1. Distrust of commercial messages due to exaggeration (puffery) and outright falsehood

2. Commercial speech is ofless social value than political speech --               “mere advertising” is not essential to the process of self-government (Mekeljohn)

most active federal agency

makes sure people are not victimized by unfair, deceptive or misleading advertising

Since FTC’s establishment, both Congress and SC have treated advertising as an issue of business and property law rather than as a question of freedom of speech

FTC is the most active federal agency to enforce “truth-in-advertising”

Established in 1914 by Congress passing the Federal Trade Commission Act

Independent govt. agency headed by 5 commissioners appointed by the President and approved by Senate

No more than 3 commissioners may be from the same party; all serve staggered seven-year terms.

Only about 5 percent of FTC’s budget is spent on protecting the consumer from false and misleading advertising

 FTC was originally intended to help enforce antitrust laws, particularly those involving “unfair methods of competition in commerce”

 FTC members, however, broadly interpreted the language to include false and misleading advertising (upheld by SC in 1922)

 In 1931, SC curtailed the FTC’s activity on behalf of consumers.

Before the 1980s--had a “tendency” to deceive the most uneducated and gullible consumers.

In the 1980s--(FTC’s basic rules of advertising)

1. “Reasonable consumer”:  The audience for an advertisement is considered to be the “reasonable consumer.”

2. Likelihood of deception:  There must be a likelihood that the ad taken as a whole will actually deceive. (Not mere “tendency”).

3. Significance of the deception: The deception must be “material,” i.e. significant enough to actually influence consumer’s decision to purchase the product/service.

Types of Deceptive Advertising:

Price deceptions

Claiming that the advertised price is a special sale price when it is not, etc.

Bait-and-switch advertising

Consumer is lured to the store with the promise of a bargain, only to be subjected to high-pressure selling for other merchandise

Puffery can be deceptive if it fails the FTC’s 3-part test

Abstract claims and assertions of opinion that are difficult if not impossible to test empirically are called “puffery”

E.g. a certain lotion makes one irresistible to members of the opposite sex; a certain automobile is “the best-looking machine in town;” offering “the world’s best coffee” or “America’s favorite pasta,” etc.

Puffery is not deceptive if it passes the 3-part test (from previous slide), that is if a reasonable consumer would recognize the claim as hyperbole and not be influenced by it.

1. must be truthful and not misleading

2. all claims must be substantiated, must have reasonable basis for all product claims

The FTC permits testimonials in support of products and services on condition that:

A person testifying must be an actual user of the product

The person must have some expertise that qualifies him/her to make claims

The person must adhere to the same basic standards of truth generally applied to other types of advertising;

The person must not be an actor pretending to be an ordinary consumer.

Consumer is lured to the store with the promise of a bargain, only to be subjected to high-pressure selling for other merchandise.

The FTC works with manufacturers and advertisers to avoid, or pre-empt, any legal conflict:

1. Industry guides are available to the public

2. Advisory opinions are given before an advertising campaign

3. Trade regulation rules are published

If a conflict still occurs, the FTC exercises two general types of enforcement powers:

Publicity and negotiation

 -Pressures offending company into stopping false/misleading ads; follows with out-of-court settlements

Legal proceedings

 -Issues a cease-and-desist order (similar to an injunction) that remains in effect indefinitely unless appealed within 60 days to a U.S. Court of Appeals

 -Rarely issues a corrective advertising order that requires a company to spend a percentage of its advertising budget for a specified period to pay for “corrective” messages.

Requires a company to spend a percentage of its advertising budget for a specified period to pay for “corrective” messages.

Issues a cease-and-desist order (similar to an injunction) that remains in effect indefinitely unless appealed within 60 days to a U.S. Court of Appeals

Justifying a law to regulate commercial speech

1. Message content: The commercial message must be truthful and be concerned with a lawful product or service.

2. Government interest: The governmental interest in constraining a truthful message must be legitimate or substantial.

3. Advancement of the government interest:  The regulation must directly advance the government interest.

4. Reasonable fit between ends and means: There must be a “reasonable fit” (as interpreted by the Court) between the goals of a restriction and the means chosen to achieve those goals.

