Advertising Issues

Legally Qualified Candidates:

A candidate is legally qualified when he or she has

1.  publicly announced their intention to run for nomination or office
2.  is qualified under the applicable local, state, or federal law to hold office for which he or she is a candidate
3. has qualified for a place on the ballot or has publicly committed himself or herself to seeking election by a write-in method.

Use of a broadcast facility by a candidate: A Use is any positive appearance of a candidate whose voice or likeness is identified or readily identifiable. A use in conjunction with a campaign triggers the following:

• Lowest unit charge requirements,
• Equal opportunity requirements,
• The prohibition on a station censoring a political spot or program, and
• Station protection against liability for libelous or defamatory statements that might occur in the spot or program.

Lowest Unit Charge (LUC): Applies only during a period of 45 days preceding a primary election and 60 days prior to a general election.

Issue Advertising & LUC: The lowest unit charge does not apply to issue advertising.

The following questions ask the basics concerning the determination of the lowest unit rates to be charged to candidates. These questions are meant to help stations spot issues that may arise during the political window. While they do not address all of the issues that may arise during the political window, these questions should give stations a good start in determining their political rates.

Q. What is meant by lowest unit charge?
During the 45 days before a primary, or the 60 days before a general election, candidates are charged the lowest rate that any commercial advertiser paid for a spot of the same class run during the same time period.

Q. What is a class of time?
A “class” is a type of spot that has unique rights and characteristics. For instance, spots that run in different dayparts are of a different class, e.g. morning drive is a different class from mid-day, which is different from afternoon drive. Each of those classes would have its own lowest unit rate.

Even within a given daypart, a station may have spots with different rates. Thus, in any daypart, there may be multiple classes of time, each with their own lowest unit rate. For instance, a preemptible spot would be of a different class than a fixed position spot – each with a different lowest unit rate even if they both run during the same daypart. Different rotations are also different classes with their own lowest unit rate, e.g. a spot which could run anytime between 6 AM and midnight would be a different class from one that can run between 6 AM and 6 PM. Each would have a different lowest unit rate. A candidate can buy spots of any of those classes at the lowest unit rate for that class, and he gets the same rights that commercial advertisers who buy that spot get (e.g. if the candidate buys spots in a 6 AM to midnight rotation, his spots are treated just like those of a commercial advertiser who buys those spots – they can run anywhere between those hours).

Q. What commercial spots do you look at in determining the lowest unit rate for a given class of time?

You look at the spots of that class running during the relevant 45 or 60 day period. Even within those periods, the rates can change. If, for instance, a long term package sets your lowest unit rate for a particular class of time, and the last spot from that package is run midway through the political window, after the last spot from the package runs, the rates for that class of time can go up for the rest of the political window. Similarly, if spots are sold on a demand basis, the lowest unit rate can change on an almost daily basis. If there are “fire sales” of spots during particular periods within a window, the lowest unit charge for those periods do not set the rates for periods outside of the fire sale period.

Q. Do candidates have to buy in volume to get volume discounts?

No. Candidates get the benefit of all volume discounts, even if they don’t buy in volume. For instance, if spots are $10 each, or 12 for $100, the candidate can buy one spot for $8.33 (100 divided by 12) even though a commercial advertiser would have to spend $100 to get the volume discount.

Q. What about bonus or no charge spots?

Bonus spots of the same class are treated just like frequency discounts discussed above. If a commercial advertiser gets two bonus spots for every ten spots that he buys, the Commission considers it as if he bought twelve spots. Thus, as in the example above, the candidate can buy one spot at one-twelfth of the price paid by the commercial advertiser – getting advantage of the frequency discount without having to buy in frequency.

If the bonus spots are of a different class, for lowest unit rate purposes, they are treated as a package plan – as described below.

Q. Does a candidate need to buy a package to take advantage of package rates?

No. In its revisions of the political rules in the early 1990s, the FCC concluded that forcing candidates to buy a package in order to take advantage of package rates was too confusing, and forced candidates to buy spots that they didn’t want. So the FCC said that broadcasters need to break packages down into their parts so that candidates get full advantage of the discounts such packages offer, without having to buy the whole package.

In essence, what the FCC requires is that the station break down the package rate by allocating a portion of that rate to each of the spots within the package. After making an allocation, the broadcaster then compares the rates assigned to the spots in the package to other spots sold of the same classes to see if the package price has any impact on the lowest unit rate for those classes of time.

