states that in its opinion "the message, if subjected to a reasonable interpretation, is nothing more than a bona fide and public spirited attempt to acquaint parents with the general problem of hyperactivity in children." WSVA-TV was not informed that Ciba had funded the announcement, and it was unaware of the details of production, other than it had been produced by NTN on behalf of AAP.

SUMMARY OF PLEADINGS

6. NWRO asserts that the AAP identification in the announcement does not adequately inform the public of Ciba's involvement and interest in the film; that the broadcast of the announcement violates Sections 317 and 508 of the Communications Act of 1934, as amended, which relate to disclosure of payment for the broadcast of matter, and that WSVA-TV is therefore subject to sanctions by the Commission. NWRO contends that because Ciba financed the production of the announcement, it should have been identified as the sponsor pursuant to the Commission's sponsorship identification requirements, and that AAP violated Sections 508 (b) and (c) in failing to disclose to WSVA information as to consideration paid for the "inclusion of any matter as a part or all of the announcement" because Ciba's financing constituted such consideration.

7. AAP and NTN, in a joint response, assert that there was no violation of Section 317 or 508; that Ciba paid no money or other consideration for the inclusion of any matter in the program because there was no understanding with Ciba concerning any mention of treatment with drugs or any other part of the content of the announcement and because the committees of AAP and its Executive Director were solely responsible for control of content and for review and final approval of the announcement. AAP and NTN further state that neither was paid any money beyond the actual cost of production, neither received any service or property, and that the word "medication" as used in the announcement was reasonably related to the legitimate educational use of the film. They maintain that the examples set forth in Applicability of Sponsorship Identification Rules, 40 FCC 141 (1963) indicate no Congressional intent to require disclosure in a situation such as that presented here, and that examples where no disclosure is stated to be required include those of business enterprises which have assisted in the production of a program by providing recordings, film material or other services but where no additional payment has been made to the broadcast station or program producer for inclusion of the material or for any reference to the business enterprise or its products beyond what is "reasonably related to the use of such service or property" in the program. AAP and NTN also cite Sections 317(a) (1) and 508(f) of the Act in support of their position.

8. In this regard Gilmore (WSVA-TV) argues that the requirement of an announcement under Section 508 does not apply to those who, like Ciba, underwrite production costs of public service announcements for non-profit organizations such as AAP. In support of this assertion, the licensee cites the Commission's Report and Order of

41 F.C.C. 2d

May 1, 1963, 34 FCC 829, and its Applicability of Sponsorship Identification Rules, supra, Examples 10-21 and 26. Example 26 is as follows:

(a) A bus company prepares a scenic travel film which it furnishes free to broadcast stations. No mention is made in the film of the company or its buses. No announcement is required because there is no payment other than the matter furnished for broadcast and there is no mention of the bus company.

(b) Same situation as in (a), except that a bus, clearly identifiable as that of the bus company which supplied the film, is shown fleetingly in highway views in a manner reasonably related to that travel program. No announcement is required.

(c) Same situation as in (a), except that the bus, clearly identifiable as that of the bus company which supplied the film, is shown to an extent disproportionate to the subject matter of the film. An announcement is required, because in this case by the use of the film the broadcaster has impliedly agreed to broadcast an identification beyond that reasonably related to the subject matter of the film. 9. NWRO submits that WSVA-TV violated Section 317 (c) of the Act by not fulfilling its responsibility to use "reasonable diligence" to obtain information from the AAP or NTN regarding Ciba's role in financing the film. NWRO states that part of the reasonable diligence required of stations under Commission regulations includes a duty to have a sponsorship announcement that "fully and fairly discloses the true identity of the person or persons by whom or in whose behalf (such) payments are made or promised." 3

10. In response, Gilmore states that it did not violate Section 317 (c) of the Act, and that this section was not intended to impose absolute liability on a licensee who unknowingly broadcasts programming material without a proper sponsorship identification as a result of the failure of others to provide it with information required by Section 508. In this regard the licensee cites former Commission Chairman Frederick Ford's statement in the U.S. Code Congressional and Administrative News (H.R. Rep. No. 1800, 86th Cong., 2nd Sess., 3539, (1960)):

Subsection (c) of the proposed Section 317 would require station licensees to exercise reasonable diligence to obtain from its employees and others information to enable the licensee to make appropriate announcement of sponsorship. The term reasonable diligence' is appropriate in the circumstances, since it would require the licensee to take appropriate steps to secure such information, but it would not place a licensee in the position of being an insurer, nor does this condition permit a licensee to escape responsibility for sponsorship announcements by inactivity on his part. We believe that the term 'reasonable diligence' has a sufficiently accepted legal meaning so as to permit the Commission to apply this standard in given factual situations.