In 1894, the Italian scientist Guglielmo Marconi started his experiments with “wireless telegraphy.”  His filing for a patent in England in June of 1896 was to revolutionize human communication.

The U.S. supreme court accepted a policy of prior restraint of film early in the 20th century.  It lasted until 1981 when Maryland, the last state to have statewide censorship, allowed its film review board to die.

--No prior restraint on films

Radio waves must be rationed

License required to broadcast; granted for 8 years; FCC has powers to revoke the license

Radio waves, a public resource, must be used in the “public interest”

-Licensees do not own any frequency

-Licensees must give equal time for political candidates

-FCC has no power to censor transmission by any station

Radio waves do not recognize national boundaries

Worldwide regulations are developed by treaty through the International Telecommunications Union (ITU)

Radio waves, a public resource (owned by the public), must be used in the “public interest”

Licensees do not own any frequency

Licensees must give equal time for political candidates

But FCC has no power to censor transmission by any station

Wireless Ship Act of 1910: Required most passenger vessels to be equipped with transmitters

Radio Act of 1912 passed to meet the terms of the international radio treaty

-Gave the Commerce Department the authority to regulate broadcast

In 1921 Hoover allocated 833 kHz for broadcast use; added 750 kHz in 1922; by 1933 the band included frequencies from 550 kHz to 1350 kHz

“I think this is probably the only industry of the United States that is unanimously in favor of having itself regulated.” – Hoover in 1924 at the Third National Radio Conference

1. Declared the airwaves belong to the people – not to the stations using them

At odds with the “unalienable rights” declaration

2. broadcasting must serve the “public convenience, interest, or necessity” (PICON doctrine)

3. U.S. government controlled all channels; gave out their use via licenses

4. Obligated licensees to treat rival political candidates equally

5. Banned monopolizing and censorship

(established in 1934) – grants licenses to radio and TV stations based on the applicant’s proposals for serving “the public interest, convenience, or necessity;” Broadcasters are prohibited from advertising/promoting lotteries except in states where lotteries are legal.

--Administers federal broadcasting and communications laws

“Equal time rule” (Section 315 of Communications Act of 1934) requires radio/TV/cable systems that originate their own programming to give equal broadcast time for all political candidate commercials

In Miami Herald v. Tornillo (1974), the SC ruled that there is no constitutional right of access to the press, not even in “one-newspaper towns”

An entity may own multiple broadcast networks, but not  two or more of the top 4 (that is ABC, CBS, FOX, NBC)

An entity may not own more TV stations than collectively reach more than 39% of national TV households

An entity may own two TV stations in the same market if

 -Their signals do not overlap; or

 -At least one of the stations is not ranked among the top four in audience share and at least 8 stations remain in the market

The 1996 Act ended national ownership limits for radio

-For local radio stations, a single entity may own up to 5 commercial radio stations in a market with up to 14 stations

Newspaper-broadcast cross-ownership is mostly disallowed

TV-radio cross-ownership is mostly disallowed

Protected under the First Amendment but not permitted in broadcast

“Language or material that depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory activities or organs” (1987)

By “contemporary community standards,” the FCC means the standard “of an average broadcast viewer or listener and not the sensibilities of any individual complainant.”

Not to be confused with Miller test definition of “obscenity”

Permitted during “safe harbor” hours between 10 p.m. and 6 a.m. (since 1995)

Mandated by 1996 Act for new television receivers

Self-regulation via age ratings (TV-Y, TV-Y7, TV-G, TV-PG, TV-14, TV-MA) and content ratings (FV, V, S, L, D)

The first commercial cable TV systems started in the late 1940s and early 1950s, with small companies retransmitting broadcast to isolated communities via coaxial cable.

