Was Comcast Corp. (NASDAQ: CMCSA) punished for not cutting the FCC a break? Last week its news program, CN8, became the first show to be fined by the Federal Communications Commission for airing parts of a video news release (VNR) without identifying the source - in this case, the maker of the product CN8 was reporting on. It was just $4,000. Still, some people wondered why Comcast, which vociferously rejects the fine and is fighting it, was singled out? Many other cable and broadcast TV stations have been criticized for doing the same thing, including Philadephia's KYW-TV once in 2005, after which it gave full disclosure on other VNRs.
So now comes the FCC's chairman, Kevin Martin, on the topic. Yesterday he told some reporters, including from Broadcasting & Cable magazine, that Comcast got the first fine because it didn't agree to waive the FCC's time-limit on studying such alleged infractions. According to B&C, Martin said there actually were "dozens, if not hundreds" of complaints against many companies over VNRs but that the other companies all agreed to give the FCC more time to examine the complaints in something called "tolling agreements." Then he said:
"I believe Comcast had initially told our Enforcement Bureau that they would also agree to a tolling agreement. ... But then they decided they would not. So we were faced with a choice of issuing the NAL [notice of apparent liability] or allowing the time to lapse so we would never be able to take any enforcement action against them. And so, faced with that decision, we decided we would issue an NAL."
Does this mean Comcast would not have been fined if it gave the FCC more time? This seems Ironic. Is the time limit unreasonable? Was Comcast, led by Brian L. Roberts, trying to force FCC regulators' hands on a rule that it opposed?
Comcast spokeswoman Sena Fitzmaurice told B&C: "The commission had our response to the VNR inquiry for several months when they requested a continued delay. ... We declined because we were -- and remain -- confident of our position on the merits: That the statute does not apply to cable programming, and that even if it did, there was no violation because there was no exchange of value or benefit to CN8 or Comcast."
