Earlier this week, the FCC released a Public Notice announcing its plans for the initiation of new annual reporting requirements for TV stations under the revised Children’s Television Rules. As we wrote here, the FCC this summer adopted changes in the rules governing the broadcast of educational and informational programming directed to children. These changes included the abolition of the Quarterly Children’s Television Reports and their replacement with an annual Children’s Report to detail a station’s performance in meeting the new educational and informational programming requirements. Earlier this fall, the FCC released guidance on the reporting of information from the third quarter of this year, as the new rules became effective on September 16 (see our article here). The Public Notice released this week covers the full transition to the annual reports.
The FCC anticipates the revised annual report will be ready for use in the FCC’s LMS database by January 1, 2020. Children’s television programming aired on or after the September 16, 2019 effective date of the new rules will be reported by commercial full power and Class A television stations on a broadcaster’s first annual Children’s Report, which will be due no later than January 30, 2020. The FCC’s Media Bureau will issue another public notice announcing the actual effective date of the revised form.
To facilitate the filing of the new annual Children’s Report, after December 17, 2019, LMS will no longer be able to accept new quarterly reports or allow broadcasters to amend previously filed quarterly reports. So any missing reports or amendments to already-filed reports should be made by then. Review your files now, because if you discover the need to amend a report after that date, all you can do is place an explanatory note in your online public file in the Children’s Report section explaining why the FCC filings are incomplete or inaccurate. Of course, that will also necessitate an exhibit in a TV station’s upcoming license renewal application highlighting the mistake.
The Commission also notes that, to the extent necessary, it waives the requirement that broadcasters file a quarterly Children’s Report by January 10, 2020. So be prepared for the transition to the new reporting system for children’s television reports – and be ready to file your annual Children’s Report by the January 30 deadline.
Courtesy Broadcast Law Blog
The FCC last week announced an extension of the deadline for initial comments in its proceeding to examine the regulatory fees that are paid by VHF television stations. We wrote here about this Further Notice of Proposed Rulemaking, which asked questions including whether VHF television stations and stations in the FCC’s incubator program should pay lower fees than currently scheduled. Those comments were originally due on November 22, but at the request of a satellite trade association whose members have fees that are also addressed in the proceeding, the deadline was extended until December 6, with reply comments now due on January 6.
Courtesy Broadcast Law Blog
On October 31, the US Department of Agriculture published in the Federal Register interim rules governing the production of industrial hemp under the provisions of the 2018 Farm Act (see the USDA press release here). These rules will allow the USDA to approve state and tribal plans for the regulation of hemp production. It also allows for the USDA to authorize growers in states that have not adopted their own plans (or that have restricted the production of hemp). The USDA notes the interest in hemp production driven by interest in CBD products derived from hemp. While these rules do not address advertising issues specifically, they do ease some of the concerns that many broadcasters and other media companies have had about advertising CBD products when it was unclear that the production of those products was legal. We wrote about some of those concerns many times, including in our posts here and here.
These interim rules recognize that CBD products can already be legally produced under provisions of the 2014 Farm Act. As we noted here, that Act authorized experimental production of hemp products. The 2014 Act also permitted research into commercial exploitation of hemp products – probably permitting greater production than Congress or the USDA expected when the Act was adopted. The October 31 public notice states that production under the 2014 Act will be allowed to continue for the next three years until permanent rules implementing the 2018 Act are adopted. In fact, the USDA notes that it expects that over 50% of hemp production will be by those operating under these grandfathered 2014 licenses for the next year. This seems to recognize that a significant amount of production already underway is in fact legal under federal law, ameliorating some of the concerns as to whether CBD products now being sold could have been legally produced.
However, the USDA also notes that states are free to adopt rules that are more restrictive than the rules it adopts – and states can even prohibit the production of any hemp products. Thus, while the adoption of the interim rules eases many of the concerns of media companies about the legal origin of CBD, these companies still need to look at their state laws to make sure that they are not promoting a product that remains illegal in their state – or somehow promoting uses that would be prohibited in the state. For instance, there are states in which CBD products are legal only with the written permission of a doctor – so promoting unfettered sale of the product may run afoul of state laws.
