NAB DENIES CANDIDATE PRICE GOUGING IN CAMPAIGN AD RATES
Alliance for Better Campaigns report “got it all wrong” in asserting that broadcasters in elections last year “gouged” political candidates and charged exorbitant air time rates, NAB officials said Wed. NAB Pres. Edward Fritts told press briefing in Washington that broadcasters “are abiding by the rules and regulations set forth by the Congress and administered by the FCC… The risks are too high and the rewards too low” for stations to break the law, he said. NAB Gen. Counsel Jack Goodman said stations didn’t steer candidates to premium spots; rather candidates were willing to pay premium rates for fixed ad spots to ensure greater visibility.
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Goodman said no rate complaints had been filed at FCC by candidates in last 5 years, affirming NAB position that price gouging wasn’t occurring. He said “lowest unit charge” (LUC) provision in law requires broadcasters before primaries and elections to charge same discount rates for single ad spots enjoyed by commercial advertisers that buy bulk ad “packages.” Contrary to Alliance claim, the LUC provision has kept rates down, Goodman said.
In response, Alliance Exec. Dir. Paul Taylor said NAB ignored premise of group’s report that broadcasters were taking advantage of law, under which LUC was supposed to prevent price gouging in political ads but provides loophole enabling broadcasters to raise ad rates exponentially. He said report acknowledged station compliance with law and emphasized need for legislative fix to close loophole.
Taylor said Alliance review of 16,000 station rate contracts with candidates at 10 network affiliates in large markets revealed rate increases 50%-200% in months leading up to elections. He agreed with NAB contention that contracts fluctuated from market to market, “but it is absolutely crystal clear that market rates are going up throughout the country.” Candidates are deterred from buying lowest available rate since stations can bump ads if higher bid is offered for same air time, and aren’t necessarily eager to buy expensive fixed time slots, he said.
Spokeswoman for Sen. Torricelli (D-N.J.) said current campaign finance law didn’t serve public interest. Despite NAB claim that candidates hadn’t filed rate complaints, “any politician you speak to” will agree that broadcasters charge candidates excessive rates, she said. Torricelli has no intention of introducing legislation that would “dictate news coverage of the networks or television stations or infringe on their constitutional rights to cover the political process,” she said. “But the airwaves are owned by the public and were given to broadcasters with the understanding that they would be used for the public good.”
Dwight Morris, exec. dir. of Campaign Study Group, said legislating campaign finance reform and equal access to airwaves “is a lot more complicated than people make it out to be.” Whereas Senate and House candidates spend on average 25%-37% of their campaign budgets on radio and TV air time, others spend nothing on air time, particularly in high density urban districts where direct mail is less costly than air time, which unnecessarily broadcasts ads far beyond targeted legislative districts. Morris said that would pose problem for broadcasters if they were required to ensure mandatory and equal air time for all candidates, since it would be difficult to implement such requirement for all candidates, some of whom run unopposed.