From early 1960s to early ‘80s, cable evolved from unregulated to regulated and back to generally unregulated

 The Cable Act of 1992 gave cable system operators the authority to decide whether to carry indecency

The Act required that cable systems “must carry” all local television stations, which the Supreme Court upheld in Turner Broadcasting System v. FCC (1997)

Low entry barriers, lack of gatekeepers, not easily controlled, not bound by physical limitations

Many legal issues are common with traditional media

In other issues, case law is quickly forming

 Education and income are significant variables in determining Internet access and usage

Knowledge gap hypothesis posits that those “with higher socioeconomic status tend to acquire information at a faster rate than the lower status segments so that the gap in knowledge between these segments tends to increase rather than decrease” (Tichenor, et al., 1970)

 Mayflower Doctrine of 1941 prohibited editorializing

 In 1949 the Mayflower Doctrine was discardedThe Fairness Doctrine replaced the Mayflower Doctrine

 The principle of fairness included a “right to reply” and a balanced presentation of views

 Not to be confused with the “equal-time rule” (Section 315 of Communications Act of 1934) for political candidates

 The Fairness Doctrine was upheld by the SC in Red Lion Broadcasting Co. v. FCC (1969)

Generally the broadcast industry disliked the fairness doctrine, claiming that it inhibited rather than promoted presentation of controversial views

In 1985 the FCC issued a report critical of the doctrine

Since 1987 the FCC is not enforcing the Fairness Doctrine except for its personal attack portions

Rush Limbaugh and other conservative talk radio flourished

 In Miami Herald v. Tornillo (1974), the SC ruled that there is no constitutional right of access to the press, not even in “one-newspaper towns”

“The test of obscenity is this, whether the tendency of the matter charged as obscenity is to deprave and corrupt those whose minds are open to such immoral influences, and into whose hands a publication of this sort may fall.”

Announced in the case of Regina v. Hicklin (1868).  The case involved criticism of the Catholic religion

This landmark decision determined for the first time that the 1873 Comstock Act’s obscenity provisions were constitutional.  The SC defined obscenity as a form of express that is both:

1. worthless (“utterly without redeeming social importance”); and

2. sexually lewd, meaning (a) “whether to the average person” (b) “applying contemporary community standards (c) “the dominant theme of the material taken as a whole” (d) “appeals to prurient interest.”

 Whether the average person, applying contemporary standards of the state or local community, would find that the work, taken as a whole, appeals to the prurient interest

1. Whether the average person, applying contemporary standards of the state or local community, would find that the work, taken as a whole, appeals to the prurient interest;

2. Whether the work depicts or describes in a patently offensive way sexual conduct specifically defined by the applicable state law;

3. Whether the work lacks serious literary, artistic, political, or scientific value (sometimes called the “SLAPS test”)

 The First Amendment protects pornography that is not obscene speech or child pornography

Use of children in non-obscene sexual performances is prohibited (New York v. Ferber, 1982)

It is a crime to “possess or view any material or performance that shows a minor who is not the person’s child or ward in a state of nudity” (Osborne v. Ohio, 1990)

It is illegal for government agencies to “entrap” (inducing a subject to commit a crime not contemplated by him for the purpose of prosecuting after he committed the illegal act)

The U.S. Copyright Office defines copyright as a “form of protection provided by the laws of the United States to the authors of ‘original works of authorship,’ including literary, dramatic, musical, artistic, and certain other intellectual works.”

Copyright protection exists automatically, even without registration with the U.S

Property ownership as a “natural right” (John Locke)

“The Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Copyright protection exists automatically, even without registration with the U.S. Copyright Office

A registration is required to file a copyright infringement lawsuit

A registration entitles the copyright holder to collect statutory damages and attorney’s fees, not just actual damages and profits

In 1710, the Statute of Anne, England’s first parliamentary copyright law, went into effect.  Heated argument raged.

Copyright was established in England by Queen Mary I, daughter of Henry VIII, in 1557.  This was done by royal decree, not by act of Parliament.

