Broadcast Law Blog : Broadcast Lawyer & Attorney : Davis Wright Tremaine Law Firm : Broadcast Law Blog : Seattle, Los Angeles, Washington D.C., New York, San Francisco, Shanghai

The Supreme Court issued its landmark opinion in Citizens United v. FEC one year ago today.  That case allowed corporations and labor unions to make independent expenditures for or against political candidates.  An editorial in today's Washington Post by the President of Citizens United and its lead counsel argues that the hysteria following that decision was unfounded because the amount spent by citizen groups in the last election paled in comparison to the amount spent by the Democratic and Republican parties and by the candidates themselves.  Rather, the authors argue, the primary political speech to come out of the Supreme Court's decision has been that of independents, and politicians are upset by this because they cannot control the speech of independents.

 As a reminder, the Supreme Court case arose as a result of a film directed against then Presidential candidate, Hillary Clinton.  Citizens United was a nonprofit corporation that produced the film, and there was debate whether this was a "documentary" or an "electioneering communication," as well as whether distribution via video on demand constituted "public distribution" of the film.  The Supreme Court found that the film was indeed an "electioneering communication" and that VOD was likewise a public distribution of the film.  Thus, Citizens United ran smack up against the FEC prohibition on independent corporate political expenditures.

As we blogged last year, the Supreme Court found that the prohibition on such corporate expenditures violated the First Amendment right of speech belonging to corporations and unions.  This decision was followed by a firestorm of critical comments, including those of President Obama in last year's State of the Union address.  The fear among many was that the money of big corporations would overwhelm the political messages of others who are less able to afford advertising time and that those corporations would therefore have a disproportional voice in future elections.

The editorial in today's Washington Post argues that those fears have not been realized, and that permitted corporate political expenditures are still vastly outspent by the major parties and candidates themselves.  While the editorial's authors are not unbiased, their point is well taken as to the first election since Citizens United was decided.

What we do not know, of course, is what effect Citizens United will have on a Presidential election, although we will find that out within the next two years for sure.  We also do not know whether corporate political expenditures will increase over time as those new First Amendment rights become realized.   However, most big corporations have directors and shareholders holding all sorts of political viewpoints.  It is unlikely that many publicly traded companies will want to risk offending investors by siding with a Democrat or Republican candidate. 

So, perhaps the fears that followed the Supreme Court's decision were indeed misplaced, and Citizens United was a true victory for the First Amendment, as today's editorial argues.  The future will ultimately reveal any yet unrealized impact of this decision.  Just as the Supreme Court made its decision a year ago in view of all the circumstances then existing, it can just as easily revise its holding in the future should different circumstances warrant correction.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The DISCLOSE Act recently passed the Committee in the House of Representatives charged with dealing with it, without many of the provisions that most worried broadcasters and cable companies.  We recently wrote about the DISCLOSE Act legislation proposed in both the House and Senate in response to the Citizens United Supreme Court case (which freed corporations and labor unions to spend money during political campaigns to explicitly support or oppose the election of particular candidates).  When introduced, in addition to provisions mandating new disclosure requirements for corporations, labor unions and other third parties who decide to run political ads, the legislation had a section expanding the requirements for lowest unit rates and reasonable access - extending these rights to political parties (as opposed to being limited to the candidate's own campaign committees, who are the only ones eligible under current law) and mandating advertising rates even lower than the current lowest unit charges in certain circumstances.  That section of the original bill also required that the FCC conduct audits of broadcasters' compliance with the political rules, and seemingly expanded the FCC political advertising obligations of cable systems.  The House of Representatives Committee on Administration this week approved the bill, sending it on to the full House for consideration.  The DISCLOSE Act's sponsors want to have the bill approved and in place by July 4th so that it will have an impact on the November elections.  The approval without these provisions, which may well have caused broadcasters and other media companies to come out in opposition to the bill and delayed its passage, signals that the Act may in fact move on the rapid timeline that its sponsors envision.

Of course, this is not the end of the story.  The Senate still has to consider the bill in committee, and the full House and the full Senate have to vote on the legislation before it is adopted.  At any point, amendments can be offered that could have the impact of returning some of these provisions of concern.  But, at least for now, while imposing some additional disclosure requirements on political advertisers, the House version of the legislation is much more palatable to the broadcasting community.  But watch this bill as it progresses through Congress in the coming month to see what else may develop. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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. 