The NWRO emphasizes, however, that the Chairman did say that "reasonable diligence does require the licensee to take appropriate steps to secure such information as to enable it to make an appropriate announcement of sponsorship."

Section 73.654 (f) in its entirety reads:

The announcement required by this section shall fully and fairly disclose the true identity of the person or persons by whom or in whose behalf such payment is made or promised, or from whom or in whose behalf such services or other valuable consideration is received, or by whom the material or services referred to in paragraph (d) of this section are furnished. Where an agent or other person contracts or otherwise makes arrangements with a station on behalf of another, and such fact is known to the station, the announcement shall disclose the identity of the person or persons in whose behalf such agent is acting instead of the name of such agent.

11. The licensee argues that WSVA-TV satisfied the reasonable diligence requirement when Mrs. Plum, its station's Public Service and Promotion Coordinator, pre-screened the film, since it had no knowledge that production costs had been paid by Ciba. To this argument, the NWRO responds that Mrs. Plum informed its representative in a telephone conversation in early March 1972, that when public service announcements financed by nonprofit organizations are sent out, the organization under whose name the spot is being distributed often informs the station in a cover letter who has financed the production of the spot. The NWRO submits that since station personnel admit that this is an "established practice," any review of the film should have included an inquiry into the source of the financing as part of the station's duty of reasonable diligence, since it asserts that Mrs. Plum could easily have made an inquiry to AAP or NTN and discovered the source of the financing.

12. NWRO contends further that WSVA-TV violated Section 317 (a) (2) of the Act, which, it states, "requires sponsorship identification in the broadcast of any material furnished without charge that discusses a controversial issue." NWRO asserts that the use of Ritalin and similar drugs for the treatment of hyperactivity presents a controversial issue. The complainant cites, In the Matter of Amendment of Sections 3.119, 3.289, 3.654, and 3.789 of the Commission's Rules, 34 FCC 829 at 847, 848, 25 RR 1575 at 1598 (1963) for the proposition, in NWRO's words, that,

With respect to political programs or programs involving the discussion of controversial issues, more frequent identification and greater specificity is required as to the true identity of those furnishing the program.

13. The licensee, and AAP and NTN reply that WSVA-TV did not violate Section 317(a) (2) because the announcement did not include a discussion of the merits of Ritalin or any controversial issue of public importance for which "any film, records, transcriptions, talent, scripts, or other material or service have been furnished as an inducement to broadcast." They maintain that none of the materials covered by Section 317(a) (2)-films, records, transcriptions, etc.were supplied by Ciba; that the pharmaceutical company's furnishing of medical research material on hyperactivity at the request of NTN did not constitute an "inducement to broadcast"; that, in any event, Section 317 (a) (2) applies to the broadcast of a program containing a controversial issue of public importance and not to the production of such a program; that production is covered by Section 508 of the Act and there is no similar provision in Section 317. The AAP and NTN also refer to Healey v. FCC, 23 RR 2d 2175, 2182 (D.C. Cir., March 3, 1972) in which the Court held that the fact that a matter is newsworthy does not mean it is also a matter of public controversy. The Court recognized that a contrary decision under the fairness doctrine would "so inhibit television and radio as to destroy a good part of their public usefulness." The AAP and NTN further submit that Interpretation number 11 in the Commission's Applicability of

4 NWRO has furnished no evidence, however, that it was an "established practice" for the station to receive or seek such information.

Sponsorship Identification Rules, supra, at 146, is applicable to their argument:

News releases are furnished to a station by Government, business, labor and civic organizations, and private persons, with respect to their activities, and editorial comment therefrom is used on a program. No announcement is required. 14. In response, NWRO states that the controversial issue involved was not the use of Ritalin, but actually the use of medication on children who exhibit symptoms of hyperactivity. The complainant argues that the fact that medication is only one of several possible solutions to hyperactivity mentioned in the spot and the fact that Ritalin is not mentioned by name does not mean that the Commission cannot look beyond the words of the script to ascertain whether the spot involves the discussion of an issue of public controversy. In this regard, the NWRO states that the Commission ruled in the Esso case that a series of advertisements dealt with the Trans-Alaska pipeline controversy, even though the announcements never mentioned the pipeline. Esso, 30 FCC 2d 643 (1971); 31 FCC 2d 729 (1971), 32 FCC 2d 714 (1971).

