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Indian E-music – The right mix of Indian Vibes… » Political Broadcasting


More FCC Consent Decrees for Political File Violations – Issues to Watch in the Last Weeks of the Election

Delivered... David Oxenford | Scene | Fri 16 Oct 2020 5:14 pm

As the campaign enters its final weeks, the FCC has begun to send out the next round of proposed consent decrees to radio broadcasters unable to certify in their license renewal applications, because of perceived deficiencies in their political file, that that every document was placed into their FCC-hosted online public inspection file on a timely basis (see, for instance, this decree released yesterday).  The certification of public file compliance is required of every applicant for license renewal.  As with any other certification, a licensee must review its records and truthfully answer the application’s question, either certifying that it has complied with all of the public file obligations or disclosing any deficiencies.  As we wrote last year, in cases of substantial noncompliance, the FCC has fined stations that essentially ignored the public file rules.  But, until recently, in cases where a station had made a good faith effort to comply but had some minor deficiencies in the public file (as is natural over an eight-year renewal period), the FCC has generally been granting renewals, acknowledging that minor violations do not signal that a broadcaster is not operating in the public interest.  However, in August, the Commission initiated a new policy for stations that reported deficiencies in the political portion of the public inspection file, sending draft consent decrees to virtually all stations unable to certify full public file compliance because of any political file issue.

These consent decrees were modeled on the ones that were sent in July to six large radio broadcast groups as a result of an earlier FCC review of their political files (see our article here on those consent decrees, which also provides a review of a broadcaster’s political file obligations).  The difference is, of course, that the July decrees went to large radio groups for what the FCC described as hundreds of violations at many radio stations.  The new renewal-driven consent decrees were sent to all stations that did not certify political file compliance, even to stations that had only a handful of political advertising sales if those stations determined that they could not certify that all required documents went into the file in a timely fashion.  While the decrees carry no monetary fine, they do require that the signing station enter into a compliance program – appointing a compliance officer, having a written compliance plan, reporting any violations to the FCC as they occur, and providing a report to the FCC at the end of each calendar year for two years cataloging all political sales and when the required documents went into the political file.

After the first round of these decrees were sent in August to over 100 broadcasters from the first year’s radio license renewal groups who could not certify compliance because of political file issues, discussions were held with the FCC about the scope of the decrees.  The FCC recognized that there were some cases where violations were so minor that they did not warrant imposing the compliance burden demanded by the decrees.  The Commission has informally said that where, in the two years prior to the filing of the license renewal application, a station had 5 or fewer instances where political orders were not timely uploaded to the public file, upon request after the receipt of the draft consent decree, a licensee could be excused from having to sign the decree as a condition of their license renewal.  A significant number of smaller stations and larger stations with isolated instances where the uploads were not made on a timely basis, have since been excused from having to enter into these consent decrees.

Even this exception for minor violations does not excuse a station from initially reporting in its renewal that its file was incomplete.  Nor does the Commission’s current policy signal that it will continue to provide in the future this exception for what they term “de minimis” violations.  Instead, these decrees, together with the decrees entered into with the larger radio operators earlier in the year, and the admonitions issued to TV stations for political file violations on disclosures on issue ads (see our articles hereherehere and here), signal the importance that the FCC places on the political file.  Broadcasters should consult their own counsel about any compliance issues that they have in these areas, as this area is particularly complicated with detailed reporting obligations.  Our article on the large radio group consent decrees provides some guidelines for political file compliance, as does this video that I hosted for the Indiana Broadcasters Association on the political file obligations. Do all you can to educate yourself as to the obligations under the FCC’s rules and policies.  The FCC is watching – so take these obligations very seriously.

A Video Summary of the Rules on Lowest Unit Rates and Other Political Broadcasting Resources

Delivered... David Oxenford | Scene | Thu 1 Oct 2020 5:07 pm

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 opportunitiesreasonable 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 hereherehere 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.

October Regulatory Dates for Broadcasters: License Renewals, EEO Reports, Carriage Elections, Quarterly Issues/Programs Lists and More

Delivered... David Oxenford | Scene | Tue 29 Sep 2020 3:18 pm

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 AlaskaFloridaHawaiiIowaMissouriOregonWashingtonAmerican SamoaGuamthe Mariana IslandsPuerto 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 10all TV and radio stations must upload to their public file their Quarterly Issues/Programs Lists for the 3rd 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 3rd or even the early hours of the 4th.  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.

 

Noncommercial Broadcasters and the Political File

Delivered... David Oxenford | Scene | Fri 25 Sep 2020 12:43 pm

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.

A TV Broadcaster’s Guide to Washington Legal Issues – An Update on Where Things Stand

Delivered... David Oxenford | Scene | Tue 22 Sep 2020 4:12 pm

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 CompliancePolitical 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.