Not only do media companies have to worry about state laws, they also need to consider the rules and policies of other federal agencies. USDA rules specifically note that uses of CBD remain under the jurisdiction of the Food and Drug Administration. As we have written before (see our posts here, here and here), the FDA and the Federal Trade Commission have been active in cracking down on CBD marketing where specific health claims are made (except for the one FDA approved CBD-based product used for control of seizures). The FDA has also prohibited marketing of CBD food additives or oral medications until it conducts further studies on their safety and labeling. So any media company looking to take CBD advertising also has to look at these restrictions.
While this action of the USDA appears to resolve some of the questions about the legality of the production of CBD products, it does not eliminate all legal concerns. So talk to your attorneys and carefully consider your marketing for any of these products.
Courtesy Broadcast Law Blog
As we noted in our list of November Regulatory dates for broadcasters, at its November 22 meeting, the FCC will be considering the adoption of a Notice of Proposed Rulemaking (see the draft order here) allowing AM stations to go all digital – on a voluntary basis. This Notice follows a Petition for Rulemaking which I filed on behalf of my client Bryan Broadcasting (see our articles here and here). The FCC’s NPRM, if adopted in the form of the draft Notice, suggests that the Commission, subject to a review of comments, is inclined to adopt the proposal to allow AM stations to voluntarily convert to an all-digital operation. While that is the tentative conclusion of the FCC, it does pose numerous questions on which it seeks comments.
The FCC’s questions include inquiries on the technical, programming, and operational aspects of the conversion of an AM station to digital. But the FCC recognizes some of the potential benefits of the all-digital operation and identifies some of the likely early adaptors of any such technology. These early adopters would likely include AM stations that have an FM translator that can continue to provide programming to the public even if some of the public does not have a radio with AM digital reception capabilities. We note that some AM operators with FM translators have already suggested the possibility of surrendering their AM signal, a proposal that has thus far been rejected by the FCC (see our articles here and here). The prospect of an all-digital AM operation would allow these stations to rely on their FM translator for current analog coverage of their markets, while trying to provide a more robust AM signal in the long-term rather than simply abandoning the service altogether. In addition, music stations are much more likely to be interested in an all-digital operation with the promise of higher fidelity than possible through an analog operation. But the FCC asks numerous other questions.
Some of the technical issues include whether the all-digital AM operation will in fact provide a better listening experience, will its signal be listenable for greater distances than the analog AM signal, will signal interference from bridges and power lines degrade the digital listening experience, and will the directional patterns of some stations reduce the benefits of the service? Other very specific technical issues about the standard are also raised in the draft Notice. Perhaps most importantly, as some commenters on the original petition for rulemaking expressed concerns, the FCC asks whether an all-digital operation will post a greater potential for interference to co-channel stations. The FCC tentatively concludes that interference to adjacent channel stations is unlikely to be a problem as the all-digital AM signal uses less of the assigned channel than current hybrid analog/digital operations.
The FCC also asks about other benefits that would be derived from an all-digital operation. Would artist and song information be displayable to listeners? Would AM stations have the potential to provide more data services? Would an all-digital operation allow for multicasting on AM as it does on FM? Could digital boosters be used to fill in gaps in the AM signal?
The FCC also asks about the costs. It suggests that the owner of the digital technology asks for a $10,000 licensing fee for current operations. Would that fee apply as well to an all-digital operation? The one AM station already operating on an experimental basis in all-digital mode – Hubbard Radio station WMFD(AM) in Frederick, Maryland – indicated that certain other equipment needed to be changed to allow for an all-digital operation. The draft Notice asks what these costs would include – and would these costs be faced by all converting stations?
