Viacom, Disney Settle With FCC

Viacom Inc. and The Walt Disney Co. agreed Thursday to pay a total of $1.5 million to settle government charges the companies violated advertising limits for children's television programming.

The combined settlement with the Federal Communications Commission is the largest negotiated with the agency for such violations.

Viacom will pay $1 million as a result of ad programming that aired on Nickelodeon, a Viacom subsidiary. International Family Entertainment, which is owned by Disney, will pay $500,000 because of commercials that aired over its ABC Family Channel.

FCC rules limit the commercials that can be aired in certain children's TV shows to 10½ minutes per hour on weekends and 12 minutes per hour during weekdays. The time limits apply to over-the-air broadcasters and cable operators for programming originally produced and aired for an audience of 12 years and younger.

The rules also bar broadcasters from airing commercials that refer to or offer products that are related to the children's program. For example, a cartoon program cannot air a commercial for the dolls of its characters during the program broadcast. In that case, the entire program would be considered a commercial and thus a violation of the federal rules.

Viacom conducted its own investigation of programming in 2003 and determined that it inadvertently broke the minutes-per-hour limits about 600 times and the product placement regulation about 145 times.

International Family Entertainment also conducted an internal audit and concluded that during a one-year period of time, there were 31 half-hour episodes in which commercials for products associated with children's programs were mistakenly aired on the ABC Family Channel.

ABC Family blamed computer problems.

"We had previously been using a computer traffic system that did not read for notations regarding special children's advertising restrictions and commercials were unintentionally placed in related programs," said spokeswoman Nicole Nichols. She said the problem has been fixed.

Nickelodeon cited human error and computer system troubles with its commercial logging systems. Spokesman Dan Martinsen said the company has "initiated new procedures to help ensure this will not happen again."

CBSNews.com is a subsidiary of Viacom Inc.

By Jennifer C. Kerr