it paid $300,000 in 2004 to settle its radio fines, prompted largely by the morning-drive star of its Chicago station, Erich "Mancow" Muller.

Emmis corporate counsel David O. Barrett has become known as the indecency czar, traveling to the company's 25 U.S. radio stations and briefing general managers, program directors and talent. It's a tough job, Barrett said, because the FCC provides no clear guide to what can and cannot be said. The agency says such rules would amount to unconstitutional prior restraint of free speech.

Emmis created a computer-based training program on indecency -- similar to sexual-harassment training tutorials common in workplaces that are meant to indemnify employers -- that all relevant radio employees must complete. And the company recently sent a notice to all of its stations, reminding them that the indecency fines just went up to $325,000, or as Barrett puts it, "a lot of money, even for a big broadcast company."

PBS has been attempting to interpret the FCC's indecency guidelines for its member stations for more than a year, said Lee Sloan, a spokeswoman. "But it's a moving target," she said.
On March 15, California public television station KCSM was fined $15,000 for airing a profanity-laced documentary on bluesmen, produced by Scorsese. KCSM is appealing the proposed fine, and PBS is taking the unusual step of filing an additional brief with the FCC arguing that documentaries should have special status under indecency guidelines, especially now that fines are higher. In KCSM's filing, Scorsese expressed "deep concern over the adverse impact that the FCC's actions will have . . . on the ability and willingness of filmmakers to produce authentic documentaries and other valuable programming for presentation on broadcast television."
Even before Congress increased the indecency fines, performers, producers and directors saw signs that they interpreted as the long-feared "chilling effect" on free speech and artistic expression. Last summer, it seemed likely that Congress would raise the indecency fine to $500,000, and broadcasters and performers were bracing for it.

Comedian Ralphie May, whose act often includes sexually oriented material and profanity, took out indecency insurance. Though the FCC has never fined an individual for on-air indecency, profanity or obscenity, it may have the legal right to do so, say those who have studied the governing statutes.

May's insurance company performed a risk analysis on him in late 2004 -- "to see where I was deficient," he said. As a result, May increased his coverage, which also included slander and lawsuit protection, to include indemnity against possible indecency fines. He pays $22,000 a year for the $1 million policy.

"Basically," May said at the time, "I'm buying a big shield."

Link to article: HERE

7/11/2006 07:18:00 AM

SSG Has Merged. You Can Read All Of The Latest SSG Content By Clicking Here

0 Comments:

Post a Comment

SSG is not a Financial Advisor. Read Disclosure: HERE

--------------------------------------------------------