Policy

Kids’ Ads Cost Nick, ABC Family $1.5M

10/21/2004 8:24 AM Eastern

The Federal Communications Commission slapped the parent companies of Nickelodeon and ABC Family with stiff fines for running too many commercials during children’s programming.

Under consent decrees announced Thursday, Nickelodeon parent Viacom Inc. will pay the U.S. Treasury a $1 million penalty, while ABC Family owner The Walt Disney Co. agreed to pay the government $500,000.

The FCC limits the amount of commercials children’s networks can run to 10 minutes per hour on weekends and 12 minutes on weekdays, under the Children’s Television Act of 1990.

During a routine FCC audit of programming carried by Cox Communications Inc.’s San Diego system, the commission found that Nickelodeon violated commercial limits Nov. 1 and 8, 2003.

After a subsequent inquiry, the FCC said Viacom acknowledged that from Oct. 1, 2003-Aug. 10, 2004, there were 591 instances in which Nickelodeon programs inadvertently contained “commercial matter” in excess of FCC limits, and there were 145 instances in which Nickelodeon aired “program-length commercials.”

A source said that if a program on a kids’ network contains commercials that feature the characters on the show, the entire program is deemed a commercial.

The consent decree will have a more significant financial impact on Nickelodeon than ABC Family since as part of its consent decree, Viacom and Nickelodeon agreed to reduce the number of 30-second commercials the network will run over the next 10 months by 1,021.

Nickelodeon officials said the violations weren’t intentional, noting that 85% of the shows examined in the inquiry were found to have been under FCC commercial limits.

“We were extremely upset to discover that we exceeded our allotted commercial time due to human errors and computer-system problems that occurred in our commercial-logging systems,” spokesman Dan Martinsen said in a prepared statement.

“While the vast majority of our examined programming hours were well under the FCC commercial allotments, we take full responsibility for any errors, and we have initiated new procedures to help ensure that this will not happen again,” he added.

The FCC said it discovered the ABC Family violations during routine audits in the fourth quarter of 2003 of the network’s programming carried by Time Warner Cable’s Hawaii system and Charter Communications Inc.’s Spring, Texas, operation.

After the FCC notified ABC Family of potential violations of commercial limits, the commission said the network found that it violated FCC rules in 31 half-hour episodes that it ran from July 1, 2003-July 12, 2004, by running commercial for products that were featured in the actual programming.

ABC Family spokeswoman Nicole Nichols said in a prepared statement that the violations occurred as a result of a computer traffic system ABC Family previously used “that did not read for notations regarding special children’s-advertising restrictions,” and that commercials were unintentionally placed in related shows.

“Once we became aware of the mistake, we did a thorough, voluntary review of our operation, and we have since revised our computer system to prevent future errors,” Nichols added, noting that the network didn’t benefit economically from the error.

While the FCC audited affiliates such as Cox, Charter and Time Warner during the inquiry, the commission said nearly all affiliates of Nickelodeon and ABC Family carried programming that violated FCC commercial limits.

The commission hasn’t taken any action against any cable or satellite affiliates that carry the networks.

September