The 2017 deregulatory changes to the FCC’s ownership rules have been on hold since December 2019, when the decision of the US Court of Appeals for the Third Circuit, overturning those rule changes, became effective (see our post here).  The court’s decision has put any broadcast ownership changes on hold (including potential changes in the radio ownership rules which were not part of the 2017 FCC decision) while the FCC contemplated how to deal with the fallout from the Third Circuit’s decision.  The potential for another way forward arose last week when the Supreme Court decided to hear the appeal of the Third Circuit decision – granting a petition for “cert” (a petition asking the Court to hear the appeal) – the announcement of that grant coming out on Friday.

As we wrote here, the Third Circuit rejected the FCC’s 2017 ownership rule changes, finding that the FCC had done an inadequate job of assessing how prior ownership relaxations had affected the ability of minorities and other potential new entrants to break into the ranks of broadcast ownership.  Despite arguments from the FCC that it had already analyzed the impact of changes on new entrants and taken steps to mitigate any adverse impact, the Court seemed to be directing the FCC to do a more searching analysis of the historical impact of the relaxation of ownership restrictions on new entrants.  Because this analysis would affect any ownership rule change, including those proposed for radio (see our article here), the decision effectively froze further FCC consideration of all broadcast ownership rule changes.

The 2017 changes that were undone in December included the abolition of the newspaper-broadcast and the radio-television cross-ownership rules, as well as the rule that prohibited the acquisition of a second television station in a market unless there would remain after the acquisition at least 8 independently owned and programmed stations in the market.  We detailed other changes made in the 2017 FCC ruling in our article here.

The acceptance of the case does not in and of itself have any substantive meaning, other than that the Court is at least interested in the arguments that the Third Circuit rejection of the FCC’s changes was wrongly decided.  The appealing parties (the FCC and industry groups) will file briefs in support of their arguments later this year, with the opposing parties filing a response.  Oral arguments will follow early next year.  A decision would likely come before the Court adjourns this year’s term in June or early July.

There are still a number of twists and turns that may come up.  Most notably, the November election could have an impact on the Commissioners at the FCC.  That could affect the willingness of the FCC to aggressively advocate for the 2017 decision (although the industry groups could still pursue the appeal before the Supreme Court).  But even a Court decision overturning the Third Circuit opinion could have its impact mitigated by a new FCC as there is a new Quadrennial Review of the ownership rules that is already open.  One would doubt that even a new FCC would reinstate the newspaper-broadcast cross-ownership rule, as there seems little argument that it retains any real basis in today’s world, but one never knows (as we have speculated before – for instance, here, here, and here – that policy seems to have a life of its own and may well outlive the daily newspaper itself).

So, FCC ownership reform is still on hold, but there appears to be some prospect that over the next nine months, things could change.  Watch this case as it proceeds before the Supreme Court.

Courtesy Broadcast Law Blog

Here are some of the regulatory developments and legal actions of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

• The U.S. Supreme Court decided to consider the appeals by the FCC and industry groups of the Third Circuit’s decision overturning the FCC’s 2017 ownership order. The FCC’s 2017 decision, among other things, abolished the newspaper-broadcast and radio-TV cross-ownership bans and allowed common ownership of two TV stations in the same market even when there were not 8 independent operators and, in some cases, even allowed combinations of two of the top 4 rated TV stations in a market.  For years, the Third Circuit has blocked the FCC’s attempts to reform its ownership rules.  In the cases which the Supreme Court will now review, the Prometheus Radio Project cases, the Third Circuit said that the Commission’s analysis of the media marketplace lacked evidence of the impact that changes in the rules have had and will have on the diversity of new entrants into media ownership.  Briefs are likely to be submitted to the Supreme Court this fall with oral arguments to follow early in the new year.  A decision is expected before the end of this term of the Supreme Court at the end of June or beginning of July of 2021.  Get caught up with the issue in these cases, here.  (Supreme Court Order List)
• The FCC relaxed its rules regarding the notifications cable companies must provide to their subscribers about retransmission consent blackouts. The change from 30-day advance notice of a blackout to “as soon as possible” notification is an acknowledgement that retransmission negotiations sometimes continue until the hours before the deadline and that 30-day notice is, in many cases, not a reliable indicator that a blackout will occur.  (Report and Order)
• The FCC released an order that will bring more structure to the Team Telecom process which reviews proposals for foreign ownership in the telecommunications industry. Any broadcast deal that would lead to more than 25% foreign ownership is subject to Team Telecom review. Team Telecom brings together telecommunications and national security officials from throughout the government to examine these transactions.  The changes are designed to give applicants more transparency into the process and make reviews more predictable.  The FCC also hopes to reduce the amount of time it takes for an application to make it through the review process.  (News Release)  (Report and Order)
• FCC Commissioner Michael O’Rielly published a blog post detailing what he thinks should be included in the next slate of media modernization items the Commission considers. O’Rielly suggests lifting the freeze on technical upgrades and modifications that was put in place to conserve staff resources devoted to the incentive auction and repack, updating the criteria by which stations are considered to be failing for ownership waiver purposes, allowing waivers for LPFM stations to make in-market moves, updating the rules for VHF channels to move to the UHF band, and updating the rules to make easier certain changes to communities of license of TV stations.  As Commissioner O’Rielly is expected to leave the Commission at year’s end (or sooner if his replacement is confirmed), his time to work on these issues from within the Commission is limited, so his blog post can be seen as a roadmap of media modernization items for the next group of Commissioners to consider.  (Blog Post)
• We published in our Blog our monthly look at the regulatory dates and deadlines for October. Next up is October 10, which is important for all licensees of full-power stations as it is the deadline for stations to post to their online public files their Quarterly Issues/Programs Lists detailing the issues facing their communities and the programming that they broadcast to address those issues during July, August, and September.  (Broadcast Law Blog)