For instance, if you sell a commercial advertiser a package that contains 10 drive time spots and 10 overnight spots for $100, you must allocate the $100 purchase price among the two classes of spots in the package – drive time and overnight. If you allocate $95 of the package price to the morning drive spots, the unit rate from this package is $9.50 for the morning drive spots. Compare this price for a drive time spot with other drive time spots you’ve sold in other contracts to determine if this package affects the lowest unit rate for drive time spots on your station. In this example, the remaining $5 would be allocated to the overnight spots, meaning that their per unit rate is 50 cents each, which you would compare against other overnight spot sales to determine if this sale had an effect on the lowest unit rate for the overnight class of time.

Q. When do I make the allocation of the package price? Who do I need to tell about the allocation?

The Commission has said that you need to make this allocation at the time you write up the package. Thus, if you are writing up packages today that may run in the primary or election windows, you should be allocating the purchase price of those packages now!

The allocation should be in writing, and kept in the station’s internal files. The allocation need not be shown to candidates, nor put into the public file. It may be different than the allocation shown to commercial advertisers (e.g. in the example above, if the overnight spots were shown as no charge or bonus spots, you can still allocate part of the package purchase price to those spots in your internal allocation). The written allocation will ordinarily only be seen if the FCC requests it, either in some sort of audit or in response to a complaint.

Q. Do I need to do this with all packages?

The only exception recognized by the FCC is packages that contain buys on multiple stations. In that case, the candidate can be forced to buy the lowest unit of the multi-station package to qualify for the package rate. Note, however, that a candidate should be able to buy spots on each station separately through other rates (i.e. all of the spots on a station cannot be sold exclusively as part of a multi-station combination rate), as each station has its own political obligations.

This allocation of a package price can be beneficial to a station – as it allows for the allocation of the purchase price for spots, even of the same class, if the spots are to be run over an extended period of time. For instance, if you sell a major advertiser a year long contract for spots at the price of $12,000, that price does not need to be allocated $1000 a month. Instead, you can make a reasonable allocation of the $12,000 over the length of the contract to reflect the actual value of the spots (e.g. you could allocate $500 to January when demand and rates are low, but $2000 to December when the opposite is true). Just remember, that allocation is supposed to be made at the time the contract is initially written, and should be reasonably based (you can’t allocate it just so as to place a high allocation on the election window periods).

Station Political File: Stations must keep and allow public inspection of all requests for political time made by or on behalf of candidates. Rate inquires need not be recorded. Requests should be placed promptly in the political file.

The OAB highly recommends the NAB’s “Political Broadcast Catechism” as a reference guide to political advertising. If you do not have a copy, you can order one from the NAB Website.

In 1986, Judge West of the U. S. District Court for Western Oklahoma ruled that
Oklahoma laws prohibiting the advertising of alcoholic beverages were unconstitutional.
Although the laws remain on the books, the enforcing agency—the ABLE
Commission—follows the Judge's decision.

Judge West's decision makes it possible to advertise liquor stores, including price
advertising. The only thing we have ever been advised is the copy should not entice,
encourage, or glamorize consumption. Brand advertising from distillers can also be
accepted.

As to bars and clubs, when liquor by the drink came about in Oklahoma, certain
guidelines were laid down. No licensee shall:

(a) Sell or offer to sell to any person an unlimited number of drinks during any set
period for a fixed price, except at private functions not open to the public.

(b) Sell or offer to sell drinks to any person or group of persons on any one day at
prices less than those charged the general public on that day, except at private
functions.

(c) Encourage or permit, on the licensed premises, any game or contest which
involves drinking or the awarding of drinks as prizes.

Also, there are some restrictions on the participation of distributors and wholesalers with
retailers as to what they call “bonding,” which is prohibited. This would be like furnishing
free or discounted product for special events.

The advertising of these products is legal in Oklahoma. Individual stations should
establish their own policies as to the acceptance and treatment of the advertising of the
products.

Revised 2/13/19. For a copy of the original rules showing the changes, click here.

