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    INTERNATIONAL REGULATION OF ADVERTISING, SPONSORSHIP AND COMMERCIAL DISCLOSURE

    FOR COMMERCIAL RADIO BROADCASTING

    RESEARCH REPORT PREPARED FOR THE AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY

    Research and analysis current at:

     15 June 2009

    Prepared by:

    Professor Lesley Hitchens

    Faculty of Law

    University of Technology Sydney

    With research assistance from

    Tiffany Hambley

    Christoph van Opstal

? Commonwealth of Australia 2010.

    This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be produced by any process without prior written permission from the Australian Communications and Media Authority.

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    International Regulation of Advertising, Sponsorship and

    Commercial Disclosure for Commercial Radio Broadcasting

    TABLE OF CONTENTS

    TABLE OF ABBREVIATIONS ....................................................................................................... v INTRODUCTION ......................................................................................................................... viii SUMMARY REVIEW OF FINDINGS ......................................................................................... xix PART A: REPORTS OF JURISDICTIONS.................................................................................... 1 1 UNITED KINGDOM .............................................................................................................. 2 1.1 THE UNITED KINGDOM BROADCASTING ENVIRONMENT .......................................................... 2 1.1.1 Overview ..................................................................................................................... 2 1.1.2 Licensing of commercial radio ..................................................................................... 4

    1.1.2.1 Local commercial services .................................................................................................... 4

    1.1.2.2 National commercial services ............................................................................................... 4 1.2 THE BROADCASTING REGULATORY ENVIRONMENT ................................................................ 5 1.2.1 Broadcasting policy ..................................................................................................... 5 1.2.2 The Regulatory Framework .......................................................................................... 7

    1.2.2.1 The Role of Ofcom ............................................................................................................... 7

    1.2.2.2 The role of the Advertising Standards Authority .................................................................... 9

    1.2.2.3 Enforcement and sanctions ................................................................................................. 11

    Ofcom .......................................................................................................................................... 11

    The ASA ...................................................................................................................................... 13 1.3 REGULATION OF ADVERTISING AND SPONSORSHIP ON COMMERCIAL RADIO ............................ 14 1.3.1 Definitions ................................................................................................................. 14 1.3.2 Advertising, sponsorship, and related rules ................................................................ 14

    1.3.2.1 Amount of advertising ........................................................................................................ 14

    1.3.2.2 Political advertising ............................................................................................................ 14

    1.3.2.3 General .............................................................................................................................. 15

    The RAS Code ............................................................................................................................. 15

    The Ofcom Code .......................................................................................................................... 16 1.3.3 Other rules of relevance ............................................................................................. 21 1.3.4 Application of the rules and/or current issues ............................................................. 21 1.4 UK REVIEW OF FINDINGS ..................................................................................................... 23 1.5 COMPLETED OR PLANNED REVIEWS ...................................................................................... 26 2 UNITED STATES ................................................................................................................. 37 2.1 THE UNITED STATES BROADCASTING ENVIRONMENT ............................................................ 37 2.1.1 Overview ................................................................................................................... 37 2.1.2 Licensing of commercial radio ................................................................................... 38 2.2 THE BROADCASTING REGULATORY ENVIRONMENT ................................................................ 38 2.2.1 Broadcasting policy ................................................................................................... 38 2.2.2 The regulatory framework .......................................................................................... 40

    2.2.2.1 The role of the FCC ............................................................................................................ 40

    2.2.2.2 The role of self-regulation................................................................................................... 40

    2.2.2.3 Enforcement and sanctions ................................................................................................. 41 2.3 REGULATION OF ADVERTISING AND SPONSORSHIP ON COMMERCIAL RADIO ............................ 42 2.3.1 Definitions ................................................................................................................. 42 2.3.2 Advertising, sponsorship, and related rules ................................................................ 43

    2.3.2.1 Amount of advertising ........................................................................................................ 43

    2.3.2.2 Political advertising ............................................................................................................ 43

    2.3.2.3 General .............................................................................................................................. 47

    The sponsorship identification rules .............................................................................................. 47

    The payment-disclosure rule ......................................................................................................... 50 2.3.3 Other rules of relevance ............................................................................................. 51 2.3.4 Application of the rules and/or current issues ............................................................. 51 2.4 US REVIEW OF FINDINGS ...................................................................................................... 55 2.5 COMPLETED OR PLANNED REVIEWS ...................................................................................... 57 3 CANADA ............................................................................................................................... 60