15. NWRO also maintains that Ciba's furnishing of medical information to NTN constituted an inducement to broadcast; that interpretation number 11 in the Applicability of Sponsorship Identification Rules, supra, at 146 is not applicable; that NTN cannot be equated with a station, that unlike a station NTN is not required to make independent editorial decisions under the Communications Act; that it produces an announcement to meet the needs and desires of its clients; that it is not unthinkable that NTN's editorial judgment may have been affected by the knowledge that Ciba was paying the bill; that Section 317 of the Act pertains to both the broadcast and production of controversial issues; that to hold otherwise would destroy the utility of Section 317, and that although Ciba's role was technically in the production of the spot, the material it provided was obviously intended to be broadcast. NWRO also asserts that Ciba's financing of the production was in fact payment to production personnel and that according to the general statement preceding the specific examples of Part D of the Applicability of Sponsorship Identification Rules, supra, at 147, and a footnote to that part, an announcement is required by Commission regulations:

Part D: Where service or property is furnished free for use on or in connection with a program, with the agreement, express or implied, that there will be an identification beyond mere use of the service or property in the program. Footnote 3: Of course in all these cases, if there is payment to the station or production personnel in consideration for the exposure, an announcement is required.

16. NWRO further alleges that WSVA-TV violated Section 73.654 (g) of the Commission Rules which requires identification of any

Section 73.654 (g) states:

In the case of any program, other than a program advertising commercial products or services, which is sponsored, paid for, or furnished, either in whole or in part, or for which material or services referred to in paragraph (d) of this section are furnished, by a corporation, committee, association, or other unincorporated group, the announcement required by this section shall disclose the name of such corporation, committee, association, or other unincorporated group. In each such case the station

corporation which pays for programs other than those advertising commercial products or services, and that Ciba's role in the financing of the announcement clearly demands identification under this regulation.

17. AAP and NTN state however, that Sections 73.654(f) and (g) of the Commission's Rules were not meant to define any new situation in which identification must be made, but were merely implemental of the substantial provisions in Section 317 of the Act. In rebuttal, the complainant argues that these subsections confirm its view of the meaning of the statute precisely because they provide the Commission's contemporaneous interpretation of the statute's language.

18. NWRO concludes its complaint by alleging that the announcement encourages parents to request drugs for their highly active children, bringing increased pressure on physicians to prescribe Ritalin.

19. In response, AAP and NTN conclude that any identification of Ciba in the spot would have appeared to be an endorsement of Ciba and its products by AAP; that stations would not accept such public service announcements because commercial identification would create an air of commercialism; that the AAP has used its official newsletter to publicize the sources of its production funds; that without corporate funding the AAP would be unable to produce public service announcements; and that the text of the announcement is unobjectionable. Gilmore Broadcasting Corporation states that the spot constitutes nothing more than a bona fide and public spirited attempt to acquaint parents with the general problem of hyperactivity and that if the NWRO's allegations were found to be valid, licensees would be reluctant to carry any public service announcement not directly produced by them for fear that it would result in an inadvertent violation of the law.

20. In its reply, NWRO suggests that if the AAP felt that a sponsorship identification would have been detrimental to the effect of the announcement, it could have requested the Commission to waive the announcement requirement under 317(d), Letter to National Broadcasting Company and Young and Rubicam International, Inc., 34 FCC 2d 600, 24 RR 2d 1301 (1972), and that Ritalin, which is a major source of revenue for Ciba, is the most widely used drug for hyperactivity in children. Report of Ciba for Senate Judiciary Committee's Subcommittee to Investigate Juvenile Delinquency, August 6, 1971. Finally NWRO submits that Commission interpretations have not addressed themselves to the question whether industry financing of a public service announcement requires identification of an interested manufacturer as well as the nonprofit group.

DISCUSSION AND RULING

21. We shall deal first with the complainant's contention that AAP violated Sections 508 (b) and (c) of the Act by failing to disclose to

shall require that a list of the chief executive officers or members of the executive committee or of the board of directors of the corporation, committee, association or other unincorporated group shall be made available for public inspection at the studios or general offices of one of the television broadcast stations carrying the program in each community in which the program is broadcast. Such lists shall be kept and made available for a period of 2 years.