Courtesy Broadcast Law Blog

Back in August, we highlighted some of the many issues in computing lowest unit charges (or “lowest unit rates”) for political candidates which are in effect during the window for the November elections that went into effect on September 4.  In this last month before the election, as political advertising ramps up and each party fights over those few undecided viewers, we wanted to bring to your attention a video that I did for the Indiana Broadcasters Association discussing the various issues that arise in determining lowest unit rates.  That video summarizes many of the issues that we wrote about back in August and is available here:

At the end of this article, we provide links to other videos produced by the Indiana Broadcasters discussing other political broadcasting issues, and to other articles that we have written on other political broadcasting issues.

As we wrote back in August, lowest unit charges (or “Lowest Unit Rates”) guarantee that, in the 45 days before a primary and the 60 days before a general election, legally qualified candidates get the lowest rate for a spot that is then running on the station within any class of advertising time running in any particular daypart. Candidates also get the benefit of all volume discounts without having to buy in volume – i.e., the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class. But there are many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.

It is a common misperception that a station has one lowest unit rate, when in fact almost every station will have several – if not dozens – of lowest unit rates,with one lowest unit rate for each class of time in each daypart. Even at the smallest radio station, there are probably several different classes of advertising spots. For instance, there will be different rates for spots running in morning drive than for those spots that run in the middle of the night. Each time period for which the station charges a differing rate is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, each rotation that offers substantially different benefits to an advertiser will be its own class of time with its own lowest unit rates (e.g., a 6 AM to Noon rotation is a different class than a 6 AM to 6 PM rotation, and both are a different class from a 24-hour rotator – and each can have its own lowest unit rate). So, in the same time period (e.g., morning drive on a radio station), there may be spots running in that period that have multiple lowest unit rates (such as spots sold specifically for morning drive, as well as cheaper spots that were sold as part of a 6 AM to 6 PM rotation that just happened to fall within the morning drive period).  Federal candidates can buy into any of those classes of time, and they take the same chances as does a commercial advertiser as to where their spots will land (e.g., if a candidate buys a 6 AM to 6 PM rotator, and that rotator ends up in morning drive, another candidate may buy that same rotator the next week and end up at 4 PM. That second candidate can only guarantee that they will end up in morning drive by buying a spot guaranteed in that time period).

Even in the same time period, there can be preemptible and non-preemptible time, each with different costs, thus making them different classes of time, each with its own lowest unit rate. Any class of spots that run in a unique time period, with a unique rotation or unique rights attached to it (e.g., different levels of preemptibility, different make-good rights, etc.) will have a different lowest unit rate. Stations need to review each class of time sold on their station, find the lowest rate charged to a commercial advertiser for a spot of the same class that is running at the same time that the candidate wants to buy a spot, and make sure that lowest rate will be what the candidate is charged.

