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Indian E-music – The right mix of Indian Vibes… » Section 315


Ted Cruz Demands Takedown of PAC Ad Attacking His Voting Record – Issues that Broadcast Stations Need to Consider When Threatened by Candidate Wanting an Ad Pulled

Delivered... David Oxenford | Scene | Wed 17 Feb 2016 6:20 pm

According to Politico, Ted Cruz’ campaign has demanded that TV stations pull certain PAC ads which he claims distort his voting record on immigration issues. This kind of claim from a political candidate about the unfairness of attack ads is common. Here, Cruz’ representatives apparently don’t threaten lawsuits against the stations for running the ads, but suggest that it is a violation of the stations’ FCC obligations to operate in the public interest to continue to run the ads. What is a station to do when such a claim is received?

We have written many times about this issue. Much depends on who is sponsoring the attack ad. If the ad is sponsored by the authorized campaign committee of another candidate, and features the voice or image of the sponsoring candidate, the station cannot do anything. As we wrote in detail here, a station cannot censor a candidate ad. Once it has agreed to sell time to a political candidate or his or her authorized campaign committee, the station must run the ad as delivered by the candidate without edit (with the very limited exception of being able to add a sponsorship identification if one is missing, or when running the ad would constitute a felony, e.g. running a spot that is legally obscene – not just indecent but obscene, meaning that it has no redeeming social significance). Because the station is required to run the ad as delivered by the candidate, the station has no liability for the content of the ad. So, if the candidate being attacked complains, the station can do nothing to edit, censor or pull the attacking candidate’s ad without violating the “no censorship” provisions of Section 315 of the Communications Act. The candidate being attacked has a remedy against the ad’s sponsor, not against the station. Third party ads, however, are different.Because only candidate ads are covered by the no censorship provision of the Act, ads by third party groups – PACs, labor unions, advocacy groups, political parties (with the limited exception of when the party ad is actually authorized by the candidate), etc. – can be censored based on their content. If stations don’t like the content, or think that the content violates someone else’s legal rights, the station can refuse to run the ad, or demand changes in its content. Because the station can censor a third-party ad, the station can be held liable for its content.

Thus, as we wrote in more detail in our article here, once a station is put on notice of the potential falsity of the third-party ad, the station has a duty to investigate its truth. This is usually done by asking the sponsor for material to back up its claims. Depending on the kind of attack, stations may want to consider pulling the ads while this investigation is ongoing. Attacks on the candidate’s character and integrity (e.g. accusing the candidate of lying, criminal violations or other immoral acts) are most likely to be actionable. Claims that are just broad, general political claims (e.g. he’s a closet liberal, he doesn’t care about education, etc.) are less likely to result in any liability. But when these claims come in, that is a good time for stations to get legal counsel involved to help evaluate where on the spectrum the particular ad falls, and what the potential is for liability for continuing to run the ad.

Note that the questions about the truth or falsity of political ads are not ones that will be decided by the FCC. The FCC is not going to get involved in the business of evaluating which political ads are true and which are false. Instead, these issues are most likely to be litigated, if at all, in the courtroom. We’ve seen defamation-based claims (e.g. libel and slander) threatened based on the content of political ads. We’ve also seen other kinds of claims, like allegations of copyright violations, made about these ads. But in all cases, the analysis is the same – if it is a candidate ad, the station can do nothing. If it is a third-party ad, then the station needs to investigate the claim.

For more information, see this article on candidate ads, this one on third-party ads, and our Political Broadcasting Guide, here.

TV Crime Watch Show is Bona Fide News Program Exempt from Equal Opportunities Requests from Political Candidates – Reviewing the Equal Time Rule

Delivered... David Oxenford | Scene | Wed 12 Aug 2015 4:51 pm

The FCC yesterday issued a Declaratory Ruling at the request of the producers of a new syndicated Crime Watch Daily TV show, a program that will give a daily rundown of crime stories including ongoing court trials from around the nation, declaring that the program would not give rise to equal opportunities claims from political candidates. As the producers expected that political candidates would be featured in the program’s daily coverage of crime news (e.g. sheriffs or district attorneys who may be running for reelection in local elections), they wanted to be sure that competing candidates would not have grounds to request equal time from stations carrying the program – which obviously would severely limit the attractiveness of the program. The FCC looked at the description of the nature of the program – where the producer is making editorial decisions about who will appear on the program based on determinations of newsworthiness in the exercise of their journalistic judgment, not based on an attempt to favor or highlight any political candidate. Based on these representations, the FCC concluded that the show was exempt from the equal opportunities obligations of Section 315(a) of the Communications Act.