The regulatory steps toward conversion were also the subject of a question. Currently, for an AM station to begin operating in the current hybrid mode where both analog and digital signals are being broadcast, only a simple notice to the FCC is required. The Commission asks if notice will be sufficient in this case as well – and can stations switch back to analog by notice if they determine that the digital operations are not successful?
If the FCC adopts this draft NPRM at its November 22 meeting, comments and reply comments will be due 60 days and 90 days, respectively, after the NPRM is published in the Federal Register. Watch for the discussion of this item at next week’s FCC meeting.
Courtesy Broadcast Law Blog
In September, a three-judge panel of the US Court of Appeals for the Third Circuit released a 2-1 decision overturning the FCC’s 2017 decision modifying many of its ownership rules (see our summary of the Court decision here, and our review of the 2017 decision here). The Court’s decision not only upset the plans of many media companies for acquisitions based on the changes adopted in the 2017 decision, but also dashed the hope of many radio companies for timely changes in the radio ownership rules that are under consideration by the FCC in its next Quadrennial Review of its ownership rules (see our summary of the issues in the current Quadrennial Review here). Last week, both the FCC and a number of industry groups who were parties to the Third Circuit case filed Petitions asking that all of the sitting judges on the Third Circuit vote to rehear the decision of the three-judge panel.
The panel’s decision did not find that any of the rule changes adopted by the Commission (including the abolition of the newspaper-broadcast cross-ownership prohibition) were not justified by changes in the media marketplace. Instead, the panel voided the FCC’s decision because it did not believe that the FCC had enough historical data on minority and female ownership to be able to judge the affects of any ownership changes on diversity of ownership in the media industry. The FCC Petition for Rehearing centered on an argument that the Commission had plenty of data to support its conclusions – and that Courts have never required government agencies to have perfect information in making any decision. Instead, agencies are only required to have sufficient factual data to justify their conclusions. The FCC argued that, where the information that is sought by the panel might simply not exist and where the panel’s insistence on the information has held up the FCC’s attempts to modernize its media ownership rules for a decade and a half as the same judges keep rejecting FCC attempts to justify its ownership decisions, the full Court should step in and conduct a rehearing. The industry parties emphasized how the decision was overbroad – overturning all aspects of the FCC’s decision – even parts that had not been challenged by the petitioning parties. The industry participants also pointed to the fact that real hardships were being imposed on media companies as the FCC had not been able make changes in its ownership rules to reflect the changes in the industry that had occurred in what may have been the most dynamic 15 years in the history of the mass media. With these requests for rehearing on file, what is next?
Courts are not on any timetable to make a decision on petitions like these. A decision could come quickly (most likely if the other Judges just decide not to review the decision of their colleagues) or it could take months, particularly if there are judges who want to write opinions that differ from whatever the majority of the Court decides. This kind of “rehearing on banc” is rare, but this is an unusual case where the same three judges have overseen an agency’s decision making for so many years. If the full Third Circuit does decide to rehear the case, they could ask for additional oral argument or potentially even additional briefing before making a final decision.
So, even if successful, this process could take a while. If unsuccessful, the FCC could appeal to the Supreme Court (though the Supreme Court only takes a limited number of cases every year, and this one may not be the type of broad issue that is most usually reviewed by the high court). Otherwise, the FCC would have to once again try to justify its ownership rule changes by trying to gather and assess the information which the Court has sought. In any event, unless the rehearing petitions are acted on in record time, don’t look for a resolution of the ownership issues this year. Any decision next year could be complicated by the campaign for next November’s elections, during which controversial decisions tend to be deferred. Any potential for imminent resolution of the fate of the 2017 ownership decision is thus dependent on the Third Circuit, and review beyond that is likely much further in the future.