This Week in Regulation for Broadcasters: September 12, 2020 to September 18, 2020

Delivered... David Oxenford | Scene | Sat 19 Sep 2020 7:41 pm

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/).

Sponsorship of Political Advertising On-Air and On-Line – A Video Presentation and a Congressional Research Service Study

Delivered... David Oxenford | Scene | Fri 18 Sep 2020 4:28 am

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.

This Week in Regulation for Broadcasters: August 29, 2020 to September 4, 2020

Delivered... David Oxenford | Scene | Mon 7 Sep 2020 4:08 pm

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 FCC released its Report and Order on annual regulatory fees for fiscal year 2020 and, over objections from the NAB, declined to substantially reduce radio regulatory fees, keeping in place its calculation methodology that results in a net increase from 2019 in fees assessed to radio broadcasters (a computational error led to a minor downward adjustment in radio fees from what the FCC set out earlier in the 2020 fee process). The FCC also declined to change its methodology for calculating television fees, transitioning fully to a population-based methodology.  The Commission did acknowledge the hardships stations are facing during the pandemic and has taken steps to provide relief.  That relief for stations that can demonstrate financial hardship includes allowing stations to submit one request seeking a fee waiver and deferral of payment for hardship reasons instead of two separate requests as generally required by the Commission rules; allowing stations to submit by email a request to pay their fees in installments over time at a low interest rate; and directing Commission staff to work closely with and help stations finding it difficult to produce supporting documents that prove financial hardship caused by the virus.  See our post at the Broadcast Law Blog for a deeper look at the Report and Order and see below for links to Public Notices with details about how to pay your fees and how to seek relief, all due by 11:59 p.m. on September 25.  More information and specific fact sheets for the Media Bureau payees will be posted at gov/RegFees.
  • In what could be one of the last steps before opening a noncommercial FM filing window, the FCC denied a Petition for Reconsideration asking it to reexamine the criteria it uses to determine which noncommercial FM application should be granted. Under the current system, when more than one application is submitted, points are awarded to applicants based on certain favored criteria and the applicant with the most points wins.  In the Order, the FCC refused to consider “secondary” grants after the first one is awarded.  For more on how the points system and the “secondary” grants idea would play out and why the FCC declined to change its application evaluation and selection process, read our blog post here.  (Order on Reconsideration)
  • Over the last few weeks, the FCC’s Media Bureau has proposed consent decrees with a large number of radio licensees over their inability to certify on their license renewal applications that they timely uploaded to their online public file all of their political advertising documents (we wrote about the first six of these consent decrees, that were with large companies, here). This coming week watch for an article on our blog about these new consent decrees, and what it means for stations that have not yet filed their license renewal applications.
  • On September 4, the lowest unit charge window opened for the November 3 general election. For more on complying with and calculating lowest unit charges, see our blog post.
  • Comments were due this week on the National Telecommunications and Information Administration’s (NTIA) Petition for Rulemaking asking the FCC to review its interpretation of Section 230 of the Communications Decency Act.  Section 230, which gives online platforms legal protections from liability for content that third-party users post on those platforms, has drawn intense scrutiny from President Trump.  Reply comments are due by September 17.  You can read more about this in our monthly feature of regulatory dates.  (Comments)

Next week, we will be watching for the following to see if any actions affecting broadcasters will be on the agenda at the next FCC meeting:

  • On September 8, we expect Chairman Pai to publish a blog post outlining what the FCC will consider at its September 30 open meeting. Drafts of the items to be considered should be posted September 9 on the meeting webpage.

 

September Regulatory Dates for Broadcasters: Annual Regulatory Fees, Lowest Unit Rate Window Opening, C-Band Reimbursement, Rulemaking Comments and More

Delivered... David Oxenford | Scene | Thu 27 Aug 2020 5:18 pm

As broadcasters continue to respond to the coronavirus while sometimes juggling work duties with family responsibilities like at-home virtual schooling, it would be easy to overlook regulatory dates and responsibilities.  This post should help alert you to some important dates in September that all stations should keep in mind – and we will also provide a reminder of some of the dates to remember in early October.  As in any year, as summer ends, regulatory activity picks up – and this year appears to be no different.

