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In Re Application by WAVI BROADCASTING CORP., DAYTON, OHIO For Review of Dismissal of Complaint

Versus Group One Broadcasting Co.




32 F.C.C.2d 421




SEPTEMBER 24, 1971



 [*421]  GENTLEMEN: This is in reference to your Application for Review, filed April 22, 1971, requesting reversal of the Broadcast Bureau's action in dismissing your complaint directed against the use of promotional material based on Pulse audience rating surveys by Group One Broadcasting Co., licensee of Station WONE, Dayton, Ohio.  Also before us are Group One's Opposition to Application for Review, your Reply to the Opposition, and the various correspondence originally entered into by the parties and the Chief, Renewal and Transfer Division.  n1

n1 On June 11, 1971, Group One filed a "Request for Permission to File Additional Pleading" and "Comments on Reply to Opposition to Application for Review."

Briefly summarized, the record before us discloses the following chronology of events.  By letter dated October 15, 1970, you requested an investigation into Group One's use of certain Pulse survey materials.  In substance, you claimed that the promotional materials used by Group One were misleading in that Stations WAVI and WDAO (FM) did not appear thereon thus creating the impression that neither station had a reportable audience.  More specifically, you stated in pertinent part as follows:

Station WONE... is in direct competition with [Stations] WAVI and WDAO [licensed to WAVI Broadcasting Corporation] for advertising in the Dayton market.  Despite its natural competitive advantages [i.e. power and frequency], Station WONE has recently used broadcast ratings in a manner which is clearly false and misleading and contrary to the Commission's announced policy statement.  n2 On September 14, 1970, Station WONE issued a release based upon a  [*422]  July/August, 1970 Pulse, a copy of which is attached hereto.  No mention was made of Stations WAVI and WDAO, which clearly signified to potential advertisers that neither station had a reportable audience.  Moreover, WAVI Broadcasting Corporation has now been advised that during some time periods, Station WDAO had a greater share of the audience than any of the three stations listed in the release, and in many cases, had a larger share than one or more of the stations listed.  n3 It is submitted that the omission of Station WDAO and its share of the audience was clearly intended to mislead potential advertisers.

An earlier release by Station WONE was based upon the April/May, 1970

n2 WAVI relied upon our Public Notice of June 13, 1963, and the Federal Trade Commission News Release of July 8, 1965 which state, respectively, in pertinent part:

"In using audience research... the licensee must act responsibly.  He therefore, has an obligation to take reasonable precautions to insure that a survey which he uses in an advertising campaign is valid (e.g. that it is properly conceived, reasonably free from bias, has an adequate sample).  He also has an obligation to act responsibly in the use he makes of the survey.  He may not, for example, quote a portion of the survey out of context so as to leave a false and misleading impression of the relative ranking of his station in the market.

"A person (or firm) making a claim concerning the size, composition or other important characteristics of a listening or viewing audience is responsible for seeing to it that the claim is truthful and not deceptive.  If he bases his claim on the results of an audience survey, he assumes the responsibility for interpreting the data accurately...  It is also improper to cite or quote from a survey report or survey data in such a way as to create a misleading impression of the results of the survey, as by unfairly basing audience claims on results achieved only during certain periods of the broadcast day or on a survey of only a segment of the total potential audience."

n3 The three stations listed were WONE, WING, and WHIO.

An earlier release by Station WONE was based upon the April/May, 1970 Pulse.  In this case, four stations were listed, including one FM station.  n4 Again, no mention was made of Stations WAVI and WDAO even though each had a reportable audience during that period and in some periods WDAO had a greater share of the audience than some of the four stations reported. 

n4 The stations listed for the April-May survey were WONE, WING, WHIO and WHIO-FM.

In accordance with usual procedures when complaints such as yours are received, the Broadcast Bureau, by letter dated November 9, 1970, requested Group One's comments on the matters raised in your letter of October 15, 1970.  In its response of November 24, 1970, Group One stated in pertinent part as follows:

The research material in question was presented for specific advertisers in accord with common industry practice in presenting audience information only on stations that are considered competitive.  Only rarely would information on all stations rated in a survey be included in an advertiser pitch as this would be meaningless to an advertiser and in effect would require a station to reproduce an entire survey each time a sales presentation was made.  Radio stations throughout the country regularly present advertisers comparative audience information for as few as 2 stations in a given market.  The omission of some stations is in no way meant to be misleading, but rather indicates that the sales presentation contains information on only those stations that are being considered for a share of the advertiser's budget.

