FCC Releases Decision on Broadcaster’s Obligations to Identify Foreign Government Sponsored Programming – There is Some Good News, and Some Bad News Affecting Issue Ads

Last week, the FCC released its long-expected decision on foreign government sponsored programming.  As you will recall, in 2022, the FCC adopted rules that required enhanced sponsorship identifications when program time bought (or, in the FCC’s words, “leased”) on broadcast stations was sponsored by a foreign government or an agent of a foreign government.  In addition, it required broadcasters to verify whether program buyers were agents of foreign governments, both by getting certifications from program buyers as to whether they represented foreign governments and by checking a Department of Justice database (compiled under the Foreign Agents Registration Act) to see if the buyer was registered as a foreign agent (see our articles here and here).  When a court threw out the requirement that broadcasters check those databases (see our article here), the FCC responded with a Second Notice of Proposed Rulemaking proposing that, instead of the FARA research, broadcasters needed to obtain a 13-paragraph certification as to whether any program buyer was a foreign government entity, and to include in the public file all such certifications, regardless of the response (as opposed to the existing requirement only obligating the broadcaster to put certifications in the public file when they indicated that the buyer was in fact an agent of a foreign government) (see our articles here and here on that proposal).  In the order released last week, the FCC decided not to require that enhanced certification (or the requirement to put negative responses into the public file), but instead came up with an unexpected addition to the requirement – that certifications must be obtained not just from buyers of program time, but also from buyers of advertising spot time, if the advertisers are not promoting commercial products and services. 

The order simplifies the certification requirement from the detailed multi-page certification in complex legalese that had been proposed in the Second Notice.  Instead, the FCC offers a relatively short certification (contained in Appendix D of the order) for program buyers to sign, with two basic questions – whether any foreign government entity ( a foreign government, a foreign political party, or an agent of one of those groups) is the purchaser of the programming; and whether the purchaser or any producer of the programming is being paid by a foreign government entity.  In the vast majority of cases, we expect that the answer to both questions will be “no.”  In the event that a programmer or program producer is an agent of a foreign government, then an additional question applies, requiring that the programmer provide the licensee appropriate sponsorship identification information for the enhanced on-air sponsorship identifications and for the required public file disclosure obligations.  Even using this FCC form questionnaire is not necessary, if the licensee can obtain that information using different words.  So, in at least some instances, broadcasters may be able to continue to use their existing certification language. Consult your attorney to see if the language you are using will comply with what the FCC will require when this order becomes effective. 

The FCC also decided that it will allow broadcasters to forego the certification entirely – if the program buyer provides the broadcaster a printout of a search of the Department of Justice’s FARA database showing that the sponsor’s name is not in that database.  This substitutes for the requirement that broadcasters do the search that was rejected by the Court.  As the FARA database is not totally user-friendly (or routinely used by churches, real estate brokers, and ethnic programmers who so often buy program time), we would not expect this option to be often used.

Thus, the certification obligation is minimally changed – the 13-paragraph certification proposal having been abandoned.  One might think that the decision was not a bad one for broadcasters.  However, in the notice that initiated this rulemaking proceeding, the FCC was asked to provide further clarity about what constitutes a normal commercial announcement, the purchase of which would not trigger the certification requirements that only apply to “leased
 programming time.  Some broadcasters had suggested that anything 2 minutes or less should be considered to be simply an advertisement and exempted from the certification requirements.  The resolution of that issue had been expected – and it did come, but in a surprising way.

The Commission chose not to clarify that a spot of 2 minutes or less was not the purchase of program time covered by the certification requirement, leaving it to vague industry standards to decide what was spot advertising time as opposed to leased program time.  Instead, the Commission went off on a tangent not highlighted in the Second Notice, deciding that the spot time exception only covered spots that were for commercial products and services.  Spots that are not for commercial products, including issue ads and paid PSAs, will need to go through the same process as buys of program time – requiring the sponsor to provide a certification consistent with the Commission’s requirements adopted in the order, or a printout of the FARA database, to demonstrate that the buyer is not a foreign government or its agent.  Candidate advertising, however, was exempted, as the majority of the Commission determined that other agency rules (including those of the FEC) ensure that no foreign government will be buying time.  But the decision did not exempt other ads that are not for commercial products.  I’ve already been asked at broadcaster conferences if the FCC really expects stations to ask the state tourist agency or local health departments to provide certifications about advertising that they buy – as they are not advertising commercial products or services.  It would seem to be unnecessary, but the rules do not address this issue. 

This decision brought dissents from both Republican commissioners arguing that the Commission cannot adopt a requirement that applies to ads like these without first giving notice that it was intending to do so and asking for public comment – and contending that the notice in this proceeding did not hint at this outcome.  Given these arguments and ambiguities, it is quite possible that this decision to apply the certification requirements to issue ads, and other ads that don’t address commercial products, will be appealed.  But, unless a court rapidly issues a stay, this requirement may go into effect later this year even if an appeal is pending – thus adding one more certification that broadcasters will need to obtain from issue advertisers in the upcoming election advertising onslaught expect before the November election. 

As noted above, this decision is not yet effective – and will not be until it is published in the Federal Register.  But it has already brought much apprehension to stations about what they will need to do for ads that are not for commercial products – so start your planning now to be ready if this rule does indeed go into effect.