Courtesy Broadcast Law Blog
It seems like every other week, there is a story about an online media giant making changes in their rules that govern political advertising on their platform – and being either praised or condemned for doing so. We recently wrote about the controversy over Facebook deciding to not fact-check candidate ads, and how Congress itself requires by statute that broadcast stations take that same position. Broadcast stations are not allowed to censor ads from legally qualified candidates so, except in very limited circumstances where the ads may be criminal in nature (and not where they might just give rise to civil claims, like in the case of defamation or copyright infringement), broadcasters cannot reject ads based on their content. The right of a person being defamed in an ad for redress of any civil claim they may have is against the candidate who sponsored the ad, not against the broadcaster. Last week brought the news that Twitter has decided to ban political ads from its platform. Broadcasters, on the other hand, have no ability to ban ads for Federal candidates, as Congress has legislated a right of access to the airwaves where broadcasters cannot refuse to run political advertising from any Federal candidate.
That right of reasonable access, written into Section 312 of the Communications Act, requires that broadcasters give Federal candidates access to all classes of advertising time sold on a broadcast station, and that access be provided in all parts of the broadcast day. See our post here for more information about that reasonable access requirement, and our post here on the limited exception accorded for special events with limited advertising inventory (like the Super Bowl), where the provision of ads to one side might be problematic as there would be no opportunity for an opposing candidate to find an equivalent opportunity to advertise, and because of the potential disruption to commercial advertising on these stations given the limited availability of advertising breaks in such programs.
The reasonable access requirement is imposed on all commercial broadcast stations. Its applicability to noncommercial stations was repealed when candidates started to demand free time on NPR affiliates (including one here in the DC region). It has never applied to cable systems – and certainly does not apply to online media platforms. It has also raised interesting issues about requiring access for some Federal candidates who, because of the no censorship provision of the rules that we wrote about in connection with the Facebook ads, decide to demand time to air ads containing content that reasonable broadcasters would prefer to reject, but have to run because of the interplay of these two rules imposed on broadcasters (see, for instance, our articles here, here and here).
The mandated access to broadcast stations is one more way in which broadcasters, in dealing with political advertising, are treated differently than are their online competitors. While there have been many calls to regulate the political communications obligations of online platforms in the same way as broadcasters are regulated, those making these calls need to be aware of just how broadcasters are regulated as many of those regulations would likely never be tolerated in an online world.
Courtesy Broadcast Law Blog
The FCC announced on Friday that it will be hosting a symposium on the state of the broadcast industry on November 21. On that day, there will be a panel in the morning on the state of the radio industry and one in the afternoon on television. The Public Notice released Friday lists a diverse group of panelists, but says little beyond the fact that the forum will be occurring. What could be behind the Commission’s decision to host this session?
The FCC is working on its Quadrennial Review of its ownership rules (see our articles here and here). There were many who expected that review to be completed either late this year or early next, with relaxation of the radio ownership rules thought to be one of the possible outcomes. Of course, quick action may have been derailed by the decision of the Third Circuit Court of the Appeals to vacate and remand the Commission’s 2017 ownership order. The court’s decision unwinds the FCC’s 2017 order which included abolition of the broadcast newspaper cross-ownership rule and the rule that limited one owner from owning two TV stations in the same market unless there were 8 independent television operators in that market – see our article here on the 2017 decision and our article here on the Third Circuit’s decision. The basis of the Third Circuit decision was that the FCC did not have sufficient information to assess the impact of its rule changes on minority ownership and other potential new entrants into broadcast ownership. If the FCC did not have enough information to justify the 2017 decisions, many believe any further changes in its rules are on hold until the FCC can either satisfy the court’s desire for more information on minority ownership or until there is a successful appeal of that decision. Even though FCC changes to its ownership rules may be in abeyance, the November 21 forum can shed light on the current state of the industry and why changes in ownership rules may be justified.
As we wrote here, the Department of Justice a few months ago held its own listening session on the impact of digital media on broadcasting – specifically TV. Almost all of the participants in that session testified that digital advertising was competing with television, though there was disagreement on the severity of the impact of digital on the television industry. But even with this widespread agreement on the existence of competition from digital advertising, in approving the acquisition of the Tribune Company stations by Nexstar, the DOJ continued to treat broadcasting and digital media as operating in separate product markets, finding that television offered unique benefits to advertisers (see the complaint filed following that review here at paragraphs 37-38).