We have written about the equal opportunities rules (or what many refer to as “equal time”) many times before (see, for instance, our article here). When a candidate makes a “use” of a broadcast station, opposing candidates are entitled to equal time on the station, if they request that equal time within 7 days. If the first candidate did not pay for that airtime, the second candidate gets the time for free. So, if an on-air employee of a station decides to run for public office, once that employee becomes a legally qualified candidate by filing the necessary paperwork for a place on the ballot or taking the steps to launch a write-in campaign, if the employee stays on the air, opposing candidates can request, and are entitled to, equal time on the station. And these opposing candidates don’t need to deliver the weather report or introduce the next song as the on-air employee may have been doing. Instead, the opposing candidates can use the time to promote their campaign, even if the on-air employee never mentioned his or her candidacy on the air (see our article on on-air employees running for office, here). However, where the candidate appears on the air as the subject of a news report, there is no “use” of the station under FCC rules and policies, and thus no need to give equal time.Basically, to encourage stations to provide election coverage, there are instances where a broadcast station’s coverage of news events don’t constitute a “use” and thus don’t give rise to equal time requests. News and regularly scheduled news interview programs, and on-the-spot coverage of a news event, are considered by the FCC to be exempt programs, where the appearance of a candidate is not a “use” and does not give rise to equal opportunities. Over the years, as we wrote here and here, the FCC has been more and more liberal in its interpretations of what constitutes a news or news interview program. It is no longer just the evening newscast on a station and the boring Sunday morning talking heads new interview program that qualify. Instead, the FCC has recognized that people get their “news” from all sorts of different kinds of broadcast programs, and the FCC has determined that any program that regularly features newsmakers, where the program content is in the hands of the producers and where the program’s guests are selected for newsworthiness, and not to promote a particular political agenda, can be an exempt news or news interview program. So the FCC has ruled that a host of programs that may not look like hard news, from the Today Show to Entertainment Tonight, to the Phil Donahue program to even the Howard Stern radio show, could be exempt news interview programs where a candidate’s appearance did not trigger equal time. If they cover some aspect of the news, and regularly feature news makers, they are likely to be determined to be an exempt program.

A station need not get a declaratory ruling from the FCC to rely on this exemption. However, many do seek a ruling. As in this case, syndicated programmers in particular like to have the certainty of a ruling to reassure potential affiliated stations that, by picking up the program, they are not likely to subject themselves to equal time requests.

Obviously, there are many other nuances of this issue that need to be explored for definitive legal advice as to whether your programs are likely to be considered exempt from the equal opportunities rules, so seek advice if there are questions that arise. For more about this topic, and other political broadcasting topics, see our Guide to Political Broadcasting, here.

Donald Trump May Declare Presidential Candidacy on The Apprentice – FCC Legal Issues?

Delivered... David Oxenford | Scene | Sun 17 Apr 2011 10:07 pm

This past week's political news seemed to be all about Donald Trump and his possible run for the Presidency - and his plans to announce his intent to run on the season finale of The Apprentice.  When, a week ago, we wrote about the President declaring his candidacy, there was little interest in our post, and there seemed to be little news attention in general to that announcement.  But when Donald Trump started making noise about his possible Presidential run, and his plans to announce his intent on the season finale of The Apprentice in May, our phones started ringing, asking how can he do that?  My partner David Silverman was quoted in a Huffington Post article, while my analysis was misunderstood in a Hollywood Reporter legal blog (see why I was misunderstood below).  But the question remains - can Trump continue on The Apprentice while signaling his interest in running for President?

