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Indian E-music – The right mix of Indian Vibes… » Moving Broadcast Political Advertising Rules to the Online World – NY State Adopts a New Law While Congress Considers Online Political Advertising Disclosures, and the FEC Considers Enhanced Online Sponsorship Identification


Moving Broadcast Political Advertising Rules to the Online World – NY State Adopts a New Law While Congress Considers Online Political Advertising Disclosures, and the FEC Considers Enhanced Online Sponsorship Identification

Delivered... David Oxenford | Scene | Mon 14 May 2018 5:15 pm

With high profile primaries in numerous states and similar elections last week, and more coming over the next few months in preparation for the November election, broadcasters are dealing with the legal issues that arise with on-air advertising that either promotes or attacks candidates and which addresses other important matters that will be decided in the election – including ballot issues in a number of states. While we have addressed many of the legal questions that arise with on-air political advertising in other posts on this blog and elsewhere (see, for instance, our Political Broadcasting Guide here and these slides from my recent presentation on the FCC political advertising rules for the Washington State Association of Broadcasters), we thought that it was worth discussing some of the efforts that are underway to bring FCC-like regulation to the world of online political advertising.

Thus far, the FCC has tended to stay out of the online political broadcasting world. As we wrote a decade ago, other than having to give some consideration to the value of online advertising thrown into a package with over-the-air ads, the FCC avoids regulation of ad sales on websites and advertising delivered solely through other digital media platforms. So a broadcaster who sells stand-alone online ads to political candidates or issue advertisers need not worry about questions of lowest unit rates, reasonable access, or the political file.

In some cases, there may be concerns in this regard. For over-the-air broadcasters, the content of a political ad cannot be censored, and therefore the broadcaster cannot be held liable for that that candidate says in its advertising (see our article here). But what happens if that broadcast programming is streamed on the Internet? The “no censorship” provisions of the Communications Act do not apply, by their terms, to the advertising streamed on the Internet. While one would think that courts would allow the immunity to carry over to simulcast ads, there have been no cases testing that issue. But, certainly, broadcasters should be concerned with on-line ads containing potentially libelous claims, just as they are when airing attack ads by non-candidate groups such as PACs, unions, and corporations to whom the “no censorship” rules do not apply, and where the station has theoretical liability if it has notice that an ad it is airing contains defamatory content or other legally actionable material.

While the FCC has not been regulating advertising that is run solely online, there are numerous attempts to impose FCC-like restrictions on such ads. For instance, the Federal Election Commission currently is accepting public comment on whether it should impose the same sponsorship disclosure obligations on online audio and video political advertising that are imposed on those ads when run on a broadcast television or radio platform (see its Notice of Proposed Rulemaking, here). This would include all the “stand-by-your-ad” disclosures (“I’m John Smith and I approved this message”) that the listening public has become accustomed to on broadcast stations for over a decade.

This would, at first blush, seem to be a common-sense approach to labeling online political audio and video advertising. Yet, in asking for comment on its proposed rules, the FEC advanced two alternative approaches to such regulation – one looking to adopt the broadcast-like disclosures and the other providing only more generalized disclosure obligations about the sponsorship of a political message. Why would that alternative approach be suggested when there are concerns that the very general FEC disclosure obligations that already are imposed on paid political ads are seen as being insufficient? Partially, the alternative has been advanced as there is a fear that the broadcast-like disclosures, while perhaps appropriate for broadcast-like content transmitted through digital channels, may not be appropriate for all audio and video delivered through digital platforms. One example given in the rulemaking is virtual reality games, where commercial content is sometimes embedded in the game itself. If a candidate was to pop up in some virtual world to give some sort of political sales pitch, would having that candidate’s avatar follow up the pitch with a statement as to who he or she is and that they have approved the message be appropriate, or even workable? Would an avatar of a candidate meet the requirement that a full–screen image of the candidate be shown while delivering the stand-by-your-ad disclaimers? Comments in this proceeding are due with the FEC by May 25. The FEC also plans a public hearing on the issues that these proposals raise on June 27.

Congress has also indicated interest in FCC-like regulation on online political and issue advertising. Senators Mark Warner, Amy Klobuchar and John McCain introduced legislation called the Honest Ads Act late last year, following some of the revelations about foreign influence on US elections and the political process through Facebook and other social media platforms. Their legislation would require clear and conspicuous sponsorship disclosures on all electioneering communications (setting out standards for such disclosures), and would impose regulations similar to the FCC’s political file obligations for the disclosure of purchases of more than $500 on political advertisements (including federal issue ads) on large digital media platforms. While introduced last year, that bill has not progressed in the Senate or the House.

Some state legislatures have taken an interest in the issue, and New York adopted its own political disclosure legislation mirroring many of the provisions of the Honest Ads Act. The New York Democracy Protection Act (see summary here and text of the bill as passed by the NY State Assembly here – the final text as signed by the governor apparently not available online) imposes sponsorship disclosure obligations on online advertising, including NY state ballot propositions, plus a requirement for an online repository of sponsorship information for online ads, similar to the FCC’s required online political file. It appears that this political file for online political ads in New York will be hosted by the New York State Board of Elections, similar to the hosting of broadcaster’s online public files by the FCC. The Board of Elections is supposed to come up with implementing regulations within 120 days from the recent passage of the Act, including a determination of which online platforms are subject to these rules. So, if you are selling online political ads in New York, or even if you have online users in New York State, look for those regulations before the November election to see how your activities may be implicated.

In light of all of this legislative activity, some of the big online platforms have voluntarily promised more disclosures. Facebook has reportedly even indicated support for regulation, and press reports indicate that Twitter has as well. Google, while not necessarily supporting regulations, has reportedly announced its own efforts to disclose the identity of political advertisers. So, even in the absence of legislation, it appears that there will be more transparency in online political advertising in time for the November election.

There are bound to be more efforts to regulate online political advertising – either before this election or afterward as a result of practices that could arise during the upcoming campaigns. All companies selling online advertising should be watching these developments carefully, as they may well affect their sales to candidates and issue advertisers – particularly under the already-adopted New York State law.

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