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Using music on your website, employees on Facebook or twitter, doing podcasts?  Everyone needs a guide to the legal issues that you may face as broadcasters move their content to new platforms.  At the Convention of the Oklahoma Association of Broadcasters, held in Oklahoma City on March 18-19, David Oxenford conducted a seminar on Legal Issues for Broadcasters Operating in a Digital World – dealing with legal issues that broadcasters need to take into account when moving their content and presence beyond their over-the-air signals.  The PowerPoint presentation used in that seminar is available here.  Other issues that were discussed in that session include:

• Use of music on websites (see our guide to Music Rights for Digital Media Companies here)
• Domain name issues (see our recent post on new domain names here)
• FTC guidelines on disclosing consideration given to bloggers and other users of social media sites (see our post on that subject here)
• Legal issues that arise from the social media (see Davis Wright Tremaine's webcast on the social media, here)
• Issues in connection with user generated content (see our posts here)

In addition, David conducted a separate seminar on FCC issues facing broadcasters.  A copy of the PowerPoint from that presentation is available here.  Issues discussed in that session included:

• The FCC's National Broadband Plan and its impact on television broadcasters (see our post here)
• The proposed broadcast performance royalty (or performance tax, see our post here)
• The FCC proceeding on the Future of Media (see our posts here and here)
• The recent Citizens United decision and its impact on political broadcasting rules (see our description of that case here, and our Political Broadcasting Guide, here)
• A variety of fines imposed on stations for violations of FCC rules - a summary of many of the recent fines can be found here.

 Broadcasters and others interested in the Digital Media should watch our Blog for future developments on all these issues and the many other legal matters of importance to their businesses. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On March 16, David Oxenford spoke at a Continuing Legal Education Seminar on the FCC’s Political Broadcasting rules. The panel, sponsored by the Federal Communications Bar Association, included another attorney in private practice, an attorney from the NAB, Bobby Baker (the head of the FCC’s Political Broadcasting office), and a media time buyer for political candidates. The panel not only discussed the basic rules governing political advertising on broadcast stations, but also dealt with topics including the impact of the Citizen’s United case on FCC rules (see our post here on that topic), issues of what to do if a political spot contains objectionable content, and how stations should deal with complaints from candidates about the content of political ads. Many of these topics and others are discussed in the Davis Wright Tremaine Political Broadcasting Guide, available here.  The discussion also provided a useful reminder on certain aspects of the law regarding how much broadcast stations can charge political candidates for the purchase of advertising time on broadcast stations.

At the session, the political time buyer complained that broadcast stations were trying to charge political candidates premium prices for purchases of advertising time outside the “political window.” During the window, 45 days before a primary and 60 days before a general election, stations are required to charge candidates the “lowest unit rate” charged for any spot of the same class of time run on the broadcast station. Outside the window, broadcasters do not have to charge lowest unit rates but, as the buyer reminded the audience, they do still need to charge “comparable rates” to what the station charges advertisers for the same type of purchase. So, while candidates do not get volume discounts without buying in volume (as they do during the window), if they do buy in the required volume, they should get the same discount that other advertisers get. Stations should not “mark up” the rates charged to political candidates outside of the window.

Another question that came up dealt with the sale of advertising time on election day, whether it be the day of the primary or the general election.  As the law requires that stations charge the lowest unit rate for the 45 days before the primary and the 60 days before the general election, what do stations charge for time sold on election day?  After significant discussion, it was agreed that stations should charge the lowest unit rate on election day as well as during the political window before the election.  However, even for Federal candidates, there is no right of access to political time on election day.  That is, stations can decide themselves whether or not to sell time on election day.  But, if they do, it should be at lowest unit charge.

Watch our Blog as we highlight other election issues that arise during this election season. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On February, 18, 2010, David Oxenford conducted a seminar for the Utah Broadcasters Association on legal issues that affect radio and television broadcasters.  First, David summarized the various broadcasting legal and policy issues pending before the FCC and Congress.  David's PowerPoint presentation is available here.  Broadcasters interested in Washington issues that may affect them this year may also want to read our blog post from early January where we presented our legal predictions for 2010.

David then conducted a refresher course on political broadcasting issues that may arise in this election year.  His PowerPoint on political issues for broadcasters can be viewed here.  Broadcasters wanting more information on the FCC's political broadcasting rules and policies should review the Davis Wright Tremaine Political Broadcasting Guide.  A discussion of the issues for broadcasters raised by the recent Citizen's United case is available here.

Finally, David discussed recent developments in enforcement of the FCC's EEO policies.  The PowerPoint used in this session can be seen here .  Our Advisory on EEO rules and policies is available here, with forms and recordkeeping suggestions attached to that memo.  Our most recent EEO Public Inspection File Report advisory, with a model report attached, is available here.  Finally, our description of one of the recent FCC fines for noncompliance with the EEO policies is available here. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Supreme Court Decision in Citizens United v. Federal Election Commission, freeing corporations to use their corporate funds to take explicit positions on political campaigns, has been mostly analyzed by broadcast trade publications as a good thing - creating one more class of potential buyers for broadcaster's advertising time during the political season - which seems to almost be nonstop in these days of intense partisan battles in Washington and in the statehouses throughout the country.  What has not been addressed are the potential legal issues that this "third party" money may pose for broadcasters during the course of political campaigns.  Not only will an influx of money from non-candidate groups require that broadcasters review the contents of  more commercials to determine if the claims that they make are true, but it may also give rise to the return of the Zapple doctrine, one of the few remnants of the Fairness Doctrine never specifically repudiated by the FCC, but one which has not been actually applied in over a quarter of a century.  Public file obligations triggered by these ads also can not be overlooked. 