One question that still comes up with surprising regularity is whether these rates apply to state and local candidates, as well as federal candidates. Indeed they do – so if your station is running advertising for candidates for mayor or city council, or for governor or the state senate, or even for the board of education, municipal court judge, or state attorney general – they and any other candidate in any public election for which your station chooses to accept advertising gets lowest unit rates. See our past articles on this topic here and here.  Stations are not required to sell advertising time to state and local candidates, but if they do, lowest unit rates apply.

In modern political elections, where PACs, Super PACs and other non-candidate interest groups are buying a significant amount of political advertising time, broadcasters need to remember that these spots don’t require lowest unit rates. Even if the picture or recognizable voice of the candidate that the PAC is supporting appears in the ad, spots that are sponsored by an independent organization not authorized by the candidate do not get lowest unit rates (note, however, that spots purchased by independent groups featuring the voice or picture of the candidate may trigger public file and equal opportunities obligations for the station if the station decides to run those spots).  Under federal law, stations can charge these advertisers anything that the station wants for non-candidate ads – no need to stick to lowest unit rates.

From time to time stations may face the one exception to the above paragraph, where political buyers are requesting lowest unit charges and are authorized by a candidate. In these cases, these parties may in fact be entitled to these rates – but only where the spot includes the recognizable voice or picture of the candidate and the message is specifically authorized by the candidate.  Under federal law for federal candidates, these purchases will be by political parties and subject to political campaign donation limitations (known as “hard money”).  To get lowest unit rates, the advertising purchases must be authorized and “coordinated” with a candidate and, in federal races, the spots should make that coordination clear with the “I approved this message” tag.  While the FCC has not formally ruled on it, it appears that some states have similar state laws that allow third parties to buy spots that are authorized by a candidate and may be entitled to lowest unit rates. Talk to your own attorney if you are faced with that issue. Not all third-party spots are entitled to this treatment – only this special class of coordinated expenditures – and stations are entitled to get written confirmation from the candidate that the expenditures are coordinated under applicable election laws. If not coordinated, the parties get charged the same as any other third-party organization.

Various advertising sales packages, and how they are factored into lowest unit rate calculations, also seem to lead to many questions by broadcasters. Candidates cannot be forced to buy single-station packages to get lowest unit rates. Instead, the package must be broken down by the station into a price per spot for each class of spot that is contained in the package. That is done by allocating the package price to the various spots of each class that are contained in the package. Then the allocated rates, on a unit basis, are compared to other spots of the same class that have been sold on the station either on their own or in other packages to determine if the spots from this package have any impact on the station’s lowest unit rates. This allocation is done in an internal station record, which does not need to go into the public file and does not need to be revealed to the candidate. Other than the station, only the FCC will see this allocation if they decide to conduct some sort of audit. We wrote more about this process of allocating spots in a package here.

These are just some of the myriad issues that arise in computing lowest unit rates. Stations need to be familiar with these rules and apply them accurately through the lowest unit rate windows. Check with your own legal advisor to discuss the specifics of these issues as they arise as they are often very difficult to apply in the real world.  Some of the other situations that arise with lowest unit rates, and with other political issues that come up in any election season, are covered in our Political Broadcasting Guide, available here.

There are obviously many other issues that come up in the political broadcasting process.  The Indiana Broadcasters have produced several other videos in which I explain some of the basics of the political broadcasting rules.  These include:

Other articles that deal with other political broadcasting subjects can be found on our blog by clicking on these links:  equal opportunities, reasonable access, the no-censorship provision that governs candidate ads, and the potential for station liability for untruthful statements made in third party ads.  Also, see our article here about the obligations for the political file required as part of the online public file, and the importance that the FCC puts on that file.  And our articles here, here, here and here on the new requirements for the identification in the public file of all the issues mentioned in any advertising on federal political issues or candidates.  All of these materials are just a summary of the basics in each of these areas.  The laws regarding political broadcasting are extremely complicated and legal conclusions are very fact-dependent so you need to talk to your own attorney for specific advice on situations that arise at your station.

Courtesy Broadcast Law Blog

In many parts of the country, the air is turning crisp, the leaves are changing color, and kids are back in school (in some form), making it the perfect time to get caught up with regulatory dates and deadlines coming in October.  This is an unusual month where there are several routine regulatory deadlines – renewals, EEO filings, Quarterly Issues Programs Lists, and the must-carry/retransmission consent deadline, but no significant broadcast rulemaking comment deadlines, perhaps as we are nearing the end of the current administration which might not be around to finish any proceeding started now.

