WASHINGTON — Local television stations may have reaped as much as $1 billion last year by "gouging" political advertisers, according to a new report that concludes that broadcasters are increasing the price of political advertising for their own profit while campaign costs spiral out of control
But broadcasters flatly reject this assertion. They say costs escalated last year chiefly because of the huge increase in third-party issue advertisements and because media buyers for candidates were paid a percentage of the cost of air time for their commercials and had no incentive to negotiate for lower prices.
The report, "Gouging Democracy," was prepared by the Alliance for Better Campaigns, a not-for-profit Washington group that is trying to prod television stations to give political candidates free air time. The group, headed by Paul Taylor, a former reporter for The Washington Post, is guided by the premise that television is obligated to promote political discourse because the government has given the industry, free of charge, an estimated $70 billion worth of public airwaves to help it move into the digital age.
The report concludes that 484 stations in the top 75 media markets took in at least $771 million from Jan. 1 to Nov. 7, 2000, from the sale of air time for more than 1.2 million political commercials. This was a 76 percent increase over what these stations received in 1996. The report notes that the figure does not reflect the total advertising dollars that candidates and advocacy groups spent on about 800 other stations in the nation's 135 smaller markets. Including that amount, the report said, the total for political advertising dollars in 2000 was closer to $1 billion.
In any case, the $771 million is about five times what political advertisers spent on television commercials in 1980, even adjusting for inflation. The report attributes the increase to several factors, including the huge jump in advertising by outside issue-advocacy groups.
But the report also blamed television stations for urging candidates not to buy airtime at basic rates, which do not guarantee a time slot, and directing them toward more expensive rates, which do guarantee a specific time. The basic rate is based on the price stations charge their most favored commercial advertisers. The concept was part of a 1971 law designed to protect candidates from price gouging by broadcasters.
But the law allows stations to offer the cheaper time with the caveat that a candidate paying that rate could be pre-empted by another candidate willing to pay more. The report argues that many candidates will pay more for a guaranteed time.
The report concludes that near the end of the fall's campaign, federal, state and local candidates paid rates that were 65 percent above the lowest unit charge that stations promoted on their rate cards.
Dennis Wharton, a spokesman for the National Association of Broadcasters, said that "We completely disagree with the claim that the stations are steering candidates toward higher rates."
Leland Westerfield, a television industry analyst for UBS Warburg Research in New York, said that he too estimated that political advertising hit the $1 billion mark in 2000. But he attributed the increase to the competitive nature of many races.
Copyright 2001 The New York Times Company