In the specific instance, WAVI and WDAO(FM) were excluded from research prepared independently by WONE and the McGaveren-Guild-PGW research director because these stations were not considered competitive factors by either WONE or its national sales representative.  WAVI was not included because of low audience levels, in fact so low that this station was not even rated in the July-August 1970 Dayton, Ohio 4 County Metro Area Radio-Pulse.  WDAO is an ethnic, FM station, and is generally considered for separate budgets by advertisers.

In support of its position that "general industry practice" dictates the inclusion in such promotional material of a limited number of competing stations, Group One submitted letters from various advertising agencies confirming its statements, and further submitted promotional sheets distributed by stations in large markets where as few as one-fourth of the stations are included.  In addition, the staff requested of Group One copies of the surveys upon which its promotional material was based.  This information was furnished with a request that, because of contractual obligations between the survey organization and Group One, the contents be kept confidential.  n5

n5 The pertinent clause reads:

"It is understood and agreed that the report will be kept strictly confidential, that the property therein remains in THE PULSE, INC., that neither the whole nor any part thereof may be disclosed to anyone but the purchaser, its clients or bona-fide prospective clients and that physical possession of the report shall not be released by the purchaser or its representative...  Violation of these privileges may result in immediate cancellation of the subscription to PULSE, and may subject the subscriber to claims for damages which may be sustained by PULSE or others."

 [*423]  In a subsequent letter dated January 5, 1971, you suggested that this Commission should undertake a thorough review of what you claim may be "widespread or nationwide deceptive practices" in this area.  You also took issue with Group One's supporting evidence as set forth in its response of November 24, 1971, claiming that practices in the larger markets cited "have little relevance to the Dayton market." You further stated that Group One failed to answer the charge that "... the omission of the reportable, and perhaps larger ratings, of Stations WAVI and WDAO-FM in certain time periods is a misleading and deceptive practice." n6 You also stated: "Moreover, it is understood that at least fifty percent (50%) or more of WDAO-FM's audience, as measured by Pulse, must be assumed to be non-ethnic, based upon the survey techniques used." Finally, you again insisted that your stations are in direct competition with WONE, that your stations were arbitrarily omitted from the Group One promotional releases, and that the omission was unfair and tended to mislead and deceive potential advertisers. 

n6 In its letters and subsequent pleadings, WAVI Broadcasting concedes that it has not actually examined the survey reports in question.

By letter dated February 10, 1971, Group One responded to your additional charges.  First, it emphasizes that "... WAVI reported low audience levels in both Pulse surveys... so low in fact that the station was not even rated in the July/August survey..." Group One also emphasized that WDAO (FM) is indeed a black-oriented station and, therefore, not directly competitive with WONE; that its stationery promotes its "Solid Soul" format; and that, as shown in a letter from The Pulse, Inc., WDAO (FM)'s audience was, respectively, 89.4% and 97% black.  Group One also submitted additional promotional material employed by Dayton Stations WING and WHIO, pointing out that, although the two surveys upon which they were based rated fourteen stations in one case and twelve in the other, each release listed but four stations.  Group One concluded:

The WING and WHIO materials further attest to the fact that it is accepted industry practice for stations to show comparisons of ratings for only those stations considered to be competitors for the audience the particular advertisers seek to reach, even though more stations are rated in a given survey from which the comparisons are obtained.

Finally, Group One notes that in one of these promotions

... for every age group and in every time period that the station was on the air, WAVI is shown either as having an audience too small to measure, or of being in last place.  It would appear, therefore, that WAVI would be injured more by including its ratings in such material, than by not mentioning it at all.

By letter of March 22, 1971, the Chief, Renewal and Transfer Division, informed WAVI Broadcasting that:

We have carefully examined the correspondence and material submitted in this matter, and we conclude that there has been no obvious abuse of the Pulse surveys by Station WONE.  Accordingly, we believe that no further Commission action is warranted.

 [*424]  The Bureau further stated that "... questions dealing with the propriety of the use of such audience rating surveys by broadcast licensees are primarily within the jurisdiction of the Federal Trade Commission." The Bureau pointed out that absent any obvious abuse of a survey by a licensee, the FTC, not this Commission, is the proper body to consider such questions as were raised by the complaint.  n7 The Bureau described an obvious abuse as "failure to include a disclaimer, the distortion or exaggeration of survey, results, or the use of outdated or otherwise unreliable data."

n7 As we stated in our Public Notice of June 13, 1963, "The Commission intends ordinarily to refer complaints dealing with questionable use of broadcast ratings to the Federal Trade Commission for that agency's consideration."