In fact, there is no FCC rule that prohibits a broadcaster from giving airtime to a political candidate on any kind of program, as long as they are willing to provide equal time to opposing candidates.  There may be other legal issues involved in giving time to a candidate as it may in effect be a deemed a campaign contribution to the candidate (an issue apparently for PACs as well, as explained by that legal scholar Steven Colbert, here), but the FCC's equal time rules don't prohibit the appearance of a candidate on an entertainment program, they only demand that the stations that broadcast the program give equal amounts of time to opposing candidates who ask for it - if the opponents ask for it within 7 days of the candidate's appearance.  And that is often the first issue - will the opposing candidate ask for it?  None of the Republicans asked when cable networks continued to run episodes of Law and Order featuring Fred Thompson, even after Thompson declared his candidacy for the Republican nomination.  Nor did other candidates request time after there was a parade of candidate appearances on Saturday Night Live during the last election (see our post on this pattern of candidates passing on their equal time rights).  But would a Trump declaration of a candidacy on The Apprentice even face that minimal risk?  Probably not.

For a broadcasters to be forced to honor a request for equal opportunities (or equal time as many call it), there must be a "legally qualified candidate" to make the request.  We'll look at that issue in a moment.  But even more fundamentally, there must be a legally qualified candidate who makes the appearance that triggers the requests for equal opportunity.  And, right now, Trump is not a legally qualified candidate, and one wonders whether he ever will be.  Years ago, when Howard Stern was the King of New York radio, he for weeks claimed that he was running for Governor of New York - and started aggressively campaigning for the job on his morning radio show.  Why did the opposing candidates (who were at the time, I believe, Mario Cuomo and George Pataki), not get equal time on the radio stations on which the Stern program was broadcast?  Because he never became a legally qualified candidate.  He talked on and on about running but, when the time came to file the necessary papers to qualify for a place on the ballot, he passed, and dropped his campaign.  That same ting seemed to happen with that aforementioned legal scholar, Mr. Colbert, and his intent to run in the South Carolina presidential primary in 2008 (see our post here).

In addition to Trump not being a legally qualified candidate, there may well be no other candidates yet ready to claim any equal opportunity rights, as there currently are no other declared candidates, who have filed papers with the FEC declaring their candidacy, to qualify as official candidates. There has been lots of discussion about exploratory campaign committees - but few if any real candidates.  What about the President you might ask?  Good question - but right now, we are, at most, in the run up to the primaries - not to the general election.  In the primaries, Mr Trump (who has indicated interest in running for the Republican nomination) would be opposed only by Republicans - not by the President.  So only the Republican candidates could request equal time during the primary season.

And even if some candidate officially declares between now and the last episode of The Apprentice, there still might not be an obligation.  Again, we are focused on equal time to candidates before a particular election.  And right now there is not a single election looming - but instead a series of primaries, each with their own filing dates and qualification requirements.  In fact, with many of the "primaries" actually being in the form of caucuses (which are subject to political rules), there might not even be formal, legal ways to register for a "place on the ballot" so to speak.  So it may come down to a subjective decision as to whether a candidate has done enough in a state to be considered a bona fide candidate.  While, once a Presidential candidate becomes legally qualified in 10 states, FCC rules deem him qualified for purposes of equal time, reasonable access and lowest unit rates, there is not much law on how a candidate gets to be qualified in some of these states - and it is likely the simple declaration that "I'm running" doesn't do it.  Usually some form of petition and filing fee may be necessary - which may or may not be accomplished at the same time as the declaration of candidacy.  If there are no formal papers to be filed, an active election effort in the state would be required to establish a candidacy - and it's unlikely that any quasi-candidate has done enough in any state (or certainly in 10 states) to meet that standard.

And what did the Hollywood Reporter blog get wrong?  They quoted me as saying that there were no cases deciding that a candidate appearance in an entertainment program triggered equal opportunities, when there have been such cases.  In fact, the FCC tried to change the rules to eliminate the need to offer equal time in such situations, soon after stations were forced to stop running Bedtime for Bonzo during the Reagan campaigns.  But the FCC backed down from that change when faced with a challenge filed in the Court of Appeals arguing that Section 315 of the Communications Act exempted from equal opportunities only very specific classes of broadcast programs (essentially news and news interview programs, an exemption that we've written much about, see, for instance, our post here), and entertainment programs were not among the exemptions.  So obviously there are cases that hold that candidate appearances in entertainment programs are covered by equal opportunities (including cases about comedian Pat Paulsen, who also became a legally qualified candidate, and the movie Storm Warning starring Ronald Reagan).  Perhaps they confused it with another issue which does remain unresolved -  which we also wrote about in connection with the Fred Thompson/Law and Order situation, whether cable television networks are covered by the rule, or only local origination by particular cable systems (certain FCC officials had said, at the time of the Fred Thompson situation, that the FCC was ready to extend the rule to cable networks, but no formal ruling to that effect has been issued).