The routine deadlines include those for radio stations in Iowa and Missouri and TV stations in Florida, Puerto Rico, and the U.S. Virgin Islands who should be putting the finishing touches on their license renewal applications, to be filed on or before October 1, along with the accompanying EEO program report.  Stations should also have their post-filing announcements ready and scheduled to begin airing on October 1.  Those announcements continue through December 16.  Stations are no longer required to air pre-filing announcements.  The schedule for post-filing announcements and sample announcement language is here for radio stations and here for TV stations.

Also due by October 1 are EEO public inspection file reports for stations in Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, and the U.S. Virgin Islands that are part of a station employment unit with 5 of more full-time employees.  An employment unit is one or more commonly controlled stations in the same geographic area that share at least one employee.  By October 1, these reports are to be uploaded to the station’s FCC-hosted online public file and a link to that report needs to be placed on the homepage of the station’s website (if the station has a website).  If your station employment unit has fewer than five full-time employees, no report needs to be placed in your public file or on your website.

By October 1, television stations must elect must-carry or retransmission consent for multichannel video programming distributors (MVPD) that carry their signals.  Full-power and Class A TV stations must place in their online public inspection file by October 1 notice of whether they elect retransmission consent or must-carry carriage from their area’s MVPDs for the three-year cycle beginning on January 1, 2021 and ending December 31, 2023.  If the station has decided to change its election, it must notify the MVPD by email, to an address set out in the MVPD’s public file.  We summarized this new rule, here.

On or before October 10, all TV and radio stations must upload to their public file their Quarterly Issues/Programs Lists for the 3^rd quarter (July, August, and September).  The Quarterly Issues/Programs Lists are a station’s evidence of how it operated in the public interest, demonstrating its treatment of its community’s most significant issues.  As we have written previously, the FCC takes this requirement seriously and will fine stations, hold up granting license renewals, or both if it finds problems with a station’s compliance.  For a short video on complying with the Quarterly Issues/Programs List requirement, see here.

In advance of the FCC’s October 27 Open Meeting, we will be tracking any broadcast items that make it on the agenda.  Stay tuned to the blog throughout October for updates.

Looking ahead to early November, we note the closing of the general election lowest unit charge (LUC) window on November 3.  There has been a lot of media reporting suggesting that certain races—the presidential race being the highest profile—may not be decided by the 3^rd or even the early hours of the 4^th.  This situation could lead to campaigns continuing to advertise past November 3 to, for example, try to persuade state election officials to certify results, but there is no mechanism in federal law or the FCC’s rules to extend the LUC window past election day.  The only exception would be in those races that may have runoff elections occurring after November 3, which are considered new elections so that they would have their own 60-day LUC window.

These are just a few of the regulatory dates we are tracking for October and early November.  As always, read the blog and keep in close touch with your station’s counsel to be sure you are staying on top of the dates and deadlines that apply to your operation.

Courtesy Broadcast Law Blog

Here are some of the regulatory and legal actions and developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

• The day before 2020 annual regulatory fees were due, the FCC extended the deadline from 11:59 p.m. on Friday, September 25 to 11:59 p.m. on Monday, September, 28. (Public Notice)
• Broadcast trade publication TVNewsCheck published “A Broadcaster’s Guide to Washington Issues,” our periodic survey of the legal and regulatory issues facing television   It is a good resource for both new and veteran broadcasters looking to understand the status of pending legal and regulatory issues for the television industry.
• For stations looking to stay on top of their KidVid reporting, the updated form to be used for the 2020 Children’s Television Programming Report is now available and can be accessed through the FCC’s Licensing and Management System (LMS). Stations can begin to prepare the form, update it during the remainder of the year, saving the information to be ready to file in January.  The FCC reminds television broadcasters that the form cannot be finalized and submitted until January 1, 2021.  As a reminder, KidVid reports are now filed annually, not quarterly as they were until the rules were changed in 2019.  (Public Notice)
• The FCC’s Media Bureau has waived the requirement for noncommercial educational (NCE) translator stations to send their carriage election notifications by email to multichannel video programming distributors (MVPD), as required under the FCC’s new carriage election requirements.  The waiver came out of a petition from PBS and the trade association America’s Public Television Stations who said that, in many cases, NCE translators do not even know which MVPDs are carrying them and have no easy way to determine this information, making notification time-consuming and costly with no practical benefit as NCE translators can only “elect” must-carry. (Memorandum Opinion and Order)

Courtesy Broadcast Law Blog

What are a noncommercial broadcaster’s obligations with respect to the political file and the rest of the FCC’s political broadcasting rules?  That is a question that I have heard asked several times in the last few weeks as we approach this most important, and contentious, election.  In short, I think that the answer to this question is that, in most cases, a noncommercial broadcaster will have few if any political file obligations.  Why?

