March 12, 2010

Clark Rector Jr., Executive Vice President – Government Affairs

• Supreme Court Commercial Speech Decision
• Senate Committee Schedules Second Hearing
• Turnover at the FTC
• Retransmission Rules Questioned
• AAF to Host Meet and Greet

Supreme Court Commercial Speech Decision

In a recently released unanimous decision, Milavetz, Gallop & Milavetz, P. A., et al. v. United States, the U.S. Supreme Court upheld provisions of the Bankruptcy Abuse and Consumer Protection Act of 2005 that requires "debt relief agencies" to make certain disclosures about their proposed services.

The provisions were examined under the Central Hudson commercial speech doctrine which says that any government regulation of truthful commercial speech must be narrowly tailored and directly advance a compelling government interest.

The Court reasoned that the "required disclosures are intended to combat the problem of inherently misleading commercial advertisements – specifically, the promise of debt relief without any reference to the possibility of filing for bankruptcy, which has inherent costs. Additionally, the disclosures entail only an accurate statement identifying the advertiser’s legal status and the character of the assistance provided, and they do not prevent debt relief agencies like Milavetz from conveying any additional information."

While the Court warned that "unjustified or unduly burdensome disclosure requirements offend the First Amendment by chilling protected speech," it concluded that in this instance, "an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers."

To read the decision in full, click here
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Senate Committee Schedules Second Hearing

The Senate Subcommittee on Consumer Protection, Product Safety, and Insurance of the Committee on Commerce Science and Transportation has scheduled a March 17 hearing, “Financial Services and Products: The Role of the Federal Trade Commission in Protecting Consumers, Part 2.” The first hearing was conducted on February 4 and featured FTC Chairman Jon Leibowitz as the sole witness.

At the first hearing Chairman Leibowitz argued in favor of doing away with the “Magnuson-Moss” rulemaking provisions under which the agency currently operates. The Magnuson-Moss provisions include requiring that before enacting industry-wide rules, the agency must show a practice is prevalent, receive input from businesses and other interested parties, and notify Congress. Many observers were concerned that Chairman Leibowitz did not adequately explain why the provisions should be eliminated.

AAF believes that the Magnuson-Moss provisions provide an important safeguard for both consumers and businesses.
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Turnover at the FTC

Federal Trade Commissioner Pamela Jones Harbour has announced her resignation from the agency effective April 6. She is leaving after serving for six and one-half years. Commissioner Jones’ announcement comes soon after the Senate confirmation of two new commissioners, Julie Brill and Edith Ramirez.
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Retransmission Rules Questioned

A group of cable and satellite television companies have asked the Federal Communications Commission and Congress to fix what they believe is a flawed process for broadcast television retransmission. Under the 1992 Cable Act, a broadcaster is guaranteed carriage of its primary signal or the right to negotiate carriage through retransmission consent. Cable companies complain that many broadcasters make unreasonable requests for financial compensation or insist that less popular sister stations also be carried. Broadcasters counter that cable and satellite companies benefit from carrying stations and that the “modest” fees help to fund local news and community service.
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AAF to Host Meet and Greet

AAF will host Representative John Barrow, D-Ga., for a Meet and Greet on Tuesday, March 23. Representative Barrow is a member of the House Energy and Commerce Committee, where he sits on the Commerce, Trade, and Consumer Protection, Energy and Environment, and Heath subcommittees. AAF Meet and Greets are an opportunity for important members of Congress and advertising industry representatives to get to know each other in an informal setting. If you have an interest it attending the event or being put on the invitation list, please contact Clark Rector at crector@aaf.org.
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Go to the Government Affairs Main Page.