Now that Oklahoma has legalized the sale of medical marijuana, many stations have been contacted by dispensaries who are eager to advertise their products. While some broadcasters have decided to take the risk, we advise against accepting the advertising.
Marijuana, even medical marijuana, is still illegal under Federal law. Because it is illegal under Federal law, carrying advertising for a product that is illegal under Federal law has potentially serious consequences for radio and TV stations because they operate under a license issued by the federal government – the FCC – and the FCC has not yet issued a ruling on this subject. Being a Federal licensee and running ads for a product banned by Federal law could raise issues about a broadcaster’s license. In fact, with license renewal coming up soon, there is the possibility that listeners/viewers may file challenges against stations that run marijuana ads arguing that they are promoting an illegal product. There is also the potential that some aggressive Federal prosecutor could raise issues about stations promoting the sale of an illegal product.
Ultimately, the decision about whether to carry marijuana advertising will be based on your assessment of risk. However, we advise to err on the side of caution. The bottom line: Your license is a federal license, and marijuana is still illegal under federal law.

For more in-depth information on the subject, OAB attorney David Oxenford has provided the slides from his 2019 presentation on the issue of Cannabis Advertising. You may review them here.

12/11/2019

Notwithstanding the fact that it has been over 30 years since Congress banned cigarette ads from the airwaves, broadcasters continue to ask for advice on whether they may air certain types of tobacco-related advertisements. In fact, questions in this area of law appear to be on the increase. One reason is the proliferation of small, independent cigarette manufacturers resulting from the 1998 tobacco settlement. That settlement has caused the price of cigarettes to rise, thereby making it profitable for small companies to become cigarette manufacturers. Given the pressure that these manufacturers and their retail outlets are likely to place on broadcasters to help in promoting these new tobacco products, we offer the following Q&A to aid broadcasters in complying with tobacco advertising restrictions should they be asked by any company to air tobacco-related spots.

Q: May broadcasters air advertisements for cigarettes, small cigars and smokeless tobacco?

A: No. The Federal Cigarette Labeling and Advertising Act of 1969 (the “Act”) makes it unlawful to advertise “cigarettes” and “little cigars” on “any medium of electronic communication subject to the jurisdiction of the Federal Communications Commission.” In 1986, Congress enacted the Comprehensive Smokeless Tobacco Health Education Act, extending the broadcast ban to include advertisements for smokeless tobacco products. The broadcast ban of cigarette advertisements survived a Constitutional challenge in Capital Broadcasting v. Mitchell. The plaintiffs in that case, several broadcasters and the National Association of Broadcasters, contended that the advertising ban under the Act violated their First Amendment right to freedom of speech and their due process rights. The federal district court in Washington, DC upheld the broadcast advertising ban, and the Supreme Court affirmed without opinion.

Q: How are “cigarettes,” “little cigars,” and “smokeless tobacco” defined?

A: For purposes of the Federal law, “cigarettes” are defined as “(A) any roll of tobacco wrapped in paper or in any substance not containing tobacco, and (B) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subparagraph (A).” “Little cigars” are defined as “any roll of tobacco wrapped in leaf tobacco or any substance containing tobacco (other than any roll of tobacco which is a cigarette) and as to which one thousand units weighs no more than three pounds.” “Smokeless tobacco” is defined as “any finely cut, ground, powdered, or leaf tobacco that is intended to be placed in the oral cavity” (i.e. chewing tobacco, snuff, etc.).

Q: How is the broadcast ban enforced?

A: It is the practice of the FCC to refer complaints in this area to the Office of Consumer Litigation of the Department of Justice (“DOJ”), which has primary responsibility for enforcing the laws relating to tobacco advertising. Any violation of the advertising restrictions is considered a misdemeanor punishable by a fine not to exceed $10,000. The DOJ makes decisions as to whether to seek penalties on a case by case basis. While the DOJ does not publish formal rules or guidelines for broadcasters to follow, as discussed in more detail below, the Department has issued a number of informal advisory letters that provide general guidance regarding the agency’s current enforcement intentions.

Q: May broadcasters air advertisements for pipe tobacco and cigars?

A: Yes. Federal law does not prohibit the broadcast advertising of cigars (not defined as little cigars) or pipe tobacco. According to DOJ advisory letters, if an advertisement “specifically relates only to cigars or loose tobacco . . . it does not fall within the statutory ban.” However, the Federal Trade Commission (“FTC”), which enforces the print advertisement restrictions of tobacco products, recently entered into a settlement agreement with a number of cigar manufacturers which subjects the companies to fines for airing cigar advertisements absent a health risk disclosure. The warnings, which the major cigar companies are required to rotate, include:

• SURGEON GENERAL WARNING: Cigar Smoking Can Cause Cancers Of The Mouth And Throat, Even If You Do Not Inhale.
• SURGEON GENERAL WARNING: Cigar Smoking Can Cause Lung Cancer And Heart Disease.
• SURGEON GENERAL WARNING: Tobacco Use Increases The Risk Of Infertility, Stillbirth And Low Birth Weight.
• SURGEON GENERAL WARNING: Cigars Are Not A Safe Alternative To Cigarettes.
• SURGEON GENERAL WARNING: Tobacco Smoke Increases The Risk Of Lung Cancer And Heart Disease, Even In Nonsmokers.