The FCC’s November 21 session may look at some of these issues so that the FCC, when it next reviews the ownership rules, can make an independent assessment as the expert agency on communications matters of the impact that digital has had on radio and television. In comments filed in the Quadrennial Review assessing potential changes to the radio ownership rules, a group of radio owners with whom I worked submitted expert statements to show that digital advertising comprises more than 50% of local advertising in every local market. One expert stated that local advertisers are now inundated with advertising choices and are unsure of what kind of advertising really works, so they are testing all different forms of advertising – essentially seeing digital as interchangeable with traditional broadcast and print media advertising. With the explosion of media outlets of all kinds in the last 20 years, advertisers are trying to figure out what works – and exploring all media in doing so. Economist Mark Fratrik of BIA/Kelsey, who provided evidence on the impact of digital on broadcasting in the NAB’s comments filed in the Quadrennial Review proceeding, will be on the panel discussing radio issues at the FCC’s November symposium.
Assessing the impact of digital competition on traditional media is fundamental to understanding today’s media marketplace, and the regulation of that marketplace. In recent decisions, the FCC has looked to digital media in assessing the degree of effective competition with cable to determine when relaxation of cable rate regulation was appropriate. This same analysis needs to occur with broadcasting in assessing the regulatory approach best suited to the industry. While some have called for more regulation of digital media, that approach may well lead to unintended consequences when one does not understand the impact of regulation on industries currently subject to it (see, for instance, our article on the call to impose political advertising regulations on Facebook). This November 21 forum may be a good start in the FCC’s development of a real understanding of the state of the media marketplace. Of course, a single symposium lasting but a few hours cannot provide a full understanding of all of the dynamics of the media marketplace, but it is certainly a welcome addition to that process.
Courtesy Broadcast Law Blog
November is not one of those months with due dates for renewal filings, EEO public file reports or quarterly issues programs reports. Some of those obligations wait until December, when renewal filings for radio stations in Georgia and Alabama are due by December 2 (as December 1 falls on a weekend). Due for uploading on or before December 1 are EEO public file reports for station employment units with 5 or more full-time employees for radio or television stations in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, and Vermont.
November 1 does signal the first day on which radio and TV stations can file their Biennial Ownership Reports. As we wrote here, the FCC has extended the deadline date for those filings until January 31, 2020 as the FCC is making refinements in its forms in the LMS filing system. Reports are to reflect the licensee’s ownership as of October 1, 2019 so stations have the information that they need and can start filing their reports later this week.
While there are no license renewal filing deadlines in November, post-filing license renewal notices must continue to be broadcast on radio stations that filed their renewals on or before November 1 in Florida, Puerto Rico and the Virgin Islands. Pre-filing announcements must also be run by the radio stations in Alabama and Georgia that will be filing their renewal applications by December 2. These pre- and post-filing announcements are to be run on the 1st and the 16th of November. And pre-filing announcements for radio stations in Arkansas, Louisiana, and Mississippi must begin on December 1.
Comments are due on the procedures for the upcoming auction for new commercial FM allotments on November 6, though the auction itself will not be held until April 2020 (see our article here). The FCC’s Further Notice of Proposed Rulemaking dealing with the annual regulatory fees paid by VHF television stations and stations involved in an FCC incubator program are due on November 22 (see our article here).
Comments are also due in November on a proposal to adopt more flexible rules for distributed transmission service by television stations that adopt the new NextGen (ATSC 3.0) television transmission standard. Initial comments on that proposal are due on November 12, with reply comments due November 27. See our article here for more information.
Reply Comments on the FCC’s review of its broadcast EEO rules are due November 4 (see our article here on the proceeding). Comments on the FCC’s proceeding to look at whether to change the requirements for providing local public notice of broadcast applications are due on November 18, with reply comments due December 2. See our article here on that proceeding.