Each year, in September, regulatory fees are due, as the FCC is required to collect them before the October 1 start of the new fiscal year.  We expect that the final amount of those fees, and the deadlines and procedures for payment, should be announced any day.  For broadcasters, one of the big issues is whether those fees will be adjusted downward from what was initially proposed by the FCC in their Notice of Proposed Rulemaking in this proceeding.  The National Association of Broadcasters has been leading an effort (we wrote about this here and NAB detailed recent meetings between CEO Gordon Smith and members of its legal department with FCC staff here and here) urging the FCC to reduce the amount of fees owed by broadcasters, in part because of the financial toll the pandemic has taken on the industry and in part because the proposed fee structure, which is determined by estimates as to how many FCC staffers are detailed to regulating an industry and the related benefit that industry receives, inaccurately reflects the number of FCC employees who work on radio issues.  Look for that decision very soon.

All commercial broadcasters need to remember that, on September 4, the lowest unit rate period for political candidate advertising— the “political window”—opens for the November 3 general election.  During this 60-day period prior to the general election, legally qualified candidates buying advertising on a broadcast station get the lowest rate for a spot that is then running on the station within the same class of advertising time and in the same 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 the station’s most favored advertiser gets for buying hundreds of spots of the same class.  Station personnel who deal with political advertisers must understand how to compute lowest unit rate and the many other rules that apply to political broadcasting.  See our post on computing lowest unit rate here and our Political Broadcasting Guide, which covers a range of political broadcasting issues, here.

Broadcast stations that receive satellite-delivered programming are likely affected by the repacking of the C-Band – the swath of spectrum in which much programming is delivered to satellite earth stations.  As part of that band is being repurposed for wireless 5G operations, companies that have dishes using that spectrum will need to be prepared for changes to their facilities – for which they are entitled to reimbursement.  By September 14, parties with eligible earth stations involved in the C-Band transition can elect to receive a lump sum reimbursement payment instead of reimbursement for their relocation costs.  That election will put the burden on the party taking that payment to plan and fund all changes necessary to comply with the new C-Band operating requirements.  We wrote about the considerations in that choice to take a lump sum payment here.

Also in September, parties can comment, on or before September 2, on the Petition for Rulemaking submitted to the FCC by the National Telecommunications and Information Administration (NTIA) Section 230 of the Communications Decency Act.  Section 230 gives online platforms legal protections from liability for content that third-party users post on those platforms.  These protections have drawn scrutiny from President Trump, culminating in a late-May Executive Order on Preventing Online Censorship.  As this executive order cannot on its own change current law, the NTIA is asking the FCC to take a new look at Section 230 and ensure the Commission’s interpretation of a law passed in 1996 makes sense in 2020.  After this comment and reply comment period, the FCC would still need to issue a Notice of Proposed Rulemaking and accept comments and reply comments before it can take any substantive action.  Reply comments are due on or before September 17.  Read more about this issue and its applicability to broadcast operations here and here.

At their September 29 conference, Justices of the U.S. Supreme Court may well decide whether to review Federal Communications Commission, et al. v. Prometheus Radio Project, et al.  This is the FCC’s appeal of the Third Circuit decision throwing out the FCC’s 2017 order changing many of the broadcast ownership rules – including the abolition of the newspaper-broadcast cross-ownership rule.  Should the Justices decide to take the case, further briefings and oral arguments will be conducted, and a decision could come sometime in 2021.  If not, the Third Circuit decision stands and the FCC will have to evaluate its media ownership rules in line with what the appeals court ordered.  Get caught up with the details of the case, here.

On September 30, the FCC will hold its monthly Open Meeting.  Should there be any broadcast items on the agenda, which should be released during the second week of September, watch the blog for our comments.

As a preview of what is to come in early October, radio stations in Iowa and Missouri and TV stations in Florida, Puerto Rico, and the U.S. Virgin Islands should be preparing their license renewal applications that are due by October 1, along with the accompanying EEO program report.  Because a license from the FCC is required to operate a broadcast station, filing for renewal of your license is necessary and should be taken seriously.  As part of the preparation of the license renewal application, stations should review their public file to be sure all relevant documents have been uploaded and in a timely manner.  The FCC, as we have written about here and here, will use the tools at its disposal (fines, delayed renewal grants, consent decrees, etc.) to punish stations that have not taken the proper care with their public file.  And recently, the FCC has shown heightened interest in the completeness and timeliness of stations’ political files and has proposed consent decrees with many stations that could not certify on their license renewal application that the political documentation required by FCC rules was placed in the public file at the appropriate times.  We wrote about the first round of these consent decrees, here.  Stations should also be readying to air their post-filing announcements, which for these October 1 renewal stations, begin to air on October 1 and continue through December 16.  Stations are no longer required to air pre-filing announcements.  Click here for more on the license renewal process and to watch a webinar we did on preparing for license renewal.

Also due by October 1 are EEO public inspection file reports for stations that are part of a station employment unit with 5 of more full-time employees in Alaska, Florida, Hawaii, Iowa, Missouri, Oregon, Washington, American Samoa, Guam, the Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.  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 need to be placed on the homepage of the station’s website (if the station has a website).

