AAF Government Report

July 23, 2009

Clark Rector Jr., Executive Vice President – Government Affairs

Senate Committee Looks at Advertising

The Senate Commerce Committee conducted a July 22 hearing on advertising trends and consumer protection. The primary focus of the hearing was on proposed changes to Federal Trade Commission guidelines on the use of testimonials and endorsements in advertising.

Many in the industry are concerned that the proposed changes to the guides would make it difficult to use the commonly used and understood “results not typical” disclaimer and mandate a burdensome disclaimer of generally expected results. As one witness explained to the committee, in some cases, such as exercise equipment and weight loss products, generally expected results are impossible to quantify as much is beyond the advertisers control, such as beginning weight, age, use of product, etc.
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Children’s Television Scrutinized

In a July 22 hearing, the FCC and Senate Commerce Committee are discussed possible ways to update the 20-year old Children’s Television Act.

Chairman Rockefeller suggested that the current requirement that broadcasters air three hours of educational programming a week may need to be both expanded and extended to cable channels. “Our media landscape has changed dramatically during the last two decades,” he said.

Chairman Genochowski told the committee that he expects the FCC to ban digital TV broadcasters from airing interactive ads during children’s shows. The Commission had previously reached the conclusion the technology should be off-limits to children. Genochowski stated, “based on what I’ve seen, it seems to me that that tentative conclusion should become a rule.”
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FCC Chairman Plans Overhaul

n a letter to fellow Commissioner Robert McDowell, FCC Chairman Julius Genachowski indicated his intent to overhaul the agency calling it, “a matter of great urgency.” Genachowski wrote that he has appointed Mary Beth Richards, formerly deputy general counsel and acting general managing director as the special counsel for FCC reform, “to insure high level attention to this vitally important issue.”

During Genachowski’s confirmation hearings before the Senate Commerce Committee he was warned by Chairman Rockefeller, “Fix this agency or we will fix it for you. Prove to us that the FCC is not battered beyond repair.”

Republican Commissioner Mc Dowell has recently suggested several steps to improve the agency. He calls for emphasis on communications and for additional financial audits. Mr. McDowell also called for reviews of the contracting process, regulatory fees and an ethics audit to “ensure that all of our protocols, rules and conduct are up to the highest standards.”
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Maine Enacts Privacy Restrictions

Legislation recently enacted in Maine will restrict companies’ ability to collect and use f personal and health information obtained from a minor unless the company has first obtained verifiable consent from the minor’s parent. Unless verifiable consent is obtained, the Maine law will not permit the information to be used for marketing products or services (such as SAT preparation courses)

Interestingly, the federal Children’s Online Privacy Protection Act restricts information gathering from those 13 and under while permitting parents to make the decision as to how their child may be marketed to. While the Maine law place absolute restrictions on marketing, it does not define a “minor” age leaving many commentators to assume the law applies to those under 18 years of age.
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