Cigar companies are required to display these warnings clearly and prominently in all audio and video ads, on packages, in print ads, on the Internet, and on point-of-purchase displays. Therefore, as a cautionary measure, FTC staff has recommended that broadcasters include similar health risk warnings when airing permissible cigar ads.

Q: May broadcasters advertise shops that sell tobacco products?

A: Generally, yes. There is no specific Federal prohibition against advertising smoke shops. However, each commercial message must be scrutinized for content that may be prohibited. According to DOJ informal opinions, examples of prohibited advertisements include the following: (1) advertisements that include the words “cigarette” or “little cigar”; (2) advertisements that include the brand names of cigarettes or little cigars; and (3) advertisements that juxtapose words in such a way as to suggest that cigarettes, little cigars or smokeless tobacco are available and can be purchased at the shop. In contrast, advertisements for smoke shops that do not include this prohibited language pose less risk of scrutiny and DOJ enforcement action.

Q: What are examples of smoke shop advertisements that are problematic?

A: Any mention of the words “cigarette,” “little cigar,” or “smokeless tobacco” in a broadcast spot will likely constitute a prohibited advertisement and lead to DOJ scrutiny and enforcement action. For example, the DOJ has found on air advertisements for “The Stop” and “E-Z Convenience Store” to violate the Act because “cigarettes” were advertised as among the items sold at the stores. Moreover, if the word “cigarette” is included in the name of a smoke shop, as in “Joe’s Cigarette and Smoke Shop,” the station advertisement could lead to DOJ scrutiny and possible enforcement action. This is true even if the text of the spot has nothing to do with smoking related products. For example, a company named “Joe’s Cigarette and Convenience Store” could not advertise its weekly milk special on broadcast radio or television because the word “cigarette” is in its name.

Similarly, the DOJ has prohibited over-the-air advertisements that include the brand name of cigarettes. Thus, an advertisement for “Joe’s Convenience Store” could not state that “Marlboro” or “Kool” products are sold at the store. In fact, a number of the DOJ’s opinions have demonstrated that even the juxtaposition of certain words implying that cigarettes, little cigars and smokeless tobacco are sold at a store can subject a broadcaster to enforcement action. For example, the DOJ has found that an advertisement which was sponsored by a store named “Dirt Cheap” and which included the words “smokers” and “tobacco,” would violate the Act if aired. The DOJ has also issued informal opinions prohibiting an advertisement that juxtaposed the shop name “One Stop Tobacco” with “cartons” and “packs,” as well as an ad for a store called the “Smokers Outlet” with included the words “sell name brands.” Although there may be Constitutional arguments that the DOJ’s position is overly broad, stations should think carefully about deciding to risk running ads for smoke shops, as there are U.S. Attorneys in every state who could hear the ad and decide to take action in accord with the informal interpretations provided by the DOJ.

Q: What are examples of permissible smoke shop advertisements?

A: A smoke shop advertisement that makes no direct or indirect mention of cigarettes, little cigars, chewing tobacco or brand names should not be viewed as violating the Act. Based on the DOJ informal opinion letters, smoke shop advertisements that promote the sale of paraphernalia associated with smoking, such as cigar humidors, rolling paper, and pipes, are not likely to be found to be problematic under the federal tobacco laws. For example, DOJ informal opinion letters have permitted smoke shop advertisements for “The Tobacco Outlet,” “The Smokers Outlet,” “Smoker Friendly,” and “J&J Discount Tobacco,” because they did not “fall within the statutory ban.” However, as mentioned above, advertisements that juxtapose words in such a way as to suggest that cigarettes, little cigars or smokeless tobacco are available and can be purchased at the shop may violate the Act.

Because it is often very difficult to define with precision what will trigger DOJ scrutiny and possible enforcement of the broadcast ban on the advertising of certain tobacco products, and because the risk of liability under the Act is substantial, stations should seek the advice of counsel before they agree to accept and air any tobacco-related advertisements.