Thereafter, the subject Application for Review, requesting review and reversal of the Broadcast Bureau's disposition of your complaint, was filed on April 22, 1971.  In addition to the arguments advanced in your original complaint, you plead for reversal stating:

(a) The action of the Broadcast Bureau establishes a policy as to the use of rating surveys in promotional material which is contrary to prior Commission decisions, policy statements, and the public interest; and

(b) The action presents new and important matters of law and policy in interpretations of standards adopted by the Commission concerning the use of rating surveys.

Before considering the substantive matters raised in your Application for Review, several procedural matters raised by the pleadings will be discussed.  First, the respondent, Group One Broadcasting Co., challenged the timeliness of the Application for Review, which was filed thirty-one (31) calendar days after the mailing of the Broadcast Bureau's letter initially disposing of this matter.  Section 1.115(d) of our Rules requires such applications to be filed within thirty (30) days from the date of release of the document containing the full text of the action in question, or if such a document is not released, after release of a public notice announcing the action.

As the Bureau's action was taken in a letter directed to the complainant (which could not have been received until at least the next day), and no public notice regarding this matter was released, there is no merit to the challenge of the Application's timeliness.  Nor do we believe that the Application raises any new matter, as alleged by Group One, which would at this time preclude our review of the Bureau's action (Section 1.115[c] of the Rules).

Also, in your reply, you demand that Group One's Opposition be returned as unacceptable for filing, for alleged violation of the Commission's ex parte rules (citing Sections 1.1201[f] and 1.1201[g]).  You protest the forwarding to the Commission, without service on WAVI Broadcasting, of copies of the Pulse surveys in question.  Contrary to your assertion, the instant proceeding is clearly not a "restricted proceeding" as defined by our rules; and, accordingly, your argument is without merit.

 [*425]  As to your substantive allegations, we believe it is an acceptable practice to exclude from such a presentation stations which may have a higher ranking in a number of subcategories than one or more of those stations actually included.  n8 The station using such survey results may compare itself with any other stations it chooses, so long as it does not misrepresent the actual ranking of those listed, and does not, for example, claim to be "number 1" when the survey results are otherwise.  We feel it is appropriate in selecting stations from the survey for inclusion in promotional material, to consider such factors as competitiveness; and, contrary to your position, we further believe that a licensee may make a subjective, good faith determination as to which stations are its competitors for audience and advertising dollars.  n9 The promotional material submitted with the complaint does not on its face reveal any such misuse, nor have you offered any evidence that, in its verbal presentations, WONE misrepresented actual rankings of the listed stations.  And while it may be true that in a small number of subcategories the audience estimates for WDAO (FM) exceeded those for one or more of the stations listed on WONE's promotional sheets (although WONE states that, overall, WAVI and WDAO (FM) ranked well below the listed stations) we do not find it necessary to reach this factual question in responding to your Application for Review. 

n8 In this regard we would note the relative complexity of audience surveys, which are broken down into many subcategories of time period, sex and age groups.  In addition, we note that, in their promotional material, many stations list competitors only by such designations as "Stations X, Y and Z."

n9 We further note that, in your initial complaint, you stated that "WDAO... programs independently for the black community in Dayton..."

Moreover, we do not concur with your suggestion that the recipients of such promotional materials are "unwary consumers." Instead we believe that the advertisers and agencies at which these presentations are directed are sophisticated, discerning businessmen who are exposed to them on a continual basis, are fully cognizant of the make-up of markets with which they are concerned, and are capable of properly interpreting and employing the promotions.  Nor, in the last analysis, can we perceive any real injury to Stations WAVI and WDAO (FM) resulting from their omission from the WONE promotions, and we reject your conclusion that their "... exclusion... is equally as serious an abuse as erroneously reporting a station's ratings."

It is our position that the licensee's obligation in these matters is to act responsibly, i.e., to refrain from engaging in an abuse such as "hypoing" or quoting a portion of a survey out of context so as to  [*426]  create a false and misleading impression of his station's ranking in the market.  n10 As the Broadcast Bureau indicated, in the absence of such obvious abuse this Commission cannot act.  Unless an adverse determination is made by the Federal Trade Commission, whose jurisdiction in these matters, is primary, we will not take punitive action against a licensee based on a complaint such as WAVI Broadcasting has filed. 

n10 In this connection we also note that the promotional material used by Group One included the following disclaimer: "Figures cited or quoted are estimates only or are based upon estimates, and are not accurate to any precise mathematical degree."