By October 1, television stations must make their elections as to must-carry or retransmission consent for MVPDs 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.  We summarized this new rule, here.

By October 10, all TV and radio stations must upload to their public file their Quarterly Issues/Programs Lists for the 3rd quarter (July, August, and September).  As a reminder, 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.

These are just the highlights of some of the regulatory activity to which broadcasters can look forward in the coming weeks.  Regulatory compliance requires close attention and stations should consult their own attorneys and advisors for more information about these dates and for any other deadlines applicable to their operation.

This Week in Regulation: August 15, 2020 to August 21, 2020

Delivered... David Oxenford and Adam Sandler | Scene | Sun 23 Aug 2020 3:57 pm

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.

  • We noted in last week’s update that the FCC’s Annual Regulatory Fees Order, setting the the fees to be paid by broadcasters by October 1, has been drafted and is likely to be released by the FCC very soon. In advance of the Order being released, NAB CEO Gordon Smith talked with Chairman Ajit Pai and expressed his concern that the proposed fee structure, which is determined by estimates as to how many FCC staffers are detailed to regulating an industry and the related benefit that industry receives, inaccurately reflects the number of employees that work on radio issues.  The NAB has been urging the Commission to freeze radio regulatory fees at last year’s amounts rather than increasing the amount of those fees as the Commission proposed in its Notice of Proposed Rulemaking.  Watch for a final decision from the FCC on regulatory fees possibly this week.  (NAB Phone Call Summary)
  • Earth station licensees, including broadcasters who receive satellite-delivered programming, who want to receive a lump sum payment for their costs associated with technical changes made necessary by the upcoming repacking of the C-Band, must make the election to receive that lump-sum payment (instead of having to prove their actual expenses) by September 14. The deadline had been August 31 but was extended this week.  (Order).  The NAB will be conducting a webinar to explain what this election means (NAB Notice of Webinar).
  • Comments were due by Monday, August 17 in the FCC’s Broadcast Internet proceeding (looking at the use of TV ATSC 3.0 spectrum for datacasting). The FCC sought comment on potential real-world uses for broadcast internet and how the FCC might change its rules to foster deployment and adoption of these new services.  Reply comments are due by August 31.  We took a closer look at this proceeding here and here.  (Docket 20-145 Comments)
  • Broadcasters and other media groups submitted their reply brief in National Association of Broadcasters, et al. v. Prometheus Radio Project, et al. This is the FCC’s appeal to the Supreme Court of the Third Circuit decision throwing out the FCC’s 2017 order changing many of the broadcast ownership rules – including the abolition of the newspaper-broadcast cross-ownership rule.  The justices will review the briefs filed in this case and decide this Fall whether to consider the appeal.  If they decide to do so, the Court’s decision would likely come in 2021.  If the Supreme Court declines to hear the case, the Third Circuit decision stands, and the FCC will have to come up with a new evaluation of its ownership rules consistent with that decision.  You can catch up on the twists and turns of this case here.  (Industry Reply Brief)
  • With an eye on the November 3 general election and the September 4 opening of the lowest unit charge “political window,” we published to the Broadcast Law Blog a review of the FCC rules and policies that affect the rates a broadcaster can charge for political advertising. (Broadcast Law Blog)
  • School administrators across the country are grappling with whether and when students should physically return to schools, with much interest about how college athletics should be handled. Receiving less attention has been how operators of noncommercial stations licensed to educational institutions should navigate the FCC rules on their minimum required operations when students are absent from campus, on a modified attendance schedule, or adhering to other policies that make running a broadcast station difficult or impossible.  The FCC in March released guidance for these stations to follow when schools send their students home, namely that college stations could treat campus shutdowns as a “recess period” under the minimum operating schedule rules.  Under those rules, during a recess, stations licensed to schools do not need special FCC permission to be silent.  On our Blog this past week, we looked at how those FCC minimum operating rules apply to today’s conditions at educational institutions.  The facts of each situation will be different, so be sure to get in touch with your station’s FCC lawyer to evaluate your own case.

 

Lowest Unit Rate Window for the November Election Opens on September 4 – Thoughts on Computing Your Lowest Unit Charges to Political Candidates

Delivered... David Oxenford | Scene | Mon 17 Aug 2020 4:59 pm

With the lowest unit charge window for the November elections going into effect on September 4, just two and a half weeks from now, we thought that it was a good idea to review the basic FCC rules and policies affecting those charges. In this election, with the Presidency and control in both houses of Congress at stake as well as many state offices, and with in-person campaigning limited by the pandemic, there may have never been a time when broadcast advertising was more important to political candidates – and likely more in demand by those candidates.  Your station needs to be ready to comply with the FCC’s political advertising rules. Today, we will look at lowest unit rate issues.  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 – 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 (e.g.  spots may end up running in that period that were sold just 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 that 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 and thus are 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.