LPTV stations and TV translators have until November 14 to file applications for reimbursement of the expenses that they incurred due to repacking issues following the TV incentive auction. See our articles here on the FCC’s extension of the filing deadline to November 14, and here and here on the reimbursement process.
The FCC will also be conducting a Forum on November 21 to review the state of the broadcast industry – looking at radio in the morning and TV in the afternoon. We’ll write more about that Forum tomorrow. For more information about the event, see the FCC’s Public Notice here.
The monthly FCC open meeting, to be held on November 19, will examine two broadcast issues. First, it will look at a Notice of Proposed Rulemaking that proposes to allow AM radio broadcasters to operate in an all-digital mode. The FCC’s draft NPRM is available here. The second item is a Notice of Proposed Rulemaking proposing to eliminate or modify the rule that restricts simulcast programing on two stations in the same service (AM or FM) if they serve substantially the same area. The draft NPRM is available here.
As always, these are just highlights of the regulatory issues for broadcasters this coming month. Always check with your own counsel and advisors to determine what dates and deadlines might affect your station’s obligations.
Courtesy Broadcast Law Blog
The FCC’s Further Notice of Proposed Rulemaking on annual regulatory fees was published in the Federal Register this week, setting the comment date in that proceeding as November 22, with reply comments due December 23. As we wrote when the FCC’s fee decision for 2019 fees was released, this Further Notice is examining a number of issues. For broadcasters, there are two directly relevant issues. First, there is a question as to whether there should be some reduction of the regulatory fees for VHF television stations and, if so, what that reduction should be. The FCC this year moved to basing regulatory fees for a TV station on its estimated population coverage. Some VHF station owners have argued that, because VHF stations are subject to much more interference and have worse building penetration than do UHF stations, their predicted coverage does not accurately reflect their potential audience as it may for UHF stations, and thus the do not receive the same benefits from their license and the associated regulation as does a UHF station. The Further Notice seeks comment on this issue.
The second issue is whether stations involved in the FCC’s incubator program (about which we wrote here) should receive pay lower fees in order to promote the economic success of these stations owned by new broadcast owners. The hope is that this program will encourage broadcast ownership diversity. While organizations advocating for broadcast diversity have supported this idea, the recent 3rd Circuit decision overturning the FCC’s recent ownership rules and remanding them to the FCC for further consideration (see our article here) has put the incubator program on hold for the time being. Nevertheless, interested parties can file on this question and on the issue of a reduction in fees for VHF stations, by the November 22 deadline.
Courtesy Broadcast Law Blog
The FCC last week released two decisions (here and here) addressing complaints from public interest groups against several TV stations alleging that the stations had not sufficiently disclosed in their online public files sufficient information about political issue advertising. These decisions, as detailed below, will end up making life significantly more difficult for broadcasters running ads from non-candidate groups, as they will need to review each issue ad to come up with a list all of the issues of public importance discussed in the ad. A perhaps unintended result may also be that there will be more disclosure in the public file of the cost of non-candidate political ads supporting or attacking state and local candidates when those ads mention Federal issues – as more and more ads dealing with state elections now do. Watch as the ramifications of these decisions become clear in the coming months.
Background: These decisions should not strike regular readers of this blog as particularly new, as these complaints were considered by the FCC’s Media Bureau in early 2017, under the former leadership of the FCC (see our article here). When the new Republican-controlled Commission took over, the Media Bureau decisions were rescinded, as the new Commission felt that these issues should be considered by the Commissioners rather than at the Bureau level. The decisions that resulted from this additional review come to much the same result as had the Media Bureau decision, though some of the explanations are more detailed. In making the decision more detailed, the Commission may have made the acceptance of political ads from non-candidate groups even more troublesome for broadcasters than these ads have been in the past. What do these rulings provide?