It was issued in the form of a “perpetual lease” to the private Stationers’ Company, the London-based guild of printers, bookbinders and booksellers.  (Note: the first grant of copyright was to printers/booksellers, NOT to authors)

In 1710, the Statute of Anne, England’s first parliamentary copyright law, went into effect.  Heated argument raged.

In 1831, Congress amended the federal copyright law to add music to the list of protected materials, and increased the initial term of protection from 14 to 28 years (while leaving the length of the second term at 14 years).

Important amendments to US copyright law

(1909,1976,1980,1998)

1909- With legal precedent firmly in place following Wheaton v. Peters, the federal copyright statute has been substantially revised three times – in 1870, in 1909, and in 1976.

1976- Evolution of U.S. copyright law. Jan. 1, 1978:  The Copyright Act of 1976 takes effect; copyright is given to the owner for a period of 50 years after the author’s death

1980- Dec. 12, 1980: C-law amended for computer programs

1998- Oct. 27, 1998: The Sonny Bono Copyright Term Extension Act extends c-protection for most works to author’s life plus 70 yrs

Oct. 28, 1998: The Digital Millennium Copyright Act provides guidelines in line with the WIPO and establishes guidelines for the use of digital materials.

The Sonny Bono Copyright Term Extension Act (CTEA), signed by Clinton in 1998, extended the length of copyright protection to the life of the author plus 70 years, or 20 years beyond that provided under the 1976 Copyright Act.   CTEA also extends the copyright on works created before the 1976 Act to 95 years.

1. Works that have not been fixed in a tangible form – E.g. choreographic works that have not been notated or recorded, improvisational speeches or performances that have not been written or recorded

2. Titles, names, short phrases, and slogans; familiar designs or symbols; mere variations of typographic ornamentation, lettering or coloring

3. Ideas, procedures, methods, systems, processes, concepts, discoveries.

4. Works consisting entirely of information that is common property – E.g. standard calendars, tape measures, height/weight charts.

The Copyright Act of 1976 gives the copyright owner exclusive rights “to do and authorize” the following:

1. reproduction of protected work in copies or phonorecords

2. preparation of derivative works based on the c/righted work

3. distribution of copies of the work to the public for sale or rental or lease or lending

4. public performance of copyrighted works such as plays, musicals, motion pictures

5. public display of copyrighted works such as paintings, sculptures, images from motion pictures, dramatic productions and other A/V work.

Patent protects one’s IP as applied to a device or machine, such as a shaving instrument or new farm tool.

Trademark is a word, name or symbol used by a company as a special means of product or company identification. E.g. Coca-Cola, Nike, etc.

Copyright protection exists automatically, even without official registration with the U.S. Copyright Office for both published and unpublished “original works of authorship” when they are created (that is, when they are become fixed in a tangible form of expression). E.g. literature, drama, music, pantomines, choreography, photographs, graphics, sculptures, speeches, personal letters, emails, computer programs, maps, blueprints, motion pictures.

The 1976 Copyright Act includes the principles of fair use:

1. The purpose and character of the use (commercial or nonprofit)

2. The nature of the copyrighted work

3. The amount and substantaility of the portion used in relation to the copyrighted work as a whole

4. The effect of the use upon the potential market for or value of the copyrighted work.

The copyright law allows a parody to copy some of the original work so that “a parodic character may reasonably be perceived.”

Campbell v. Acuff-Rose Music, Inc. (1994)

Also, the SC, in Hustler v. Falwell, gave strong protection to the communication of ideas via parody.  So the parodic form of expression has a high degree of protection in the United States.

An author initially owns all rights to his/her work unless the work is done “for hire.”

“Made for hire” means: 1. it is prepared by an employee within the scope of his job; 2. by written agreement between author and publisher.

Piracy is infringement for commercial benefit, typically on a large scale

Why file-sharing may not be piracy:

1. Like the original Hollywood, p2p sharing escapes an overly controlling industry;

2. Like the original recording industry, it simply exploits a new way to distribute content; but

3. Unlike cable TV, no one is selling the content that is shared on p2p servers