Are Issue Ads By Non-Candidate Groups Entitled to Lowest Unit Rates Just Because a Candidate Approves the Ad?  The FCC Is Asked for Its Opinion

In the 45 days before a political primary and the 60 days before a general election, ads by political candidates (federal, state, or local) airing on a broadcast station or inserted by a local cable system into the programming it transmits to the public are entitled to “lowest unit rates” (LUR).  That means that candidates get the best rate offered or sold to a commercial advertiser whose ads are of the same class of time and running in the same daypart or on the same program.  This includes getting the benefit of all volume discounts given to commercial advertisers without having to buy in the volume that the commercial advertiser would need to qualify for the discount.  We have written more about the details of some of the issues with computing lowest unit rate (or “lowest unit charge”) many times before (see, for example, our articles here, here, and here). 

In a request for declaratory ruling filed by the Florida Association of Broadcasters, an interesting question has been posed to the FCC – can other political advertisers who buy time during the LUR period be entitled to these low rates if they are “authorized” by the political candidate?  Normally, such non-candidate political ads (usually referred to as issue ads) are charged much higher rates than those charged to candidates.

LUR traditionally has been extended only to candidates and their authorized campaign committees.  The FCC has, however, for many years taken the position that certain ads by political parties are entitled to lowest unit rates if they are “coordinated expenditures” with federal candidates (in other words, they are authorized by the candidate and use “hard money” – i.e., money subject to the campaign contribution limits for donations to these candidates).  This is usually a very small category of ads, as typically more hard money donations to candidates go directly to their authorized committees, so that political parties have little to spend on these coordinated expenditures.  But in recent years, in many states, non-candidate political buyers have sought the same treatment when their ads are “authorized” by the candidate.

We first saw this in the 2018 election with ads in Oregon, and later in Pennsylvania.  Those states, and approximately nine other states in the US, have no limits on campaign contributions to candidates, and similarly do not restrict coordination between candidates and other political ad buyers, including political action committees and, in some cases, even corporations.  Other states allow political parties to make sizable contributions to state candidates.  A few states with contribution limits do not prohibit candidates from coordinating their efforts with outside groups, nor do they prohibit candidates from approving messages from certain political buyers.  A few states, including Florida and Georgia, allow candidates for certain statewide offices to set up “leadership committees,” separate from their campaign committee, that can raise significant funds and spend those funds on political ads. 

This confusing hodgepodge of regulations on state and local candidates has made it difficult for broadcasters and the FCC to determine who is entitled to LUR during the pre-election periods.  Are political messages authorized or approved by a candidate entitled to LUR, even when they are paid for by some entity other than the candidate’s authorized campaign committee?  Should they be?  That is the question posed by the declaratory ruling petition filed by the Florida Broadcasters. 

Section 315(b)(1) of the Communications Act says that LUR is provided to ads from “any person who is a legally qualified candidate for any public office in connection with his campaign for nomination for election, or election, to such office.”  That section of the rules does not even specifically say that a candidate’s authorized campaign committee should be given LUR.  In a different section of the rule, requiring federal candidates to provide a certification to stations that they will abide by the “stand-by-your-ad” provisions of federal law when they mention an opposing candidate (i.e., the provisions that require an ad to say “I’m John Smith and I approved this message”), Section 315 states that the certification should cover any ad by the candidate or their “authorized committee.”  The phrase “authorized committee” also comes up in the sponsorship identification requirements spelled out in that same section of the Act.  For the definition of “authorized committee,” Section 315 refers to Section 30101 of the Federal Election Campaign Act (FECA) which says that the authorized committee is the committee that is the “principal campaign committee” or “any other political committee authorized by a candidate….to receive contributions or make expenditures” on behalf of the candidate.  That section points to other sections of FECA that allows candidates to have joint committees to raise funds and, for President, even allows the political party to be the authorized committee if it sets up separate accounts for the campaign.

The Florida Association’s petition suggests that the FEC definition of an authorized committee should be applied in determining who is entitled to LUR.  But that definition, referenced above, only applies to federal candidates, where there are strict campaign contribution limits and limits on the coordination between candidates and other groups that raise funds to support a candidate outside of the campaign contribution limits. The language of the FEC statute, as noted in italics above, if adopted for the states, could end up authorizing many committees to get LUR simply by having the candidate authorize them to “receive funds” or “make expenditures” on the candidate’s behalf.  In essence, especially in states with no contribution limits, it could in theory extend the benefit of LUR to many groups and organizations that have not traditionally been viewed as eligible for LUR. 

This is a very confusing area of the law and, if not interpreted narrowly, could open the door to LUR overwhelming the current political advertising landscape.  It could lead to the airwaves being even more crowded with political ads than they are now.  It also raises questions as to how the FCC’s other political rules (e.g., no censorship) should be applied to these authorized ads.  The FCC has not yet officially indicated that it will ask for public comment on this petition, but if it does, you can bet that there will be many comments from across the political landscape addressing the issues that it raises. 

Courtesy Broadcast Law Blog