Free Airtime For Pols Would Hike Ad Rates, Industry Predicts

Advertisers are likely to see rate increases if the Federal Communications Commission gives free TV airtime to political candidates, said industry executives.
FCC Chairman Bill Kennard said last week his agency will explore the possibility of requesting broadcasters to provide free or discounted airtime for candidates on federal and state levels. Prominent members of Congress vowed to block any ruling, citing it is beyond the FCC’s purview.
Not surprisingly, ad industry groups and agencies are balking at the potential ramifications.
“Certainly this would have a negative effect on advertisers,” said Allen Banks, executive vice president and director of media for Saatchi & Saatchi. “One or two things could happen: Either the time comes out of the commercial pool–and the prices for advertisers go up–or broadcasters cut into programming time and the value of the medium is eroded. Advertisers lose either way.”
“The broadcasters can swallow this or pass it on,” added Dan Jaffe, executive vice president of the Association of National Advertisers.
“We don’t know yet what the consequences of free airtime will be but we can assume it will have an adverse effect on advertisers,” said Bob Okun, vice president of NBC, Washington.
President Clinton asked the FCC to look into the issue. Kennard appears to have the support of enough commissioners to move ahead. Two of the five commissioners, however, do not believe free time is within the agency’s scope. An aide to FCC Commissioner Harold Furchtgott-Roth said, “The commissioner is concerned that free airtime will be a tax on broadcasters.”
–with Hank Him and Andrew McMains