In modern political elections, where PACs, Super PACs and other non-candidate interest groups are buying much 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 features 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 low 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 window. 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.  This article in an update of an article from a series that we did several years ago on Political Broadcasting Basics, which we may update from time to time over the next few weeks.  Other articles that deal with other political broadcasting subjects can be found on our blog by clicking on these links:  equal opportunitiesreasonable 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 hereherehere 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.  The laws regarding political broadcasting are extremely complicated – talk to your own attorney for specific advice on situations that arise at your station.

 

This Week in Regulation for Broadcasters: July 25, 2020 to July 31, 2020

Delivered... David Oxenford and Adam Sandler | Scene | Sun 2 Aug 2020 4:34 pm

Here are some of the regulatory and legal developments of the last week of significance to broadcasters – and a look ahead to the FCC’s consideration of two media modernization items in the coming week.  Links are also provided for you to find more information on how these actions may affect your operations.

  • This week, many large and small radio operators that submitted license renewal applications without certifying full compliance with the FCC’s political file obligations received an email from the FCC. That email proposes that these stations enter into consent decrees to get their renewals granted.  A party entering into one of these consent decrees needs to appoint a company compliance officer to monitor political advertising compliance, adopt a compliance plan, hold training sessions, and file yearly reports with the FCC on all political sales.  These consent decrees appear to have gone to virtually every station that could not certify complete compliance with the public file rules, without consideration of the nature of their public file issues.  The decrees are similar to the consent decrees recently entered into by six of the largest radio groups (about which we wrote here).  This week’s action is a vivid reminder of how seriously the FCC takes compliance with the political file rules (for a refresher on the political broadcasting rules, see here for our political broadcasting blog articles and here for WBK’s Political Broadcasting Guide).  If you received one of these emails, talk to an attorney experienced in FCC matters before you sign it to see what options may be available to you and to discuss the details of the obligations imposed by the decrees.  (Consent Decree Example)
  • New carriage election notice rules that apply to LPTV and Class A stations became effective July 31. The new rules require certain LPTV stations and non-commercial educational translator stations that are retransmitted by a multichannel video programming distributor (MVPD) to respond as soon as is reasonably possible to communications about carriage election issues that are received via the contact information the station should have provided in the FCC’s LMS database.  Qualified LPTVs (i.e. LPTV stations in rural areas entitled to elect must-carry status) must also follow detailed procedures to notify an MVPD of changes to the station’s carriage election.  For details as to the information that must be provided, see the FCC’s Public Notice released this week.
  • The FCC released the final cost catalog for reimbursement of expenses associated with C-Band earth station transitions that result from portions of the C-Band being repurposed for 5-G wireless uses. Many radio and TV stations receiving satellite-delivered programming are affected.  The FCC also announced an August 31 deadline for electing a lump sum reimbursement payment (and the format for that election).  (Public Notice)
  • The Department of Justice’s Antitrust Division held a two-day music licensing workshop, bringing together interested parties, including representatives from the broadcast industry and from the performing rights organizations, as well as songwriters, music publishers, and economists. These parties discussed the ASCAP and BMI consent decrees, public performance licensing, and general music licensing issues.  (Assistant Attorney General Makan Delrahim’s Opening Remarks)(Video and transcripts of the sessions will be made available on the DOJ’s website for this workshop when they are available).
  • We posted to the Broadcast Law Blog our monthly feature looking at important regulatory dates in the month ahead. Visit the blog to read about the August dates to watch, including license renewals, EEO reporting, the FCC Open Meeting, and Broadcast Internet rulemaking comments – and an alert to watch for the details that should be coming soon on the annual regulatory fees due in September.  (Broadcast Law Blog)
  • FCC Commissioner Michael O’Rielly appeared virtually at The Media Institute’s Communications Forum luncheon series where he discussed his views on media regulation and modernization, Next Generation TV, diversity in media, and free speech issues. (Prepared Remarks)  (Video)

Next week, here is an event that we will be watching:

  • The FCC will hold an Open Meeting on August 6. The Commissioners are expected to consider two media modernization items relevant to broadcasters: (1) Elimination of the rule prohibiting the duplication of programming by two AM stations serving the same area, and (2) repeal of the rules for FM and TV broadcasters that currently require a licensee to make available to competitors antenna space on any “unique” tower site that they own.  We wrote in more detail about these two proposals here and here.  The Open Meeting will be livestreamed at 10:30 a.m. on August 6.