The decisions set out two principal requirements that had not been clearly articulated in the past. First, the decisions require that broadcasters who accept ads on Federal issues of national importance must list in their public file disclosures about the ads all the Federal issues described by the ad – even if there are multiple issues which the ad discusses. As described in more detail below, this will be true even where the ad is one supporting or attacking a political candidate – if in doing so it also discusses Federal issues. If a third-party ad supports or attacks a candidate and mentions Federal issues, those issues need to be listed in the political file in addition to listing the candidate who is being supported or attacked. Second, the decisions require that the broadcaster, in disclosing the governing board of an organization sponsoring an ad, cannot accept a single name as making up that board without making an additional inquiry of the organization asking if there are in fact more officers or directors than the single person.
Disclosure of Political Matters of National Importance: Let’s look first at the decision requiring the disclosure of all of the issues raised by a third-party ad, and what that may mean for a broadcaster. The decision looks at the requirement that that the Bipartisan Campaign Reform Act back in 2002 added to Section 315 of the Communications Act requiring that, when there is an offer by a non-candidate group made to a broadcaster to buy an ad about Federal issues, the broadcaster must disclose in its public file all the same information that it discloses for a candidate ad (i.e., whether or not the offer was accepted, if accepted the class of time purchased, the schedule of spots that will run, the price paid for the spots and, after the spots run, the exact times at which they aired). In addition, for these issue ads, the public file disclosure must also report on the candidate or issue discussed in the ad. As discussed below in connection with the second aspect of last week’s decisions, there is also a separate requirement for all issue ads (state and Federal) that you provide information in the public file about the sponsoring organization, including the names of its chief executive officers, members of its executive committee, or members of its board of directors. As one of the decisions makes clear, make sure that the disclosure is of the legal name of the sponsoring organization, not just a set of initials that those in the political world might know, but which may be unfamiliar to the public.
Section 315, in discussing the ads that are subject to these requirements, says that disclosure will be required for any ad discussing a “political matter of national importance.” The statute gives three examples of what are considered political matters of national importance: (1) any discussion of any candidate for office; (2) any discussion of any election for a Federal office, and (3) any national legislative issue of public importance. Last week’s decisions made clear that, to trigger the obligation, the candidate who is mentioned needs to be a Federal candidate. The Commission also goes into detail to define a “national legislative issue of public importance” as an issue currently pending in legislation before Congress. The FCC goes into great detail in justifying that interpretation – and then says that even if an issue is not currently pending before Congress, it might still be a “political matter of national importance” that triggers the reporting obligations – as the three categories set out in the statute are illustrative, not definitive. So, the Commission notes, a debate over some tax ruling at the IRS, while not pending before Congress, could still be a political matter of national importance triggering the broadcaster’s disclosure obligation. Seemingly, matters already voted on, like the health care bills, or perennial Federal issues on which there may be no specific legislation pending before Congress (e.g., abortion, gun control, civil rights, etc.) would also trigger these obligations.
The importance of the broad nature of the definition becomes clear when coupled with the newly articulated requirement that all issues discussed in a third-party ad must be disclosed by the broadcaster. That means that the broadcaster needs to review the ad, and make sure that the disclosure documents to be placed in the public file disclose all the issues addressed in the ad. Even if the ad is about a Federal candidate, the disclosure placed into the public file needs to disclose not just the candidate being supported or opposed, but also any issues addressed in the ad. So if the ad attacks a Democratic candidate for Congress by saying he is weak on immigration and wants to raise your taxes, the public file disclosure would have to list the name of the candidate being attacked (and the office the candidate is running for), plus the fact that the ad discussed immigration and taxes. The FCC said that it did not think this would put a great burden on broadcasters – but it does mean that the broadcaster will have to review each ad that runs on its station and make sure that all of the issues are identified. While the Commission seemed to think that this would make disclosure more uniform, as each station running an ad would not pick a different issue to highlight, in fact, this will require many subjective judgments by broadcasters as to what ads are in fact being discussed and whether such issues are political matters of national importance. In talking to lawyers who practice in this area all the time, we are sure that there would be disagreement among us lawyers on how to characterize many issues – and are sure that those whose job is to sell broadcast ads will not have an easier time making such calls than those of us whose job it is to interpret the meaning of FCC rules and governing statutes.