This Special Advisory to Broadcasters is published by the communications practice group of the law firm Shaw Pittman, 2300 N Street, NW, Washington, DC 20037-1128, telephone 202-663-8000, facsimile 202-663-8007, Website: www.shawpittman.com. The Special Advisory is a service to the practice group’s clients and friends, and is intended to provide general information only.

For a booklet outlining the rules and regulations for State of Oklahoma Motor Vehicle Advertising, contact:

Oklahoma Motor Vehicle Commission
4334 NW Expressway, Suite 183
Oklahoma City, OK 73116
Tel: (405) 607-8227

The following is an overview of Lottery, Gaming and Raffles Advertising in Oklahoma.

Q: What constitutes a lottery?

A: Chance, consideration and prize. If all three elements are present, you have a lottery. Scrutinize your client and station promotions carefully.

Q: What lotteries are legal in Oklahoma?

A: The State of Oklahoma Lottery, which began October 2005, and those raffles (lotteries) sponsored by certain non-profit organizations as outlined later in this section.

Q: May individual lottery ticket outlets advertise the statewide lottery?

A: Yes.

Q: May broadcast stations give away lottery tickets or run promotions based around the statewide lottery?

A: Yes, as long as your promotion is not a lottery containing chance, consideration and prize.

Q: Can a station advertise an adjoining state lottery?

A: There doesn’t appear to be anything prohibiting it, but we’re advised there is an unwritten agreement where states typically do not advertise in their adjoining states that have state lotteries. Exceptions to this might be stations that are located in a DMA that serves two states or has dual licensing.

Q: May we accept advertising for raffles?

A: Yes. Previously passed legislation authorizing the advertising of raffles by certain non-profit organizations became effective with the approval of the statewide lottery. The following outlines the regulations under which a legal raffle may be operated:

A qualified organization to raise funds by issuing numbered tickets in conjunction with voluntary contributions to the qualified organization, the corresponding stub or stubs of one or more of the tickets to be drawn by lot under the supervision of an official of the qualified organization, the stub or stubs so drawn entitling the ticket holder a prize. As used in this paragraph, “qualified organization” means:

1. Churches
2. Public or private schools accredited by the State Department of Education or registered by the State Board of Education for the purposes participating in federal programs,
3. Student groups or organizations affiliated with a public or private school qualified pursuant to #2 above,
4. Parent-teacher associations or organizations affiliated with a public or private school qualified pursuant to #2 above,
5. Fire departments,
6. Police departments,
7. Organizations that are exempt from taxation pursuant to the provisions of sub-section (c) of Section 501 of the U. S. Internal Revenue Code, as amended, 26 U.S.C., Section 501(c) et seq, or
   8) An “organization” as such term is defined in paragraph 20 of Section 402 of Title 3A of the Oklahoma Statutes.

Any raffle conducted by a qualified organization shall be conducted by members of the qualified organization without compensation to any member. The organization shall not hire or contract with any person or business association, corporation, partnership, limited partnership or limited liability company to conduct a raffle, to sell raffle tickets or to solicit contributions in connection with the raffle on behalf of the organization.

State Statute 21OS1051.

Q: What other types of gaming advertising may we accept?

1. Gaming facilities owned and operated by Indian tribes.
2. Gaming at Horse Racing Tracks.
3. Licensed Non-profit Bingo facilities.
4. Out-of-state casino gambling.

Such advertising must adhere to the rules and regulations of the authorized bodies governing such endeavors.

Acceptance of this type of advertising should be at the discretion of the individual stations.

Q: Is the advertising of Internet Sports Betting and Gambling legal in Oklahoma?

A: According to the office of the Attorney General of Oklahoma, the advertising of this type of gambling in Oklahoma is illegal. Federal law also prohibits this type of gambling on the Internet. A June 11, 2003 letter from the US Department of Justice to the Newspaper Association of America stated:

“The sheer volume of advertisements for offshore sports books and online casinos is troubling because is misleads the public of the United States into believing that such gambling is legal, when in fact it is not.”

It further stated:

“The Department of Justice, as a public service, would like you be aware that the entities and individuals placing these advertisements may be violating various state and federal laws, and that entities and individuals that accept and run such advertisements may be aiding and abetting these illegal activities.

The advertising of online gambling presents certain risks for broadcast stations in violation of federal law prohibiting such.