This Week in Regulation for Broadcasters:  July 18, 2020 to July 24, 2020

Delivered... David Oxenford | Scene | Sun 26 Jul 2020 12:34 am

Here are some of the FCC regulatory, legal, and congressional actions of the last week—and music licensing action in the coming 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 Media Bureau settled investigations into six major radio groups (collectively 1,184 stations) over political file violations. Though negotiated individually, the consent decrees with each company are principally the same: admitting lapses in uploading to their political files records of requests for the purchase of political broadcast time, appointing a compliance offer, and agreeing to develop and follow a compliance plan that includes submitting periodic proof-of-compliance reports to the Commission.  Be sure the people in your operation who handle political advertising are aware of and follow all FCC rules (good places to start are the WBK Political Advertising Guide and Broadcast Law Blog political advertising articles, including this article from Friday summarizing the political file rules).  (News Release)  (Consent Decrees)
  • The FCC is upgrading its online payment interface and infrastructure, to comply with the Department of Treasury’s pay.gov requirements. The upgrades will give users more control over payments and financial standing with the Commission and better visibility into their payment history.  Expect to see these changes rolling out throughout the summer and fall.  (Public Notice)
  • Commissioner Michael O’Rielly’s nomination for another five-year term advanced out of the Senate Commerce Committee and moves to the full Senate for consideration. (O’Rielly Statement)
  • Communications Daily newsletter reported that the FCC staff who are currently teleworking will be permitted to do so into 2021 to provide more flexibility given the uncertain nature of the pandemic, and the move to the new FCC headquarters will be delayed at least through September. Early in the pandemic, we wrote about how the move to remote work was not expected to cause much disruption to the routine regulatory activities of the Commission and, now a few months later, that still seems to be the case.  Where disruptions may continue to occur are to activities that require a physical presence at headquarters—like auctions.  We wrote in March about the indefinite delay of an FM auction.

Next week, we will be keeping our eye on the following action at the Department of Justice:

  • The Department of Justice’s Antitrust Division is holding a virtual public workshop on competition in the music industry, music licensing, and public performance rights. Through a series of panels over two days, the workshop is expected to cover the ASCAP-BMI consent decrees, marketplace competition issues, and competition between ASCAP, BMI, SESAC, and GMR.  Registration is free.  (DOJ Workshop Details)

FCC Enters Consent Decrees with Six Big Radio Groups – Looking at What the FCC’s Political File Rules Require

Delivered... David Oxenford | Scene | Fri 24 Jul 2020 5:09 pm

The FCC this week announced consent decrees with six large radio groups over problems with the political files maintained by these groups.  The consent decrees included very specific compliance plans for each company to ensure that it met all FCC political file obligations in the future.  And it suggested that the penalties were mitigated by the current economic conditions caused by the pandemic – but emphasized the importance to the FCC of the political file obligations and suggested that industry associations take steps to educate all broadcasters about their public file obligations when they run political advertising.  Based on these decisions, we thought that we would republish an updated version of an article that we ran two years ago about those political file obligations so that broadcasters can review their own files to ensure that they have in their files the documents that the FCC wants to see.

Our article from two years ago looked at the political file obligations not too long after the FCC required that all of these documents be made available online, as part of the FCC-hosted online public inspection file. The fact that this file can now be viewed by anyone anywhere across the globe has made the required documents much more visible than when they could be reviewed only by physically visiting the main studio of a broadcast station. Not only can these documents be reviewed by the FCC in Washington, DC, but they can be reviewed by candidates, their agencies, and political ad buyers across the country.  In fact, we understand that some political ad buyers have online “bots” that scan these files routinely to keep track of political ad buying across the country.  Plus, with the license renewal cycle ongoing, the FCC reviews the political file as part of their review of a commercial station’s license renewal application (where licensees need to certify as to whether they have kept their public files complete in a timely fashion).

As an initial matter, it is worth mentioning that the political file has two main purposes. First, it is designed to provide information to the public about who is trying to convince them to vote in a certain way or to act on other political issues that may be facing their country or community. Second, the file is to inform one candidate of what uses of broadcast stations his or her opponents are making. The documents placed in the file must be kept in the file for only two years from the date that they were created – perhaps on the assumption that at that point, we will be on to the next election cycle and old documents really won’t matter to the public or to competing candidates in the last election. But what needs to go into the file?

For any request for advertising made by any legally qualified candidate for any public office (Federal, state or local), the following information needs to be maintained in the file:

  • Whether the request to purchase time was accepted or rejected;
  • If accepted, the rate charged for the ads in the advertising schedule;
  • The date and time that the ads are to be aired, with the exact times that they were aired to be added to the file after they run;
  • The class of advertising time purchased (which will be determined by the rights associated with the spots, e.g. whether they are fixed or preemptible, the daypart or rotation in which the spots will run, etc.)
  • The name of the candidate and his or her authorized committee, and the treasurer of the committee.