Broadcast stations that are licensed as noncommercial do not have any reasonable access requirements.  What that means is that noncommercial stations do not have any obligation to sell time to political candidates or to make any free time available to the candidates for their messages.  Years ago, reasonable access did apply to noncommercial stations, but when a DC-area congressional candidate used the statutory reasonable access requirements to force a local NPR affiliate (to which many on Capitol Hill listened) to air political commercials, Congress acted to abolish the reasonable access requirement as it applied to noncommercial stations.  So, as noncommercial stations do not need to sell political time to candidates, they are not faced with the political file obligations which have triggered scrutiny from the FCC in recent months.  But that is not to say that there could never be a political file obligation for a noncommercial station.

Where an obligation could arise is when a candidate appears on a noncommercial station in a program that is not an “exempt program.” Exempt programs are programs that are not subject to the equal opportunities (or “equal time” as some call it) rule.  Broadcast stations must provide equal time to a candidate when an opposing candidate appears outside of an exempt program.  But that should rarely, if ever, occur on a noncommercial station.  Bona fide news and news interview programs are exempt programs and thus are exempt from equal time requirements – and the FCC has broadly construed those exemptions.  On-the-spot coverage of a news event is also exempt(see our articles here, here and here for more on these exemptions).  Candidate appearances on these exempt programs do not trigger equal opportunities, and they also do not require any political file entries.

Theoretically, the appearance of a candidate on a non-exempt program could trigger equal opportunities and require public file disclosures.  For a noncommercial station, it would seem like that is most likely to occur when an on-air station employee or volunteer decides to run for political office.  Just as with commercial stations, when an employee becomes a legally qualified candidate for office, every time they appear on the air (even if they are performing their regular on-air duties and not mentioning their campaign), their appearance is a “use” by a candidate subject to equal opportunities and political file obligations.  See our article here about employee-candidates and what can be done if a station’s employees decide to run for office.

Similarly, if a candidate appears in other programming on the station that is not “exempt,” then political file obligations could occur.  Watch for PSAs that feature local government officials who are running for re-election or for other offices, as these can give rise to public file and equal opportunities requirements (see our article here that expands on this warning).  A candidate appearance on some enhanced underwriting spot – even if the spot has nothing to do with their campaign – could also trigger the political rules (see our article here about how commercial stations should treat appearances by candidates in advertising for their businesses).  Or candidate appearances on some purely entertainment programs could trigger equal opportunities (e.g. when Ronald Reagan and Arnold Schwarzenegger ran for political office, their movies could not be shown on television without triggering equal time and public file obligations).

These situations are likely to be few – but be alert and make sure that your noncommercial station does not inadvertently trigger one of these situations where it needs to make entries in its political file about candidate appearances on the stations.

Courtesy Broadcast Law Blog

Where do all the Washington DC legal issues facing TV broadcasters stand? While we try on this Blog to write about many of those issues, we can’t always address everything that is happening. Every few months, my partner David O’Connor and I update a list of the legal and regulatory issues facing TV broadcasters. That list of issues is published by TVNewsCheck and the latest version, published today, is available on their website, here. It provides a summary of the status of legal and regulatory issues ranging from the adoption of the ATSC 3.0 standard at one end of the alphabet to White Spaces and Wireless Microphones on the other – with summaries of other issues including the many actions that the FCC took in response to the pandemic to the more traditional issues including Ownership Rule Changes, Children’s Television, Media Regulation Modernization, EEO Compliance, Political Advertising, Sponsorship Identification and dozens of other topics, many with links to more detailed discussions here on the Blog. The article is an easy place to go to see where, as of last week when we finished writing the article, legal matters related to TV broadcasting stand.  Of course, the status of these issues changes almost daily, so watch this Blog and other trade publications, and consult your own legal counsel, for the latest Washington news of interest to broadcasters.