While third-party ads supporting or attacking a state or local candidate do not normally trigger the obligations to disclose all of the price and schedule information, the rulings from last week indicate that there is the real possibility that ads about state and even local candidates could also discuss Federal issues – and would thus trigger obligations to include all the price and schedule information in the file at the same time as it requires the disclosure of the issues discussed. For instance, an ad attacking a candidate for governor who currently serves in Congress because he did not support the President’s pending judicial nominations, or an attack on a candidate because he favors the elimination of a woman’s right to choose, may well be seen as discussions of Federal issues that need to be disclosed, and trigger all of the obligations to disclose price information and scheduling that do not normally attach to third-party ads on state issues.
The difficulty in making these calls can be illustrated by a current ad running on TV in the Washington DC area for a candidate for the Virginia legislature. In it, the candidate attacks his opponent for being in the pocket of the NRA. If this ad had been from a political party or other third-party group and not a candidate, it would be a perfect illustration of the concerns about identifying issues. The ad talks specifically about laws dealing with how close a shooting range can be from residential properties or schools and playgrounds. But it goes on to state that the candidate is not afraid of the NRA and is for common-sense gun regulation. On first glance, that ad seems to be about a state issue – a state legislative election. Thus, no cost and scheduling disclosures would be needed in the public file. But, under last week’s ruling, if it mentions a Federal issue, public file details about price and schedule would be required. To make the determination whether a public file disclosure was required, the station would have to look at the issues and determine if the issues that it mentions – specific gun laws about the distance needed between a gun range and schools and houses, and support by the NRA – are issues of state or federal law. Even if the distance between a shooting range and homes and schools are matters of state law, is there a bigger issue involved – standing up to the NRA – a separate Federal issue? If so, would that make this a Federal issue and require public file disclosure? Who knows? We’ll have to wait to see what the FCC says in the coming months. But even if this case is not one that demands disclosure, there will be many ads dealing with state elections that will also implicate Federal issues – making full disclosure about the purchase details for those ads a requirement.
One interpretation that was helpful from the decision last week was the determination that the mere mention of these issues would not trigger a disclosure requirement, e.g. a car’s dealer mention of a Presidential election day sale would not trigger a disclosure obligation. To trigger the public file obligation, the ad must mention an issue in some political way. That does not simplify the consideration of real issue ads, but it does make clear that the mere mention of an issue or candidate (for instance, on an ad promoting the sale of a newspaper or magazine) does not necessarily trigger the disclosure obligations.
Disclosure of Executive Officers or Directors: The second aspect of the rulings, that stations need to ask about the chief executive officers or the members of the board of directors, or the members of its executive committee, is somewhat more straightforward. The FCC’s new requirement is that the station needs to ask more questions as to whether there are more officers or directors of an organization, when the station receives only one name listed in response to the question on the NAB Form PB-18 or similar documents used by the station asking for the officers or directors of the sponsoring organization. The FCC said that stations can ask the sponsoring organization or the advertising agency whether there are additional members of the governing board of the organization. The important thing under the FCC record is that a station must ask whether there are additional names to disclose when only a single name is provided or the station otherwise has reason to believe that the disclosure is inadequate. If the sponsor says that there are no other officers or directors, keep notes that you asked (not required to be in the public file – but to prove you asked if you are ever questioned).
These decisions give broadcasters plenty to think about – and it may give broadcasters plenty to do. Because of the additional burden being placed on broadcasters, it is possible that some will be asking the FCC to review some aspects of the decisions. But, for now, these are the new rules. So be sure to prep your sales force and the keeper of your public file about these new disclosure obligations – and start compliance now.
Courtesy Broadcast Law Blog