First, the need for broadcasters to vet the truth of allegations made in political ads sponsored by non-candidate advertisers.  As we have written before(see our post here), the political broadcasting rules enforced by the FCC allow broadcasters to run ads sponsored by the candidates themselves without fear of any liability for the claims made in those ads.  In fact, the Communications Act forbids a station from censoring a candidate ad.  Because the station cannot censor the candidate ad (except in the exceptionally rare situation where the airing of the ad might violate a Federal felony statute), the broadcaster has no liability for the contents of the ad.  So candidates can say whatever they want about each other - they can even lie through their teeth - and the broadcaster need not fear any liability for defamation based on the contents of those ads.  This is not so for ads run by third parties - like PACs, Right to Life groups, labor unions, unincorporated associations like MoveOn.org and, after the Citizens United case, corporations. 

Stations are not required to accept third party ads and, even where these ads address a candidate, the station has full rights to accept or reject the ads based on the ad's content (perhaps subject to Zapple discussed below).  However, because the station can choose whether or not to run the ad, the station can also be held liable for the content of those ads.  While the standard for liability under the rules of defamation are very high for public figures such as a political candidate, there still can be liability if the station runs an ad with "malice", meaning that they either know that the content of the ad is false, or run it with reckless disregard of the truth of the claims made (where those claims later prove to be false).  That malice standard is what forces stations to become political researchers - tasked with determining if there is a reasonable basis for a claim made in an ad so that the candidate being attacked cannot later come back against the station and accuse the station of recklessly running a false ad.  We've written before (here and here) about the typical scenario that arises - a third party group buys an attack ad against a political candidate, the candidate or his or her lawyer sends the station a letter saying that claims made in the attack ad are false and the station will be liable if the station continues to run the ad.  At that point, the station has an obligation to investigate the truth of the statements made in the ad.  If the station just continues to run the ad with no investigation, and the ad proves to be false and the candidate that is attacked can prove injury, the station can be held liable.  How much investigation is necessary?  That is a question that cannot be answered in a few paragraphs on this blog.  But suffice it to say that stations need to be prepared to call their attorneys and discuss the issue with their owners in making these assessments - as each station may have a different tolerance for risk, and a different willingness to allow questionable third party ads to run.

The other potential issue that this decision may bring to the fore is the status of the Zapple Doctrine.  Section 315 of the Communications Act imposes the Equal Opportunities doctrine (otherwise known as "Equal Time") on stations, which the FCC has interpreted to mean that stations need to treat all candidates running for the same office in the same way - allowing them to buy equal amounts of advertising time on a station, and giving them equal amounts of free time on a station if the candidate appears outside of an exempt program (e.g. news or news interview programs, or on-the-spot coverage of a news event, including most debates).  But the Equal Opportunities Doctrine applies only to candidates and their appearances  on stations (or "uses", in the language of the FCC).  What about the purchase of time by third party groups, which are technically not subject to the Equal Time rule?  Well, more than 30 years ago, the FCC adopted the Zapple Doctrine, or "quasi-equal opportunities" as an outgrowth of the Fairness Doctrine.  The Zapple case, as we wrote here and here, held that where supporters of a candidate are allowed to buy time on a station, supporters of the opposing candidate should also be allowed to buy roughly equivalent amounts of time.  While the remainder of the Fairness Doctrine has been declared by the FCC or by the Courts to be unconstitutional over the last 25 years, Zapple has never been officially overturned.  When the Swift Boat documentary was about to be run on some television stations during the Kerry-Bush campaign, the Kerry campaign invoked Zapple in claiming that all stations that ran that documentary would need to air equal amounts of time from pro-Kerry groups.  While that matter was settled before the FCC ruled, some FCC officials have from time to time implied that they would have invoked Zapple had it gone to a decision.  With an influx of corporate money into political campaigns, Zapple issues are more likely to find their way to the FCC in coming elections.

Finally, the Citizens United case did not upset the record-keeping and disclosure requirements of the Bipartisan Campaign Reform Act ("BCRA").  BCRA imposed many such obligations on broadcasters.  Thus, the sale of time to corporate groups, just like the sale of time to any other third-party group, requires a full public file disclose when such purchases are made to address a Federal issue or election.  We wrote about those obligations here and here. Essentially, all the same information about the purchase that would be kept for a candidate buy must be kept for a third-party buy - including the class of spots purchased, the schedule run, the price paid, and the identity of the purchaser.  Even advertising buys dealing with state and local elections require an identification of the buyer and its principal officers or directors.

Thus, while more money may flow into broadcast stations as a result of the Citizens United decision, that money may come with some additional headaches for broadcasters.  All of these issues and more are addressed in the Davis Wright Tremaine Political Broadcasting Guide, available here.

• Email This
• Print
• Comments
• Trackbacks
• Share Link