Courtesy Broadcast Law Blog

With the October 1 deadline coming up for retransmission consent/must carry elections, and the likely commencement of many retransmission consent negotiations throughout the country, the FCC last week issued a decision that emphasizes the importance of “good faith” retransmission consent negotiations.  In this action, the full Commission denied an Application for Review that sought to reverse the Media Bureau’s ruling that eighteen stations had failed to negotiate in good faith with an MVPD for retransmission consent. The Commission’s decision also included a Notice of Apparent Liability announcing that each station faces a $512,228 penalty for these violations of the requirements for good faith negotiation.

In May, we wrote about the earlier stages of this case where another licensee agreed to a consent decree based on essentially the same allegations addressed in last week’s decision. The consent decree was based on violations described in a decision of the FCC’s Media Bureau released last November (here) finding that 18 television station licensees, operating stations in separate markets, had failed to negotiate retransmission consent in good faith.  Given the size of the proposed fines on the stations named in last week’s Notices of Apparent Liability, it is worth reviewing the basis of this decision.  Even though many of the details are redacted to protect proprietary information, the basis for the decision can still be gleaned from this series of decisions.

The Commission upheld the decision of the Media Bureau which found that all of the named companies had used a single negotiating agent who the Bureau found failed to comply with three of the Commission’s nine “per se” good faith negotiating standards set out in Section 76.65(b)(1) of the Commission’s rules.  Specifically, the Bureau found that the stations had not operated in good faith based on these perceived violations: (1) refusal to negotiate retransmission consent agreements; (2) refusal to meet and negotiate retransmission consent at reasonable times and locations, or acting in a manner that unreasonably delays retransmission consent negotiations; and (3) failure to respond to a retransmission consent proposal of the other party, including the reasons for the rejection of any such proposal.

In reaching this conclusion, the Bureau pointed to instances where the negotiating agent did not respond to offers for the carriage of single stations in the negotiating group, did not put forward proposals for the carriage of such stations and was slow in responding to proposals put forth by the MVPD and did not respond in detail to those proposals or make meaningful counterproposals.  The Bureau, at the time, ordered the stations to negotiate in good faith and reserved questions of liability, indicating that those could be taken up in the future.  That reservation of a decision on the question of liability is the basis for the Notices of Apparent Liability released last week.

Takeaways for TV stations?  While the FCC will not get into the substance of retransmission consent negotiations (for example, it will not question the economics proposed by either side – see this article from over a dozen years ago where the FCC made that clear), it does require that the parties seriously negotiate over the terms of such carriage.  Parties cannot simply say no and not advance proposals as to what they would accept to resolve the negotiations.  Parties cannot unilaterally cut off negotiations.  And the obligation is one that is unique to each station – so unrelated stations cannot join together and refuse to even consider deals offered for any particular station.  This decision shows that there are real teeth in these regulations – and substantial penalties may follow for violation of the Commission’s standards.

Courtesy Broadcast Law Blog

Here are some of the regulatory and legal actions and developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

• Political advertising will continue to blanket the airwaves for the next month and a half and broadcasters need to remain vigilant in complying with all political advertising rules and obligations. We wrote on the blog this week about some of the sponsorship identification issues broadcasters should look out for, especially as busy station staffers are dealing with more orders and more ad copy.  (Broadcast Law Blog)
• President Trump nominated Nathan Simington to fill FCC Commissioner Michael O’Rielly’s soon-to-be vacated seat. Simington currently serves as senior advisor at the National Telecommunications and Information Administration (NTIA) and is said to have worked on NTIA’s petition asking the FCC to review Section 230 of the Communications Decency Act of 1996, which gives online platforms broad immunity from what users post on those platforms.  O’Rielly’s re-nomination is believed to have been withdrawn over his public comments expressing legal concerns over the President Trump’s desire that the FCC take steps to limit this immunity.  O’Rielly can serve through the end of this year or until Simington is confirmed by the Senate, whichever comes first.  We wrote about O’Rielly’s nomination troubles and Section 230, here.  O’Rielly testified before the House Communications Subcommittee and used his opening remarks to reflect on his time at the Commission.  (O’Rielly Remarks).
• Chairman Ajit Pai circulated among his fellow Commissioners a Notice of Proposed Rulemaking that would, if adopted, require more specific disclosure when a broadcast station is airing programming that is directly or indirectly provided or sponsored by a foreign governmental entity. The new rules would include standardized disclosure language that specifically identifies the sponsoring foreign entity.  (News Release)
• A recent consent decree serves as a reminder that changes to ownership and control of broadcast licenses require prior FCC approval. The licensee of two Nevada stations failed to request approval of a buy/sell and stock purchase agreement that gave another party control of the stations.  Under the terms of the consent decree, the transaction will be approved, but the licensee must pay an $8,000 penalty and follow a compliance plan for three years.  (Order)
• The FCC denied an Application for Review that sought to reverse the Media Bureau’s ruling that eighteen stations had failed to negotiate in good faith with DirecTV for retransmission consent. Each station faces a $512,228 penalty.  We wrote about the earlier stages of this case and generally about the good faith negotiation requirement, here. (Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture)

This summary of the week’s regulatory news for broadcasters comes from the attorneys at Wilkinson Barker Knauer, LLP in Washington, DC. (https://www.wbklaw.com/).