The FCC rules also require that information about free time provided to candidates outside of exempt programs be listed in the public file.  So if a candidate appears in a PSA, that needs to be noted in the political file.  See our article here for more information about such uses by candidates that can trigger this obligation.

All information should go into the file as soon as an order is received – certainly within one business day of the receipt of the relevant document – and perhaps quicker in the final days of an election.  The only exception to the one-day rule is for the details of the exact times that the spots ran, which can be inserted into the file when your traffic system generates those reports – provided that they must be provided sooner on request.

That same information as provided for a candidate ad needs to be put into the file for any advertising relating to a “political matter of national importance.” That would include any ad by a non-candidate group (e.g., a PAC, labor union, corporation or other interested individual) dealing with any issue likely to be dealt with here in Washington. Such issues would include:

  • Any ad dealing with a legally qualified candidate for Federal office (either attacking or supporting a candidate); or
  • Any national legislative issue of public importance (e.g., an ad saying “write your Congressman and tell him to vote” for or against some issue being dealt with by the Federal government).

So, for these issue ads dealing with federal matters, the public file needs to state whether or not the request to purchase time was accepted or rejected, the rate charged, the schedule on which the ads will run, the class of advertising purchased, and the identity of the sponsor.  As set forth below, for any issue ad (federal, state or local), the information about the identity of the sponsor needs to disclose contact information for that sponsor and a list of the members of its governing board.

In the political file for these federal issue ads, in addition to all of the information for candidate ads, the file also needs to include a description of the issue that the ad addresses. In the last year, the FCC has clarified its requirements and made clear that this identification of the issues addressed by a non-candidate ad needs to include the name of every federal candidate that the ad mentions and the office for which they are running, and a description of any federal issue mentioned in the ad. We have provided a much more detail on these ruling in our articles here, here, here and here.  Suffice it to say, this puts a burden on every station to carefully review any noncandidate ad to see exactly what issues it discusses.  These decisions also take an expansive view of what are federal issues, requiring the disclosure of the mention of any legislative issue pending before Congress, any issue pending before any federal administrative agency and any of the big policy issues that are debated on a national level (e.g. health care, immigration, abortion, racial injustice, etc.).

All issue ads, whether dealing with federal, state or local issues (state and local issues could include state ballot initiatives, local zoning or school bond issues, or attacks on state or local candidates), also require information about the sponsor of the ads. The information includes the following:

  • The name of the person or entity purchasing the time
  • A contact person at the sponsor, with their name, address and phone number, and
  • A list of the chief executive officers, members of the executive committee or of the board of directors of such entity.

In the FCC’s recent clarification of the rules for issue advertising, the Commission required that stations, if they are given only a single name of an officer or director of an entity buying issue ads, ask the ad buyer for the names of additional officers or directors – on the assumption that it is unlikely that any organization has but a single officer or director. Stations must make such inquiries and keep records (though not necessarily records that need to go into the public file) of the inquiries that they make when they have received only one name for an issue-ad buyer.

We note that many stations use forms to gather the information necessary to respond to these questions – often forms generated by a group owner or one of the “PB” forms created by the NAB.  The NAB in fact recently released updated PB-19 forms for candidate and non-candidate/issue advertising. These are good models to use to gather the information for the file, but the station still needs to make sure that the information provided by the political buyer fully responds to the questions on the form. We have heard of many cases where non-candidate groups do not want to say on the form that they are buying ads on a Federal issue, even when they are clearly attacking a candidate for Federal office, perhaps because they do not want all the information about the advertising buy (including the price and schedule) to be revealed in the public file. Stations need to inquire if the information provided is not complete, as the burden is on the station, not the ad buyer, for this information to be complete and accurate, and timely placed in the online public file.

Also, do not put information into the file about the method of payment for the ads. We have seen cases where checks from advertisers, or worse yet, information about their electronic payment methods, have been included in the public file, potentially revealing sensitive information that could compromise bank accounts. Do not place this information into the file.

Finally, be alert to state record-keeping requirements. States including Washington State have enacted state laws that may impose different or additional paperwork obligations on political advertising (see our article here). Numerous other states have other recordkeeping obligations.  While most of those requirements (although not that imposed by Washington State, which is broader than the federal mandate) can be met by the FCC’s public file, some of these state’s rules appear to impose these obligations on any advertising – not just broadcast advertising – so any digital political ad sales that you do may impose these public file obligations on your station.  So be aware of state law obligations, and if your station is in one of those states, be sure to not only observe the FCC’s rules, but also those of the state in which you are located.