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    3.1 THE CANADIAN BROADCASTING ENVIRONMENT.................................................................... 60 3.1.1 Overview ................................................................................................................... 60 3.1.2 Licensing of commercial radio ................................................................................... 61 3.2 THE BROADCASTING REGULATORY ENVIRONMENT ................................................................ 62 3.2.1 Broadcasting policy ................................................................................................... 62 3.2.2 The regulatory framework .......................................................................................... 64

    3.2.2.1 The role of the CRTC ......................................................................................................... 64

    3.2.2.2 The role of self-regulation................................................................................................... 65

    The CBSC .................................................................................................................................... 66

    The ASC ...................................................................................................................................... 67

    3.2.2.3 Enforcement and sanctions ................................................................................................. 67

    The CRTC ................................................................................................................................... 68

    The CBSC .................................................................................................................................... 68 3.3 REGULATION OF ADVERTISING AND SPONSORSHIP ON COMMERCIAL RADIO ............................ 69 3.3.1 Definitions ................................................................................................................. 69 3.3.2 Advertising, sponsorship, and related rules ................................................................ 72

    3.3.2.1 Amount of advertising ........................................................................................................ 72

    3.3.2.2 Political advertising ............................................................................................................ 73

    3.3.2.3 General .............................................................................................................................. 73 3.3.3 Other rules of relevance ............................................................................................. 75

    News and current affairs .......................................................................................................... 75 3.3.4 Application of the rules and/or current issues ............................................................. 78 3.4 CANADA REVIEW OF FINDINGS ............................................................................................. 80 3.5 COMPLETED OR PLANNED REVIEWS ...................................................................................... 82 4 IRELAND .............................................................................................................................. 85 4.1 THE IRISH BROADCASTING ENVIRONMENT ............................................................................ 85 4.1.1 Overview ................................................................................................................... 85 4.1.2 Licensing of commercial radio ................................................................................... 86 4.2 THE BROADCASTING REGULATORY ENVIRONMENT ................................................................ 86 4.2.1 Broadcasting policy ................................................................................................... 86 4.2.2 The regulatory framework .......................................................................................... 88

    4.2.2.1 The role of the BCI ............................................................................................................. 88

    4.2.2.2 The role of the BCC ........................................................................................................... 90

    4.2.2.3 Enforcement and sanctions ................................................................................................. 91

    The BCI ....................................................................................................................................... 92

    The BCC ...................................................................................................................................... 93 4.3 REGULATION OF ADVERTISING AND SPONSORSHIP ON COMMERCIAL RADIO ............................ 93 4.3.1 Definitions ................................................................................................................. 93 4.3.2 Advertising, sponsorship, and related rules ................................................................ 94

    4.3.2.1 Amount of advertising ........................................................................................................ 94

    4.3.2.2 Political advertising ............................................................................................................ 95

    4.3.2.3 General .............................................................................................................................. 95 4.3.3 Other rules of relevance ............................................................................................. 97 4.3.4 Application of the rules and/or related issues ............................................................. 97 4.4 IRELAND REVIEW OF FINDINGS ............................................................................................. 98 4.5 COMPLETED OR PLANNED REVIEWS .................................................................................... 100 PART B: REPORT ON GERMANY; AN OVERVIEW ............................................................. 104 5 GERMANY ......................................................................................................................... 105 5.1 THE GERMAN BROADCASTING ENVIRONMENT..................................................................... 105 5.1.1 Overview ................................................................................................................. 105 5.1.2 The constitutional framework ................................................................................... 106

    5.1.2.1 Division of powers ........................................................................................................... 106

    5.1.2.2 Constitutional freedom of broadcasting ............................................................................. 106

    5.1.2.3 The dual broadcasting system ........................................................................................... 107 5.2 THE REGULATORY FRAMEWORK OF GERMAN BROADCASTING ............................................. 107 5.2.1 Regulatory instruments ............................................................................................ 108

    5.2.1.1 Programming principles .................................................................................................... 109 5.2.2 The framework of regulatory bodies ......................................................................... 110

    5.2.2.1 The role of state media authorities ..................................................................................... 110

    5.2.2.2 The role of the ALM ......................................................................................................... 111

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    5.2.2.3 The Federal Commissions ................................................................................................. 112

    5.2.2.4 The role of the German Advertising Council ..................................................................... 113 5.2.3 Enforcement and sanctions ...................................................................................... 113 5.3 REGULATION OF ADVERTISING AND SPONSORSHIP ON COMMERCIAL RADIO .......................... 114 5.3.1 Definitions ............................................................................................................... 114 5.3.2 Advertising, sponsorship, and related rules .............................................................. 115