Accordingly, your Application for Review is DENIED, and we affirm the Broadcast Bureau's disposition of your complaint.

Commissioner Bartley concurring in the result, Commissioner Johnson dissenting and issuing a statement, Commissioners H. Rex Lee, Wells, and Houser absent.








(Application for Review of staff action filed by WAVI Broadcasting Corporation, licensee of WAVI and WDAO (FM), Dayton, Ohio, regarding allegedly misleading use of ratings in promotional materials by WONE.)

The nub of this case is this: should we somewhat blithely dismiss a complaint by one licensee against another pertaining to the allegedly deceptive and misleading use of stations' ratings in promotional materials?  That's what the majority has done.

In the past, we have stated quite forcefully our concern with the misuses of ratings, which are the life-blood of commercial broadcasting operations.  For example, in a Public Notice: n1

n1 Public Notice, FCC 63-544 (June 13, 1963).

[Audience] research is an important selling tool in efforts to obtain advertiser support.  It is not the intention of the Commission to discourage valid audience research or its proper use by broadcast licensees in their selling campaigns.

In using audience research, however, the licensee must act responsibly... in the use he makes of the survey.  He may not, for example, quote a portion of the survey out of context so as to leave a false and misleading impression of the relative ranking of his station in the market.

In 1964, we granted a short-term, one-year license renewal to a licensee who we found to have "hypoed" his ratings in violation of  [*427]  the 1963 Public Notice quoted above.  n2 Why this sudden abandonment of concern? 

n2 Star Stations of Indiana, Inc., 3 R.R. 2d 745 (1964).

Assuming for the purposes of argument that the ratings reveal an accurate picture of who is listening to what stations at what time, I think all would agree that it is important that stations and advertisers using the ratings use them in a fair and honest manner.  If the ratings system is in any way corrupted by false or deceptive use, then the integrity and validity of the whole process of paying for shows through mass-audience-based advertising becomes open to great doubt.

In this case WDAO (FM) complains that WONE published promotional material containing portions of a Pulse rating without listing WDAO (FM), despite the fact that WDAO (FM) scored higher ratings in various sub-categories of listeners than did some of the stations listed by WONE as competing with WONE.

WONE attempts to explain its failure to include WDAO (FM) by stating that WDAO (FM) caters to a black audience, and thus is not truly competitive with WONE.  It is apparently true that WDAO (FM) is a "soul" station.  Yet it seems to me that black listeners are as good purchasers of soap and tooth paste as white listeners.

Agencies like the FCC are often charged with being simply the handmaidens of the very industries they are set up to regulate.  That may or may not be a fair conclusion.  Certainly I have often been disappointed with the Commission's failure to take action I felt compelled by any reasonable interpretation of the "public interest."

But even if one is to conceive of a Commissioner's role in the what's-best-for-business sense, it seems to me this decision is wrong.  The prosperity of the broadcasting industry -- like any other -- is dependent upon its maintaining some minimal standards of business ethics for those with whom it deals.  Broadcasters are in the business of selling audience to advertisers.  Misrepresentations as to the size of that audience -- or as to comparisons with competitors' audiences -- constitute a measure of fraud that strikes at the heart of the broadcaster-advertiser bargain.  There are other media available to advertisers.  Their support of broadcasting is dependent, at least in part, on their getting their money's worth and their not being deceived, intentionally or otherwise.

When this agency sanctions fraud of advertisers, as it did in the WIFE n3 and Cocoa Beach n4 cases, when it winks at the kind of misuse  [*428]  of ratings represented by WDAO's complaints here, it is serving neither the broadcasting industry nor the public.  I am at a loss to explain its rationale for non-action.  I would instead instruct the Broadcast Bureau to conduct further investigation of this complaint so that we would be able to evaluate this complaint more properly -- perhaps leading to a forfeiture or hearing. 

n3 Star Stations of Indiana, Inc., 19 F.C.C. 2d 991 (1969).

n4 WKKO, Inc., 24 F.C.C. 2d 889 (1970).

In any event, I cannot support this decision, and therefore dissent.

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