AAF Government Report

October 30, 2009

Clark Rector Jr., Executive Vice President – Government Affairs

FCC to Scrutinize Children’s Television and Advertising

The Federal Communications Commission has released a Notice of Inquiry, "Empowering Parents and Protecting Children in an Evolving Landscape.” Many of the issues raised in the NOI seem to suggest that there may be an inherent bias against advertising. The following issues in the NOI are among those that raise concern:

  • One significant concern with children’s exposure to media is the harms that may arise from advertising specifically directed to children and used to influence children’s consumption of products.

  • Exposure to excessive and exploitative advertisements is a significant risk children face from electronic media. Advertisements of particular concern to children include: (i) those that promote products specifically to children ;(ii) those that promote unhealthy food, thereby contributing to childhood obesity, and (iii) those that contain inappropriate content, such as offensive language, sexual content, and violence.

  • We invite information about the effectiveness of these (CTA) rules in limiting commercial material viewed by children on television and how they might be improved.

  • The CTA’s limits apply only to broadcast, cable, and satellite television. To what extent are children exposed to excessive and exploitative advertisements on media other than television? What actions, if any, should government take to create incentives to limit the exposure of children to advertisements?

The NOI is expected to be published in the Federal Register around the end of the year. Initial comments will be due sixty days thereafter.
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House Committee Approves CFPA

On October 29, the House Energy and Commerce Committee approved H.R. 3126, the Consumer Financial Protection Agency Act. The bill has already passed the House Financial Services Committee and will next be considered by the full House of Representatives. As written, the legislation would have serious implications for the advertising industry.

The bill would transfer much of the regulatory authority for financial products and services from the Federal Trade Commission to the new CFPA. However, the FTC would retain some authority in financial products and services matters. The bill would greatly expand the regulatory authority of both agencies. For example:

  • The bill would grant the new CFPA rulemaking authority under the vague and unclear “unfairness” standard. This goes beyond the current authority of the FTC which was rightly limited by Congress.

  • The FTC would be given expedited rulemaking authority under the Administrative Procedures Act. The agency currently operates under the Magnuson-Moss rulemaking procedures which insure careful deliberation and more rigorous safeguards.

  • The Commission would be granted expanded “aiding and abetting” authority that could implicate both advertising agencies and the media.

In addition, H.R. 3126 would give the states authority to enforce regulations adopted by the CFPA and enact even stricter laws of their own. Financial advertisers could be subject to regulation by the CFPA, the FTC and numerous states under different and potentially contradictory standards.

Republicans offered a number of amendments to eliminate many of these provisions, but all failed. The bill was approved on a largely party line vote.
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Congressman Targets Food Advertising

Congressman Dennis Kucinich, D-Ohio, has sent a “Dear Colleague” letter to other members of Congress announcing his intention to introduce legislation to “eliminate the tax deductibility of fast food and junk food advertising directed at children.” The Congressman is inviting other members to join him as a cosponsor.
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