Courtesy Broadcast Law Blog

Now that we are immersed in the heart of the political broadcasting season, issues of sponsorship identification regularly arise.  For on-air broadcasts, any paid advertisement that conveys a message dealing with any controversial issue of public importance (state or federal) requires at a minimum an on-air sponsorship identification stating that the ad was “paid for” or “sponsored by” the person or organization that paid for the time.  Federal candidates have a more extensive obligation for identifying themselves in their ads, particularly if they mention an opposing candidate.  These identification rules come both from the FCC (which stations need to enforce) and from the Federal Election Commission, which are the responsibility of the candidate and their campaign committee.  To help sort out some of these obligations, and the requirements for political disclosure statements and federal candidate certifications that entitle them to lowest unit rates, check out this video that I prepared for the Indiana Broadcasters Association as part of a series on political broadcasting topics:  https://www.indianabroadcasters.org/iba-news/political-advertising-requirements-with-iba-washington-counsel-david-oxenford/

The video covers the requirements of broadcasters to ensure that the proper sponsorship identification is contained in political advertising.  Online political advertising, however, is much more complicated as there is no single body of law that governs those responsibilities.  As we wrote here, the FEC has general requirements providing that online political advertising must have sponsorship identification. The FEC also has an open proceeding to mandate more stringent sponsorship identification obligations akin to those required on broadcast and local cable political advertising.  Last week, the Congressional Research Service issued a study on the state of the law regarding online political advertising, highlighting the many issues involved in providing more robust political disclosures.  These issues are at least partially triggered by the many players involved in online advertising sales.  There is a very readable outline on pages 16-19 of the report on all the players in the digital advertising ecosystem – with intermediaries, including demand- and supply-side platforms, that complicate the usual direct interaction between the media outlet and the advertising buyer, which in turn complicates the political compliance process for sponsorship identification.  The study, on page 18, even cites to the article that I wrote discussing the concerns about sponsorship identification in any programmatic political advertising.

The CRS report covers many of the pending federal legislative proposals to address concerns about political advertising disclosures.  While it is a very readable and comprehensive review of the current federal sponsorship identification obligations (and of some of the ambiguities in federal rules for online political advertising), the CRS report does not provide a review of some of the industry codes of practice and state regulations that have attempted to address the lack of uniform federal obligations for online political sponsorship identification.  We wrote here about the early days of the New York and Washington State political advertising regulations that govern online political advertising, and these state regulations have become even more detailed in recent years as implementing regulations have been adopted.  California, Virginia, Nevada and several other states have also adopted rules requiring that political sellers know their customers and provide some public disclosure about the sponsors of online political messages.  So, too, have various trade organizations adopted voluntary principles governing online political advertising sponsorship disclosures, including the Digital Advertising Alliance’s Application of Self-Regulatory Principles of Transparency and Accountability to Political Advertising and the Network Advertising Initiative’s Code of Conduct.

In advising clients during this busy election year, we have discovered that these voluntary codes of conduct and state regulations have made for a very confusing legal landscape for digital political advertising.  None of these rule and laws are the same – they do not even work off the same models.  All of them place burdens on political advertisers, and some impose burdens on the media platforms (although see the decision we wrote about here where a Maryland statute putting disclosure burdens on the platforms was declared unconstitutional).  Other laws are ambiguous as to where the legal obligations lay.  This may be why we have seen calls by some of the biggest online platforms, including Facebook, for federal legislation to make the rules of the road uniform and transparent.  Given the current legislative climate and the short timeline before the election and the end of the current Congressional session, the prospects of such federal legislation being enacted soon are probably dim. Until then, digital platforms selling online political advertising need to study these differing regulatory schemes to avoid becoming part of some controversy over hidden political persuasion taking place on their services.

Courtesy Broadcast Law Blog