    5.3.2.1 Amount of advertising ...................................................................................................... 115

    5.3.2.2 Political advertising .......................................................................................................... 115

    5.3.2.3 General ............................................................................................................................ 116 5.4 CONCLUDING COMMENTS .................................................................................................. 117 APPENDIX ................................................................................................................................... 119 6 NOTE ON OTHER RADIO BROADCASTING SERVICES AND DIGITAL RADIO .... 119 6.1 UNITED KINGDOM ............................................................................................................. 119 6.1.1 Other radio broadcasting services ............................................................................ 119

    6.1.1.1 Community radio ............................................................................................................. 119

    6.1.1.2 Restricted service licences ................................................................................................ 120

    6.1.1.3 Subscription sector ........................................................................................................... 120 6.1.2 Digital radio ............................................................................................................ 120 6.2 UNITED STATES ................................................................................................................. 121 6.2.1 Other radio broadcasting services ............................................................................ 121

    Noncommercial educational stations ........................................................................................... 121

    6.2.1.1 Subscription sector ........................................................................................................... 122 6.2.2 Digital radio ............................................................................................................ 122 6.3 CANADA ........................................................................................................................... 123 6.3.1 Other radio broadcasting services ............................................................................ 123

    6.3.1.1 Non-profit sector .............................................................................................................. 123

    Community radio ....................................................................................................................... 123

    Campus radio ............................................................................................................................. 124

    Native radio ............................................................................................................................... 124

    6.3.1.2 Subscription sector ........................................................................................................... 125

    Audio services delivered by Broadcasting Distribution Undertakings ........................................... 125

    Multi-channel radio services ....................................................................................................... 126 6.3.2 Digital radio ............................................................................................................ 126 6.4 IRELAND ........................................................................................................................... 127 6.4.1 Other radio broadcasting services ............................................................................ 127 6.4.2 Digital radio ............................................................................................................ 127

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    International Regulation of Advertising, Sponsorship and

    Commercial Disclosure for Commercial Radio Broadcasting TABLE OF ABBREVIATIONS

Australia

    ABA Australian Broadcasting Authority

    ABC Australian Broadcasting Corporation

    BSA (Aus) Broadcasting Services Act 1992

    Advertising Standard Broadcasting Services (Commercial

    Radio Advertising) Standard 2000

    Disclosure Standard Broadcasting Services (Commercial

    Radio Current Affairs Disclosure)

    Standard 2000

    Compliance Program Standard Broadcasting Services (Commercial

    Radio Compliance Program) Standard

    2000

    CRA Code Commercial Radio Australia Codes of

    Practice and Guidelines

Canada

    ASC Advertising Standards Canada

    BA 1991 (Ca) Broadcasting Act 1991 (Ca)

    BDU Broadcasting Distribution Undertaking

    CBC Canadian Broadcasting Corporation

    CRTC Canadian Radio-television and

    Telecommunications Commission

    CAB Canadian Association of Broadcasters

    Code of Ethics Canadian Association of Broadcasters

    Code of Ethics

    CBSC Canadian Broadcast Standards Council

    Radio Regs (Ca) Radio Regulations 1986

    RTNDA Radio-Television News Directors

    Association of Canada

    RTNDA Code Radio-Television News Directors

    Association of Canada Code of Ethics

European Union

    TWF Directive Television without Frontiers Directive

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    Commercial Disclosure for Commercial Radio Broadcasting AVMS Directive Audiovisual Media Services Directive

Germany

    ALM Association of State Media Authorities

    Interstate Treaty Interstate Treaty on Broadcasting and

    Telemedia

    Joint Commission Joint Commission on Programming,

    Advertising and Media Literacy

    Joint Directive Joint Directives of the State Media

    Authorities for Advertising, for the

    Implementation of the Separation of

    Advertising and Programming, and for

    Sponsorship in Radio

    Ireland

    BA 2001 (Ie) Broadcasting Act 2001

    Bill Broadcasting Bill

    BAI Broadcasting Authority of Ireland

    BCI Broadcasting Commission of Ireland

    BCC Broadcasting Complaints Commission

    BCI Advertising Code BCI General Advertising Code

    BCI Guidance Notes BCI General Advertising Code Guidance

    Notes

    DAB Digital Audio Broadcasting

    RT Act 1988 (Ie) Radio and Television Act 1988

    RTÉ Radio Telefis Éireann

United Kingdom

    ASA Advertising Standards Authority

    ASA(B) Advertising Standards Authority

    (Broadcast) Ltd

    BA 1990 (UK) Broadcasting Act 1990 (UK)