Good luck in keeping all these rules straight in the last weeks before the election. For more information about political advertising obligations, see our Guide to Political Broadcasting, here. And, of course, ask your own lawyer as these issues arise, as they raise many tricky issues that may depend on the specific facts of your case to get the right answer.

Facebook Defends Not Censoring Political Ads – Looking at the Differences In Regulation of Political Speech on Different Communications Platforms

Delivered... David Oxenford | Scene | Fri 12 Jun 2020 5:25 pm

The question about what to do with the protections offered by Section 230 of the Communications Decency Act took another turn this week, when Joe Biden suggested that online platforms needed to take responsibility for the content posted on them and correct misinformation in those ads.  That position is seemingly the opposite of the President’s Executive Order about which we wrote here and here, which seemingly suggests that no censorship should be applied against political speech on these platforms – or certainly no censorship against certain kinds of speech that is not applied against speech from all other parties on that platform.  Facebook almost immediately posted this response, defending its position not to censor candidate’s speech and analogizing it to the position that television and radio broadcasters are forced by Congress to take – where by law they are not allowed to refuse to run a political ad from a candidate because of its content and they are shielded from liability because of their inability to censor these candidate ads.  Facebook took the position that, if Congress wants to regulate political speech, it should pass laws to do so, but that Facebook would not itself be a censor.  That position reminded us of an article that we wrote back in January when there were calls to make Facebook stop running political ads comparing the regulatory schemes that apply to political ads on different platforms.  Given its new relevance in light of the sudden prominence of the debate over Section 230, we thought that we would rerun our earlier article.  Here it is – and we note how we seemingly anticipated the current debate in our last paragraph:

[In January], the New York Times ran an article seemingly critical of Facebook for not rejecting ads  from political candidates that contained false statements of fact.  We have already written that this policy of Facebook matches the policy that Congress has imposed on broadcast stations and local cable franchisees who sell time to political candidates – they cannot refuse an ad from a candidate’s authorized campaign committee based on its content – even if it is false or even defamatory (see our posts here and here for more on the FCC’s “no censorship” rule that applies to broadcasting and local cable systems).  As this Times article again raises this issue, we thought that we should again provide a brief recap of the rules that apply to broadcast and local cable political ad sales, and contrast these rules to those that currently apply to online advertising.

As stated above, broadcast stations and local cable systems cannot censor candidate ads – meaning that they cannot reject these ads based on their content.  Commercial broadcast stations cannot even adopt a policy that says that they will not accept ads from federal candidates, as there is a right of “reasonable access” (see our article here, and as applied here to fringe candidates) that compels broadcast stations to sell reasonable amounts of time to federal candidates who request it.  Contrast this to, for instance, Twitter, which decided to ban all candidate advertising on its platform (see our article here).  There is no right of reasonable access to broadcast stations for state and local candidates, though once a station decides to sell advertising time in a particular race, all other rules, including the “no censorship” rule, apply to these ads (see our article here).  Local cable systems are not required to sell ads to any political candidates but, like broadcasters with respect to state and local candidates, once a local cable system sells advertising time to candidates in a particular race, all other FCC political rules apply.  National cable networks (in contrast to the local systems themselves) have never been brought under the FCC’s political advertising rules for access, censorship or any other requirements – although from time to time there have been questions as to whether those rules should apply.  So cable networks, at the present time, are more like online advertising, where the FCC rules do not apply.

Disclosure is another place where the government-imposed rules are different depending on the platform.  Broadcast and local cable systems have extensive disclosure obligations, in online public files, that detail advertising purchases by candidates and other issue advertisers.  We recently wrote (here and here) about the new enhanced disclosure rules for federal issue advertising (including ads supporting or attacking federal political candidates purchased by groups other than the candidate’s own campaign committee).  Cable networks and online platforms do not have federal disclosure obligations.  Some have voluntarily adopted their own disclosure policies.  In addition, some states have imposed obligations on these platforms (see, for instance, our article here), but as we wrote last month, at least one appellate court has determined, in connection with Maryland’s online political advertising disclosure obligations, that such rules are unconstitutional when imposed on platforms rather than on advertisers.

Certainly, it can be argued that there are technical differences in the platforms that justify different regulation and different actions by the platforms themselves.  Online platforms clearly have the potential to target advertising messages to a much more granular audience.  The purpose of this article is not to argue one way or the other – just to point out that these differences exist.  As we are already well into the political season with advertising running for the 2020 election, we are unlikely to see significant changes in these rules for this election – but watch for more discussions on these differences in the future in terms of how various platforms treat political advertising, and whether this differing treatment should continue.

 

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