All in all, the Donald appears to be able to go on making all the noise that he wants about running for President - perhaps in hope that it will not be just the Gary Busey fans who'll be watching the final episode of the Apprentice, but the political junkies as well.  Anything to drive ratings or the birth of the next political superstar?  Here, the old maxim "stay tuned" is quite appropriate.

Remember that Political Ads By State and Local Candidates Need to Have Candidate’s Recognizable Voice or Picture to Be a Use

Delivered... David Oxenford | Scene | Thu 19 Aug 2010 1:57 am

While most of the FCC's political broadcasting rules have remain unchanged for almost 20 years, each year there are a few new wrinkles that arise, and seemingly a few misconceptions that make the rounds among advertising agencies that work with political candidates.  One such misconception that seems to be circulating this year is that an ad for a state or local political candidate does not need to have their voice or picture to be a "use" under FCC rules.  Only "uses" are entitled to lowest unit rates and subject to the no censorship provisions.  For some reason, agencies in several states have tried to convince broadcasters that, as long as a spot has a sponsorship identification at the end (and, for television, a textual sponsorship identification 4% of screen height for 4 seconds), that spot is a "use."  But that is not correct.  A "use" requires that the recognizable voice or picture of a candidate be in the spot - and that is true even for spots for state and local candidates.  Some advertisers may be confused by the change in Federal laws (now itself almost a decade old) that required that Federal candidates identify themselves in their ads and personally state that they approved the message of the ad,  Perhaps some of the advertisers think that, because the law for Federal candidate is so detailed, and because it does not specifically cover state candidates (though several state laws now have imposed the same obligation on state and local candidates in their states), there is no requirement at all for state and local candidates to appear in their ads.  But they are not correct - for a spot to be a use, a candidate him or herself must have a recognizable voice or image in that ad.

While it is not illegal for a station to run a state or local candidate's ad when the ad does not have a candidates voice in it, there are important ramifications for the station if the spot is not a "use".  First, without the candidate's voice or picture, the ad is not entitled to lowest unit rates.  There has been some controversy, not settled by the Federal Election Commission and perhaps subject to interpretations under state election commission rules, about whether a station that charges a candidate lowest unit rates for a spot not entitled to such rates may be making a corporate campaign contribution to that candidate, which is prohibited under Federal law and in most states.  Most importantly for the stations, if the spot does not have the candidates voice or picture in it, the spot is not covered by the 'No censorship" provision of Section 315 of the Communications Act.  That provision prohibits a station from rejecting a candidate's ad based on its content.  But, because the station can't reject the ad based on its content, the station has no liability for the contents of the ad.  Conversely, if the ad does not have the appearance by the candidate in it, then the station is free to reject it based on its content, and thus the station could theoretically have liability for the content of the ad.  As we approach a heated election season where stations don't want the obligation to check the veracity of every claim made by one candidate about an opposing candidate in an attack ad, stations should be careful to insure that spots purchased by candidates are in fact uses, containing the recognizable voice or picture of the candidate - even for state and local candidates. 

We have written about this issue of potential liability for the content of spots many times before, most recently in connection with ads by non-candidate groups that are now allowed from corporations and labor unions following the Supreme Court's Citizens United decision.  Our most recent article on that case can be found here.  For more information about the FCC's laws and policies regarding political broadcasting, check out the Davis Wright Tremaine Political Broadcasting Guide, available here

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

The Impact of the Proposed DISCLOSE Campaign Reform Act on Broadcasters and Cable Operators – Lowest Unit Rates and Reasonable Access for Political Parties, On Line Political File, FCC Audits and More

Delivered... David Oxenford | Scene | Fri 30 Apr 2010 2:33 pm

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

  • An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
  • Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
  • Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
  • Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
  • Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
  • Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
  • Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
    • 6 of the Top 50 TV markets
    • 3 of the markets 51-100
    • 3 of the markets rates 101-150
    • 3 markets below 150
    • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
  • Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

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