    BA 1996 (UK) Broadcasting Act 1996 (UK)

    Basbof Broadcasting Advertising Standards

    Board of Finance Ltd

    BBC British Broadcasting Corporation

    BCAP Broadcast Committee of Advertising

    Practice

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    Commercial Disclosure for Commercial Radio Broadcasting

    CAP Committee on Advertising Practice Comms Act (UK) Communications Act 2003 (UK) DAB Digital Audio Broadcasting Ofcom Office of Communications Ofcom Code Ofcom Broadcasting Code RAS Code Radio Advertising Standards Code

     United States

    CFR Code of Federal Regulations Comms Act (US) Communications Act of 1934 FCC Federal Communications Commission IBOC In-Band On-Channel

    NAB National Association of Broadcasters USC United States Code

    VNRs video news releases

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    International Regulation of Advertising, Sponsorship and

    Commercial Disclosure for Commercial Radio Broadcasting

    INTRODUCTION

    This report provides a comparative survey and analysis of policies and regulations relating to advertising on, and sponsorship of, commercial radio. The report focuses on those rules which are most relevant to news and current affairs programming. The jurisdictions comprehensively surveyed are the United Kingdom (UK), the United States (US), Canada, and Ireland. A brief review of Germany is also included. The survey and presentation have been influenced by a view that the regulations can not be fully understood in isolation. How they operate within the regulatory framework of the relevant jurisdiction will also be significant. As such, the report has also included information on the regulatory framework, or on those aspects relevant to advertising regulation, of each jurisdiction. Although some examples (for certain jurisdictions) are included of adjudications on relevant rules, it has not been possible within the time frame of this project to undertake a comprehensive review. Accordingly, these examples should be seen as illustrative only.

    In reporting on the regulation of advertising and sponsorship of commercial radio, we have reviewed rules which are specifically concerned with advertising and/or sponsorship. In addition, we have reviewed rules which may be triggered because of the influence of commercial interests on programming. In this category, relevant rules would be those dealing with disguised advertising, such as product placement. So far as it is possible to have consistency across the four major jurisdictions: UK, US, Canada, and Ireland, the review of the advertising and sponsorship rules and other rules of relevance, is structured as follows:

    ; Definitions. This section considers all definitions which may be relevant. In

    some cases, it will be more appropriate to consider the definitions in the

    context of considering the substantive rules. This is made clear in the relevant

    sections of the report.

    ; Advertising, sponsorship, and related rules. This section reviews rules

    specifically about advertising, sponsorship, and other related commercial

    practices. It is structured as follows:

    o Amount of advertising. Rules on the amount of advertising are

    considered to be relevant to the general public-interest concern that

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    International Regulation of Advertising, Sponsorship and

    Commercial Disclosure for Commercial Radio Broadcasting

    there should be a balance between advertising and content so that

    listeners have access to programming content, including news,

    information, and opinion.

    o Political advertising. Political advertising rules will be relevant to

    access to broadcasting, and to the need for fair and accurate coverage

    of matters of public interest.

    o General this section will consider the advertising and sponsorship

    rules relevant to news and current affairs programming. In some cases,

    the rules will not be specifically directed at news and current affairs

    coverage, but they may be relevant to the need for fair and accurate

    coverage.

    ; Other rules which may be relevant this section will consider any other rules,

    if any, which may not be specifically about advertising and sponsorship, but

    which may nevertheless be relevant to the influence of commercial interests

    on programming. An example of this would be a general rule which prohibits

    misleading content. An undisclosed commercial relationship might cause

    content to be misleading. We have not reported on laws of general application

    which relate to misleading or deceptive-type conduct.

    ; Application of the rules and/or current issues if appropriate, this section will

    include reference to any useful examples showing the application of the rules

    or to any matters of particular current concern in relation to the rules. The research method used in preparing this report has been to access and analyse primary materials and policy documents issued by the relevant government bodies or regulatory agencies. We have relied upon desk-based, Internet research, and have primarily accessed the materials from official websites, with some back up from commercial legal publisher databases. With very limited exceptions, this report does not use or refer to secondary literature.

    As required the report is concerned with commercial radio only, and with rules relating to advertising and sponsorship specifically in relation to news and current affairs programming. The report does not make reference to any other advertising rules which might be imposed on radio. It should also be noted that in some jurisdictions the rules considered in this report will apply also to other categories of

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